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Westminster Hall

Volume 463: debated on Wednesday 18 July 2007

Westminster Hall

Wednesday 18 July 2007

[John Cummings in the Chair]

HMRC Offices (East Midlands)

Motion made, and Question proposed, That the sitting be now adjourned.—[Tony Cunningham.]

I am grateful for the opportunity to raise the concerns of my constituents about the proposed closure of Her Majesty’s Revenue and Customs offices in Burton-on-Trent as part of the review taking place in the east midlands. I understand the need to reassess the use of buildings that accommodate HMRC in the light of changes in working practices and in the operations of the service. However, I do not believe that centralising all work for the Nottingham-Derby area in Nottingham is the right way forward. Nor do I believe that the proposal will produce the most efficient and effective system for delivering the service in the future, or that it will be efficient or effective if long-serving, experienced staff are forced to leave because of the distance that they would be expected to travel to work.

I shall come to the likely effect on staff and on the services that they provide in some detail later, but first I want to question the inclusion of Burton-on-Trent in the review of the Nottingham, Derby and Leicester urban centres. The consultation document states:

“The offices selected for review were determined by examining all offices within a 25 km radius of Castle Meadow Nottingham and Northgate House Derby.”

Burton is 21 km from Derby—almost at the limit of the criterion—but it is 47 km from Nottingham. Since the current proposal is for all the sites in the area to close and move to Nottingham, I believe that it is wrong for the Burton-on-Trent office to be included.

In their response to the consultation, staff stated:

“The original proposal lumped Burton in with Nottingham/Derby, but as the current proposal means the closure of Derby, Burton is far outside the 25 km range of reasonable daily travel and should therefore be considered as a stand-alone office.”

Another reason why I believe that Burton should be treated as a stand-alone office is that the town is actually situated in Staffordshire, which is in the west midlands. The staff in Burton work with employers from throughout the whole of Staffordshire. If Burton closes, will the processing of all Staffordshire employers’ returns take place in Nottingham, rather than in Burton?

I am reassured by the correspondence that I have had with HMRC that the review will take into account the effect on staff. The Burton site is unusual, in that 17 per cent. of the staff have some form of disability. Some of the disabilities are visible, but others such as irritable bowel syndrome, repetitive strain injury, poor eyesight and vertigo may be invisible. People with certain disabilities would not be prevented from travelling to Nottingham, but others would find it impossible. Staff with conditions such as irritable bowel syndrome would be unable to travel using public transport because of the lack of facilities, which would mean that they would have to make themselves redundant by refusing and being unable to relocate.

Those who need to attend medical appointments within work time would find it far more time-consuming and costly if they were to be redeployed in Nottingham. The time currently allowed for appointments that cannot take place outside working hours is up to one half the person’s working day. If Burton staff were to relocate to a different area, the allowed time would not cover the travelling, appointment and treatment time required, and more people would therefore have to take sick leave to attend such appointments. For staff attending medical appointments, there would be the added cost of travel, which would not be refunded because such travel would be outside the normal standard day. Whereas now, an appointment at Queen’s hospital in Burton may involve minimal time and little disruption to the work load of staff, travelling to appointments from Nottingham could reduce the office’s effectiveness.

One member of staff who is registered blind would find it impossible to travel as far as Nottingham and would therefore be forced to give up her job, even though she would have little prospect of finding other work. Another member of staff, who suffers from allergic rhinitis, which causes severe vertigo, said:

“There have been occasions where I’ve had to be taken home because I could not walk or drive due to my vertigo. What am I supposed to do if I’m working miles from home and have a bad attack? I can’t drive with a severe attack and wouldn’t be able to get myself home.”

Those are real concerns of valuable members of staff who are afraid for their future. HMRC in Burton is an excellent example of how an employer should accommodate staff with disabilities. It also offers flexible hours to help employees balance work and family life, which the Government strive to encourage all employers to do. It would be sad if the reorganisation resulted in a move in the opposite direction.

Around half the staff at Burton have children or elderly relatives to care for. Many have chosen to work part-time or during term time because it fits in with family commitments; indeed, 37 per cent. work part-time. In their response to the consultation, the staff said:

“The Government wants to encourage disabled people to work. We are a shining example of that in action. Closing the office and making it so much harder for us all, disabled or not, to even get to work, could see all that lost. The same goes for many of our part-time staff. Most have child-care issues, which is why they are part-time to begin with. The extra travelling time will lead to at best a reduction in the number of hours many will be able to work. The reduced working hours will lead to an increase in benefit claims which is again contrary to Government aims. The Government announced plans to assist single parents back to work. The closure of Crown House is in direct opposition to these aims.”

One member of staff described her situation:

“I have worked for the Revenue for 24 years. I have always chosen to stay in the Burton location as it works with my family/work balance. I am very committed to my work and although I have seen so many changes with the way we have to work over the years, I am still proud to say I work for the Government at the Inland Revenue (now Revenue and Customs).”

This member of staff had worked full-time for 17 years at Crown house and then reduced her working hours to 27 a week when she had her daughter. Working two hours fewer per day enables her to collect her daughter from school each day. She said that any move to Derby—or, if that office closed, which is probable, to Nottingham—would throw her work and home life into chaos. She would have to consider working longer hours for four days and paying for breakfast and after-school clubs.

I accept that many people have to make such arrangements, and that the Government are encouraging the development of wraparound care to enable people to get into work. Many people have to travel some way to work, but my constituents who work at HMRC in Burton have chosen to work close to home, and to work hours that suit the needs of their families. They are loyal and dedicated staff who will find their lives totally disrupted by the closure of the Burton office.

It is not just those with children who will find their lives disrupted. Many staff have the responsibility of caring for elderly relatives. They would find their tasks much more difficult if they had to relocate to Nottingham.

Some employees will find it impossible to afford the extra costs of working further away from home. Although travelling costs would be paid, there are fears that the extra costs would not be fully covered. The payments would be for a limited time only, and would be taxable. They would not cover the possible introduction of congestion charges or increased parking charges. The payment of travel expenses would also have a detrimental effect on those staff who claim tax credits due to low pay or short hours, and there would be no financial compensation for additional child care costs. Those who are able to travel will, of course, add to the problems on our roads, particularly in cities such as Nottingham, by adding to the congestion and pollution.

My hon. Friend spoke movingly about the effects on staff at Burton. Does she agree that similar considerations apply to Mansfield? People will have to move from Mansfield to Nottingham and then deal with the consequences for their families. More importantly, should we not be focusing on customers—people who want tax advice—and is there not a real case to keep local offices open, so that people can have direct access to public services?

My hon. Friend is absolutely right. Obviously, I am concentrating on Burton-on-Trent because it is the area that I represent, but the same could be said for the other offices that face closure. It is important—I shall come to this issue later—to have experienced staff who can both deal with customers and businesses on site and visit them. People’s experience of the local community is important in that regard.

Any closure of the Burton office would undoubtedly lead to the loss of experienced staff, be they those with disabilities who cannot travel, those with caring responsibilities who are unable to balance work and family life, or those who cannot afford to travel. That loss of experience would result in a poorer service for the taxpayer. Employees describe how, having devoted all their working lives to the organisation, they have gained a breadth of knowledge that is irreplaceable. That knowledge has helped staff to adapt quickly to the changes happening in HMRC. Staff are concerned that the job losses caused by closures will mean that a valuable resource is lost, and that the public will suffer because there will be a vastly inferior service.

Nearly all the staff in Burton have worked there for more than 10 years, and the majority have worked there for more than 20 years. Customers of HMRC—local employers—are also concerned about the loss of experienced and skilled staff that the closure of Crown house in Burton would result in. As I said, the employers’ section for the whole of Staffordshire is in Burton. That specialist and local knowledge is of huge importance to the employers with which HMRC deals, and the loss of expert knowledge cannot be replaced by basic re-training in other locations. The loss of a quality service would directly impact not just on employers, but on their employees.

In their response to the consultation, the staff said:

“The compartmentalisation of work into narrow processes such as the LEAN procedures has a detrimental effect on many of our customers. Post is filtered and quick work is prioritised at the expense of more complex work. In the Staffordshire area much of that more difficult work is regularly sent to us here in the Burton office due to the breadth of experience in handling PAYE and SA work.”

They went on to say that there would be a loss of knowledge if staff were forced to leave because of the closures, and added:

“Those that may be able to travel will be fed into LEAN teams, where, over time the expert knowledge they possess will be diluted by the production line style of work that caused the difficult work to be sent to us to deal with in the first place.”

I am also concerned about the impact that closure would have on the compliance team at Burton, which currently goes out to business in the local area. Its knowledge of local employers will be diluted and its visits will, again, entail more travel costs.

Any closure of the Burton office would result in a worsening service for the public who need to visit the inquiry centre. I understand that there is a commitment to keep an inquiry facility in Burton. However, either it would be more costly to provide the equivalent of current services in such a stand-alone facility, or the hours that it could operate would be severely restricted.

I thank my hon. Friend and constituency neighbour for giving way. She has focused on the effect on employees and is now turning to some of the business issues, but does she agree that it is concerning that HMRC has not yet produced any detailed business plan regarding the savings that might be generated from this wholesale reorganisation? It will be prepared only after the consultation has been concluded and a decision has been made, which seems to be the wrong way round.

I agree with my hon. Friend—that is obviously the wrong way round, and other issues also seem to involve putting the cart before the horse. Staff are unsure whether they should accept a move now, or wait to see whether a closure takes place—an issue that I will come to later. There are many concerns about the whole process, such as that raised by my hon. Friend.

There are five staff at the inquiry centre, including the manager, and they are backed up by staff in the main offices. For health and safety reasons, the back-office staff will work in the inquiry centre when needed, doing their own work, not inquiry centre work. That enables the centre to remain open if, for example, someone is on holiday or sick leave, or has a day off. For health and safety reasons, there must always be two members of staff in the inquiry centre when the public are present. Crown house has its own security system that protects those who work in the inquiry centre and serves others in the building who do not work for HMRC. The danger is that if the inquiry service is to be managed with the current five staff, it would have to become part- time and reduce its hours. Alternatively, it would cost more to maintain a separate facility.

It is important that a full inquiry service be maintained in Burton, particularly because the town has a large number of people whose first language is not English. It is unusual for a town the size of Burton to have so many residents who are originally from other countries. We have a large, long-established community that originates from Pakistan. More recently, people have come to the town from Iraq and Afghanistan, and, more recently still, from Poland. Some of them have language difficulties and value face-to-face contact, rather than contact via the telephone. If we do not have a full service, those people will lose out, and as I said, maintaining the current inquiry service would cost more money.

The impact on the local economy of the proposed job losses in Burton is a further concern. Crown house is situated in the town centre, and the HMRC operates from two of the building’s six floors. A job centre operates from two floors, and one floor is commercially rented. Crown house is conveniently located next to local bus services and is adjacent to the two main shopping centres. Staff based in the town spend their money there, and local shops will lose out if jobs are transferred to Nottingham. People will not just go out at lunch time in Nottingham, but will do their general shopping there, which will be a loss to Burton and its local businesses.

I draw the Minister’s attention to the stress that has been placed on staff by the uncertainty that exists over the proposed closures. Although I appreciate that consultation and consideration of the proposals have been extended so that care can be taken to make the right decision, delay brings a longer period of uncertainty for staff. In the meantime, they feel pressured into making decisions about their future without knowing whether their place of employment will close. No alternative departments in Burton, or within reasonable daily travel, could take on surplus staff from HMRC. Staff are being told that if their office is to close, in the worse case scenario there will be compulsory moves, and that if someone refuses to move, they will be dismissed under the conduct and disciplinary procedures. Will the Minister say whether that is correct?

I am pleased to be able to draw the Minister’s attention to my constituents’ concerns. I ask her to look at the position of loyal and experienced staff who have given a lifetime of service to the Revenue. I also ask her to look at the response of the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stevenage (Barbara Follett), of 5 July concerning the Kettering office, in which she stated:

“One aspect of the impact assessment that is made is the effect of travel”.

She went on to say:

“All staff will have individual meetings with their managers to assess their travel requirements and to make sure that they do not affect their work-life balance.”—[Official Report, 5 July 2007; Vol. 462, c. 1089.]

It is important that that happens before a decision to close an office is made. Reference has been made to the financial situation—the other side of the issue. It is no good saying that the offices are going to close and then looking at the staff’s needs, because in that case some staff could not continue to be employed.

I ask the Minister to consider the situation, given that Burton-on-Trent is 47 km from Nottingham—nearly twice the reasonable travel distance, according to the consultation—and to consider whether Burton should be regarded as a stand-alone office. Will she also consider the better use of technology to avoid centralisation and the reduction of accommodation at various locations, rather than the abandonment of whole buildings, or part of them, as in the case of Crown house? It should not be beyond the wit of man and woman to devise a system in which people can continue to work in offices, albeit on reduced floor space, and use technology to do the jobs that they would have to do if they were transferred to Nottingham.

I hope that, when the Minister has considered all the issues, my constituents will be able to continue to work close to home, which will help them to balance their employment with any disabilities or caring responsibilities that they have.

I congratulate the hon. Member for Burton (Mrs. Dean) on securing this important debate. Some decisions for the London area have been announced already, but in the process of reviewing these HMRC mergers and closures around the country, we were told initially that a decision would be made for the east midlands—along with other areas—in the summer. However, it is now more likely to be after the summer—we think that that means in the autumn. So great doubt still hangs over the work forces in the affected areas.

In Derbyshire—one of the five counties in the east midlands—the proposal is to close every HMRC centre and to move them out of the county. We have heard examples already of some being moved to Nottingham. In Chesterfield, which has two offices, the proposal is to close both and to move them to Sheffield. There are a number of problems with that, which those who work in the two offices in Chesterfield have split into different categories.

One of those concerns travel-to-work distances, of which we have just heard examples from Burton-on- Trent. On a map, the distance from Chesterfield to Sheffield, which both staff and customers would have to travel in order to get to the proposed Sheffield centre, might appear quite short—geographically it is—but in reality it certainly is not. One factor that has to be taken into account is that, of course, a number of people working in Chesterfield live in other parts of north Derbyshire, such as the Peak district. One member of staff that I talked to lives in Matlock in the West Derbyshire constituency. First they have to travel into Chesterfield before being able to make public transport connections to Sheffield, which would have a massive effect on calculating travel-to-work times. The same would apply to many customers of the centres in Chesterfield, many of whom, we should remember, are not business men or accountants dealing with tax issues who, arguably, will have cars and be able to travel, but are pursuing issues such as tax credits and working tax credits. In some cases, they will be unemployed. Such people will not find it easy to access car transport—it is not easy to get to Sheffield anyway—or to pay the costs of public transport. The distance is one factor, and the distance on the map is a very different reality from the actual travelling distance, into which I shall go in more detail later.

Another issue concerning travel to Sheffield, whether by car or bus, is the massive congestion in the daytime, which will be the working hours of the offices. The relatively short land distance to drive is a nightmare journey, and one that I know very well. I was born and lived until I was 18-years-old in the part of Sheffield nearest to Chesterfield, and I still drive in that way every week to visit my mother. Of course, I go in during the day, quite often for media interviews and meetings as well. The road network is congested throughout the day, not just in peak travel times in the morning and at the end of the afternoon. A normal route-finder or map simply does not indicate the reality. Quite often, the key roads into Sheffield from Derbyshire are gridlocked at key times and other times during the day, which makes journeys a nightmare.

That, of course, has a knock-on effect on another Government policy, which, quite correctly, is to reduce the impact on the environment of the way we live and do business. Making those who work in the two Chesterfield offices and all of the customers and clients travel to Chesterfield on a regular basis simply adds more pollution, especially since most of that road transport, whether bus or car, will be sat in traffic jams for the greater part of the journey, churning out pollution as it edges forward, bit by bit, along gridlocked roads in Sheffield—more pollution, rather than less, despite what is meant to be the Government’s overriding objective across every Department.

We heard examples from Burton-on-Trent of part-time workers. A large percentage of workers in one of the Chesterfield offices in particular are female employees working part-time. I have talked to a large number of them individually, through letters and at a public meeting, and an awful lot of them chose to work part-time specifically because they have caring responsibilities, mostly for children, but also for elderly and disabled relatives. Although it is mostly women, there are men in the same situation as well. Certainly, at one of the two offices, the majority of staff are part-time, and across the offices as a whole, part-time workers constitute a large percentage of the staff.

Again, as we have heard from examples in Burton-on- Trent, many feel that they would not be able to maintain their job if they had to work in Sheffield, with all the problems of travel and time, and getting back to pick children up from school and to look after relatives and so forth. Their jobs would be lost, as, of course, would their skills and experience, as we have heard already. Many of those people have worked for many years for HMRC in its two previous incarnations.

I have touched already on the question of business service to the community, which has been mentioned by others as well. That affects partly the service to those coming to deal with tax issues and other personal matters such as working tax credits, which are horrendously complicated and can cause huge heartache for those trying to sort out the fact that they have been overpaid or underpaid and so on. If they have to travel to Sheffield, some simply will not be able to go and others will not bother, and so will lose out even further. Businesses, such as accountants, have said that, whereas at the moment they can often go to a local office and, in a face-to-face meeting, sort out quite easily many of the problems affecting their business clients, if they have to drive on congested roads to Sheffield, the service will be much worse—it might be done more at a distance, by phone or internet. The Government want e-government, but by no stretch of the imagination is that always as effective as face-to-face meetings with those involved. In fact, often, it is less effective. So there would be a loss of service to the community—to both individuals and businesses.

That business factor is important for Derbyshire as a whole, if it loses every centre, and for Chesterfield, which has been through bad economic times in the last 20 years or so. In Chesterfield, we have just, but not quite, got back to the level of employment that we had in 1981, just before Mrs. Thatcher’s Government began the slash and burn policies that wiped out almost the entire industrial base in Chesterfield—engineering and mining. In recent years, many new and small businesses have been attracted into the town, but they require a lot of interaction with tax and revenue departments in order to sort out their business affairs. The loss of all of the centres in Derbyshire and, therefore, Chesterfield would impact on local businesses in the town.

We had a very reassuring meeting some weeks ago with people from the Department who told us that no one currently working for HMRC would be expected, as a result of closures and mergers, to make an unreasonable daily journey. A reasonable daily travel time—RDT—is calculated at 60 minutes. They said that back-office work would be provided if people simply cannot move to the new offices when offices are closed. Such back-office work could be done more in their home location. They promised that a face-to-face interview facility for customers would be retained, that there would be no compulsory redundancies and that they would consider, when making their final judgments in the course of the consultation, issues such as the local economy and regeneration, and whether an area, such as Chesterfield, had suffered very badly from the economic downturn of the last 20 years, was just pulling out of that and needed the help, employment and support provided by those offices.

It seemed to me at the end of the meeting that the Government had made it crystal clear that if all the promises were kept, there was no way in which they could close both offices in Chesterfield, as they had at first proposed, because doing so would not meet any one of the five criteria. If those reassurances are to be acted on, it looks as though we can be quite optimistic about what the Government will announce on Chesterfield later this year.

However, there are question marks over the reasonable daily travel distance. We are told that no one will be expected to have an unreasonable travel-to-work time as a result of closure and mergers, but when we go into the detail and analyse how individual people will be affected, that is not quite so reassuring. The distance from Chesterfield to Sheffield is not very far on a map, but let us say that someone goes by train. There is a very good regular service from Chesterfield to Sheffield, but they will have to walk quite a distance from the station to Concept house, which is the proposed new location in Sheffield, and quite a bit will be uphill. From the flat area where the station is, they will have to go uphill past the town centre to Concept house. If people are older or disabled, that walk will not be easy. I am thinking of both staff and clients travelling from Chesterfield and north Derbyshire.

If someone travels by car, there are serious problems. The Government figures suggest that it takes 23 minutes to go by car from Chesterfield to Concept house in Sheffield. That ignores the fact that a number of the people who work in Chesterfield and a number of the people who use the Chesterfield office as clients come from the whole area of north and central Derbyshire—they come from the Peak district and from north Derbyshire. The issue is not just a 23-minute journey from the centre of Chesterfield to Concept house, but the journey time into Chesterfield first as well. In any event, there is absolutely no way the journey can be done in 23 minutes by car in the daytime. I have driven the route many times in the past 30 years or so, so I know. If someone is travelling to work in the morning or coming home from work at the end of the afternoon, it is impossible to do the journey in 23 minutes.

People who work at the centres in Chesterfield have questioned the Department about how much faith it is placing in the internet route-finders, such as the AA route-finders, that say that the journey takes 23 minutes. The answer seems to be, “An awful lot.” A member of the management of the work force change team for the Chesterfield area said that the AA route-finder was “a really good start” for the team analysis of individual journey times. Well, it is not a really good start; it is totally and utterly misleading about the journey times during the day and especially at peak travel-to-work and travel-home times.

A question that has arisen in the same vein from the London experience is whether, in the case of disputes about whether the travel-to-work times that people pull off the internet are realistic, the Department will pay for a test journey to be made by the individual, so that they can take the suggested public transport route or car route and see whether they can travel it in the given time. Initially, people were told that yes, the Department would pay for test journeys, but when they chased that up, they were given this answer in London:

“There is no departmental policy covering the reimbursement of expenses incurred whilst testing the journey to a proposed new place of work. The decision falls to the local business unit/manager’s discretion.”

It seems, from the negotiations that are already taking place in the London area, where decisions have been announced, that it will be very difficult to get support for a test journey, but if there is reliance on internet route-finders, that will be totally and utterly misleading and it must be abandoned.

As the hon. Lady said, everyone accepts that there is a need to rationalise the estate of HMRC; that is perfectly sensible. Previously, there were two Departments, with two separate lots of offices. Of course money can be saved for the taxpayer and better spent on other things by rationalising what is being provided. In Chesterfield, the staff themselves have said that the situation is very simple. Dents chambers, which is one of the buildings in Chesterfield, could be closed and everyone moved into Markham house, which is the other building. That is under-utilised; there is room to move everyone there from Dents chambers. If that were done, a significant percentage of the savings that are sought in terms of physical office space would be made, without all the disruption to the service to people in Derbyshire, the loss of jobs and the inconvenience to people—without all the negative consequences that we have discussed.

The announcement was to be made this summer, but now we are told that it will be at the end of the summer. I hope that that does not mean at the end of August, when Parliament is in recess and Ministers are not accessible to be questioned by hon. Members from affected constituencies. I hope that it means October, when Ministers are entirely accessible.

The Minister is indicating yes from a sedentary position. I look forward to her comments at the end of the debate. Obviously, hon. Members want to be very involved at the point when the final decision is announced and in the ongoing negotiations, where necessary, on behalf of individual workers in the area affected.

I congratulate my hon. Friend the Member for Burton (Mrs. Dean) on securing the debate and on the way in which she presented her arguments on behalf of Burton. I also welcome my right hon. Friend the Minister to her position, which is well deserved. We look forward to working with her again as we did when she was in her previous jobs.

I understand, as others do, the reasons for the review of office space and work force deployment, but I want to raise three issues. First, the proposal to close the Alfreton office, which is in my constituency but to which people also travel from neighbouring constituencies, cannot meet the criteria set out in the review.

Secondly, I am very concerned that although assurances were given—particularly in a debate secured by my hon. Friend the Member for North-East Derbyshire (Natascha Engel), in which she set out all the arguments on the Chesterfield office, and subsequently—that no decisions had yet been taken and that the Minister would consider all the arguments made, in fact what is happening in the offices at the moment, certainly in Alfreton, is pre-empting those decisions. That is creating confusion for staff on what decisions they should be taking at the moment.

Thirdly, I urge my right hon. Friend to ignore completely, unless it has been changed dramatically, the summary of the consultation responses that was drawn up by HMRC staff, because it bears no relationship to the responses that certainly I and staff made. It is not a proper representation of those responses. I will return to that.

As with the Burton office, it is quoted in the review that Horsefair house, which is the Alfreton office, lies well outside the 25-km radius for both the main offices in Derby and Nottingham within the urban review area and should therefore be assessed as a stand-alone office. In addition to the fact that it is well outside those boundaries, the travel distances are calculated on the basis of office-to-office distances by car, and many of the people who work at Alfreton travel a considerable distance into Alfreton before they even get going, so the distances are considerably greater than that. Those distances indicate that Alfreton should also be seen as a stand-alone office.

As has been said, the relocation would not allow staff to take journeys involving reasonable daily travel. It just is not possible for it to be reasonable daily travel if staff from Alfreton have to travel to Nottingham. Because of the nature of transport links in the rural area and from Nottingham, it is not possible to say that they could travel reasonable distances. In the submissions that I sent in—I do not know whether I shall have time to return to them—I cited a number of examples, with travel times, of staff who will simply lose their jobs because they cannot possibly travel to Nottingham, given their responsibilities and the times when they have to travel. It is physically not possible.

There has been discussion about congestion on the journey into Chesterfield for staff travelling by car. I would challenge people to try travelling in and out of Nottingham during rush hours—it is a complete and utter nightmare. Anyone travelling by car will have real problems. For people travelling by public transport, at least there is a train service from Chesterfield to Sheffield. Trains from Alfreton to Nottingham go hourly only. The Alfreton Parkway station is about 1.5 miles out of the centre of the town. It is a very difficult station for people with disabilities, and at the moment the trains are not even running, so going by train certainly creates interesting challenges. For anyone who has to time their travel to fit in with when they, for example, have to drop children off at school and pick them up, it becomes virtually impossible. If they travelled by bus, most staff would have to take more than one.

I urge the Minister to talk to the Minister who dealt with the attempt at the beginning of this Parliament to close the two medical assessment centres in Derbyshire. A lot of work was done on the travel distances involved, which showed that it was very difficult to make the necessary connections in our area. Largely as a result of the work that we did and the submissions that I made on travel connections with help from the public transport unit and individuals, the two medical assessment centres stayed open.

It must also be emphasised that staff with caring responsibilities do not have flexibility as to when they can travel. We cannot, therefore, simply say that it is a certain distance from one place to another; if the trains go only hourly, many staff in the office will almost have to leave work before they get there, and that creates considerable problems.

On individual staff, we are told that one of the criteria is that HMRC is keen to ensure that

“the degree of disruption for its staff is minimised”.

We are also told:

“No jobs will be lost directly as a result of this proposal. It is expected that staff will relocate within the Nottingham/Derby urban centres.”

However, the consultation document says that 47 per cent. of the staff at the Alfreton office work part-time and that 86 per cent. are women, and those are among the highest proportions in any office covered in the Nottingham, Derby, Leicester and Sheffield reviews. In a union survey of staff at the Alfreton office, 84 per cent. indicated that they had caring responsibilities.

I refer the Minister to a recent response by the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stevenage (Barbara Follett), who has particular responsibility for women’s issues and equality. In response to a question on 5 July, she stated:

“HMRC is committed to ensuring that women and other groups do not suffer when tax offices are closed.”—[Official Report, 5 July 2007; Vol. 462, c. 1088.]

Given the incredibly high proportion of women, part-time workers and people with caring responsibilities at the Alfreton office—it is possibly the highest proportion in any of the offices affected by the review—it is just not possible to meet that commitment not to have an effect on women. Nor is it possible to say that nobody will lose their jobs, because these people are just not able to travel.

The equal opportunities implications of the proposals are really serious. If the proposals are applied to Alfreton, they will not meet the new gender duty on public authorities. We are talking about some of the few quality jobs in the Alfreton area that are available to women with caring responsibilities and which allow the flexibility to combine paid work and caring.

I mentioned our concern about decisions being pre-empted. Within the past fortnight, the staff responsible for face-to-face contact, who are meant to be staying so that a contact service is retained, have been told that only those who can make the commitment to covering a full contact service will be wanted. In effect, they are already being told that if they work part-time, they will not be wanted. That pre-empts the decision that will be taken and goes against what has been said about equal opportunities.

As I said, such jobs are not widely available to women in the Alfreton area; indeed, there is a lack of quality jobs generally in the area. HMRC is one of the larger employers in Alfreton. Unemployment in the area is the highest in the Amber Valley borough. The office also serves a number of neighbouring constituencies, which are also classified as deprived areas.

There are therefore serious issues in relation to equal opportunities. At the moment, I am chairing an inquiry for the Select Committee on Trade and Industry on how to implement the women and work commission proposals. We are looking, in particular, at the fact that occupational segregation leads to an equal pay divide, and that relates considerably to the number of decent jobs that are available to women. The proposals therefore have serious equal opportunities implications, and we need to take account of those.

I want to make a couple of additional points. As has been said, the proposal is that all the offices in Derbyshire should close, and the implications of that are similar to those of the proposed closure of both the medical assessment centres in Derbyshire. The proposal has therefore created a lot of local concern about the county’s economy, and there is the issue of whether Government offices are seen to provide a service in our county.

On the service issue, it is proposed to continue the customer inquiry service at a nearby venue. However, the tax office at Horsefair house has received considerable national recognition for the quality of its work and particularly for the outreach work that it has done in the past. At the moment, there is a team of four face-to-face staff, which includes full-time staff members and a part-time member who works only during term time. Of the full-time staff, one has child care responsibilities and another works a nine-day fortnight. They work their hours to fit their responsibilities, but if they are now being told that they can do those jobs only if they are prepared to work a different set of hours, they will lose their jobs. Furthermore, they currently require back-up from processing staff to provide cover, but it is proposed to move the processing staff to Nottingham. The proposals will therefore have a detrimental effect both on staff and the commitments made to them and on the service that is provided.

Given the nature of their jobs, staff in the Alfreton area are very long serving and experienced. It is easier to get other jobs in urban areas, so people do not have the same length of service or level of expertise, and that fact should also be taken into account. I am told that staff turnover at Alfreton is much lower than at larger offices, where HMRC competes with other employers, and that the average length of service at Alfreton is 20 years. There is therefore a range of arguments, which I hope that the Minister will take seriously.

I am also concerned that decisions are being pre-empted. We are told that no jobs will be lost directly as a result of the review, but that is just not true. People at the Alfreton office are being told that volunteers are still being sought to move to the strategic sites. What are staff in such offices meant to do? Are they meant to assume—those who are able to move—that there will be no jobs for them if they do not take that offer up now? That pre-empts what will happen, and staffing levels will potentially be wound down to the point where the office closes and those who cannot move will be left behind. That is causing a lot of concern.

At least one member of staff has already been told that she is pre-surplus because her work in dealing with the estate has been moved to Nottingham. That pre-empts any decision to close the Alfreton office, which we are told has not been taken.

As my hon. Friend might be aware—this might apply to her constituents as well—one of my constituents was told:

“If you wish to await the outcome of the regional reviews, you can do so but be aware that the vacancies that exist in some of our Strategic Sites may be filled”.

Yes, I have heard similar things, but we are told that no jobs will be directly lost as a result of the review. That puts people in considerable uncertainty.

Another constituent, who works in the Nottingham offices, which are meant to carry on, has been told that the type of job that she does will in future be split across six offices, instead of seven. Again, those involved do not know whether they will be offered anything else; they have been told half a story and have been left in considerable confusion.

As I say, decisions seem to have been pre-empted. As I mentioned, management told staff who work face to face a fortnight ago that it wanted only those who can make the commitment to work the necessary hours, and that goes against equal opportunities commitments. There is therefore a great deal of uncertainty, and I am concerned that despite commitments that no decisions have been made, management is operating in such a way as to pre-empt any decisions.

I mentioned my concern about the consultation responses. As a result of criticisms at our meeting with HMRC management and staff, we were told that management would go back and look at the responses, but the consultation summary bears no relationship to the submissions that were made. On Alfreton, for example, the summary says that some staff have concerns about travelling to Nottingham, which would have “an effect” on their work-life balance. Yes, it would have an effect on their work-life balance: the work bit would go, as a number of those people just cannot travel in the way that is suggested, because of the length of the journey and the connections, which they cannot make. The summary is just a distortion of what was said. We said they would not be able to make the change. It would not just affect their work-life balance; their work-life balance is such that their commitments make it impossible.

The consultation document also contains, for some reason, a quotation—we do not know where it comes from—which is quite complimentary; it does not include the comments from people who are very critical about the effect on service. I advise scepticism in studying the consultation responses, unless there have been substantial changes. I intend to write to the Financial Secretary and send her my response again.

I have a couple of examples of the situation of people in the Alfreton office with regard to travel. I have obtained some case studies. One relates to someone who worked there 30 hours a week, enabling her to drop off her daughter at school for 8.40 am and pick her up at 3.30 pm. She does not drive, so if the office closed she would have to get the bus to Nottingham from her home in Swanwick. Incidentally the main fast bus service has just closed. We hope that we shall get a substitute service, or I do not know what my constituent will do. However, when she wrote about her situation, she said, on the assumption that the Red Arrow service would still be functioning, that her travelling time would be three hours a day. She calculated that to get her hours in she would not be returning home until 6.50 pm. She did not know whether she would be able to get a child minder, which she would have to do to cover that time.

Another example concerns a single parent who cannot drop her daughter off at the child minder’s home before 8 o’clock. She cannot drive, so she would have to go by bus or catch the train, which is only hourly. There is only an hourly bus service to Alfreton from where she lives. The trains from Alfreton to Nottingham run hourly. Even if she managed to catch the 9 o’clock train from Alfreton she could not get her hours in, so, again, she would have to stop working. I have also collected examples of people with disabilities; in the case of one who is registered disabled it would not be possible to get to the Nottingham office.

There are serious difficulties about the Alfreton office. I am concerned about the proposal to close all the Derbyshire offices, and about the way in which the management is now operating, which is putting great pressure on staff to take decisions without knowing the full facts about what is to happen, and is also pre-empting decisions. I know that the Financial Secretary has a difficult job, which I do not envy her, but I urge her to take on board the points that I have made.

I, too, congratulate the hon. Member for Burton (Mrs. Dean) on securing the debate. She spoke powerfully about the impact that the proposed changes will have on her constituents, but she has also provided an opportunity for many other Members of Parliament to raise concerns about how they will affect their constituencies. I am sure that the story that we have heard today will echo not only across the east midlands but across the country, because there is widespread concern about the impact of the proposals to rationalise HMRC offices. In my constituency, office closures are proposed and the staff and the wider community are concerned about the effect that they will have.

I do not think that anyone present in the Chamber objects to the principle of what the Government have said they want to achieve. It is right that the Government should closely examine the work that civil servants do, whether for national or local government, and determine whether they are doing it as efficiently as possible, so that taxpayers can see that public services give value for money. If efficiency savings can be made, that is to be welcomed. However, there is concern about whether the savings that are being discussed will be cost-effective, and whether there will be an effect on front-line services.

We have clearly heard that staff are worried about the viability of their jobs, the difficulties that the changes will present them with in such matters as travel arrangements, and whether the consultation process was fair and representative. The result is concern that pre-emptive action is being taken, ahead of the announcement of any decisions at the beginning of the autumn; that there will be a continuing period of uncertainty; and even that what is happening is salami-slicing—the beginning, rather than the end, of a process that will cast the relevant services into even greater uncertainty. Hon. Members have spoken at length about specific staff worries, and I want to broaden out my concerns about the impact that the changes may have on such matters as the local community, government, and the individuals who use the services.

As to the possible effect on the community, hon. Members have already discussed people’s views about difficulty in getting access to services or their work. People will have further to travel, and the emphasis on the distance between the two offices is not necessarily fair. In both cases, people will be travelling to the offices; there will be journeys to be made to, as well as between, those destinations. That needs to be taken into consideration, along with the difficulties that have been mentioned about the relative pros and cons of trying to make the necessary journeys by public transport—or even by car, where there is significant traffic congestion.

I am concerned about the impact that any job losses will have on job availability in deprived areas. Access to quality jobs is important to the regeneration of any area. Perhaps I may draw a parallel between what has been described today and the situation in my constituency, where the tax office jobs are critical in ensuring not only access to high-quality jobs but footfall in the town. Offices providing high-quality jobs lead to money being spent in towns every day, and the additional revenue has a beneficial impact on the town. If that effect is removed, not only jobs but spending will go from the town centres. I hope that the Government take that into account when they consider possible closures.

We have heard in great detail about the possible effect of closures on access to jobs for women, in particular. Many of the jobs are part-time and, as we have heard, are held by people with responsibilities to families as carers. Any changes will affect whether they consider remaining in their job a viable option, given all their other commitments outside work. Of course, if people must travel further, there will be an environmental impact. My hon. Friend the Member for Chesterfield (Paul Holmes) spoke clearly about the knock-on effect. I wonder what cross-departmental thinking is going on about issues such as regeneration and the impact on the environment.

It seems that there is a drive to centralise services while other Departments are talking about decentralising them, and a proposal to reduce women’s access to jobs while other Departments are talking about the need to ensure equality of access to jobs—and not just for women but for disabled people and other groups. Will there be a loss of community intelligence? One of the key assets of many tax offices is their local knowledge. They know the individuals that they will speak to. If people must travel a long way, that important community connection will be lost.

As to the effect on government, the Government think that the changes will bring about efficiency savings and make greater resources available. Will the Financial Secretary elaborate on the contribution that she thinks the changes will make to the Gershon review? What impact will they have on wider plans to decentralise jobs, and on local revenue collection? Of course, there is a detection and deterrence element to the work, and a cost-benefit analysis needs to be done, taking into account the cost of providing the jobs and the benefit that they provide by bringing additional taxation revenue into the Treasury. Does the Financial Secretary expect that evasion may increase and the Treasury’s ability to detect it may decrease as a result of some of the changes?

I also want to ask the Minister about equality. Have the Government made any assessment of the impact that these decisions will have on women’s access to the workplace? What will happen to the people in Burton, where there is a high level of disability employment? Will that change as a result of the proposals? There is undoubtedly massive excess office capacity on many of these sites, and of course there is a need for rationalisation, but I wonder whether the scope for capital savings will be matched by similar revenue savings.

The theme that comes out of the debate is that people’s interaction with the state is increasingly expected to be faceless and done on the internet or by telephone. For many people that is absolutely fine and is the most convenient and straightforward way of doing things, but what happens when the choice is taken away? Some people, when they have a serious problem, are reassured by being able to sit down with an individual who is empowered to take a decision about their case and who they know has a personal interest in it. That is important, and there are concerns that that aspect will be lost, because it will become increasingly difficult to have that interaction under the changes.

Increasing numbers of my constituents come to my surgeries about problems with the Child Support Agency, the tax credit office and other Government agencies. People go to their MP in absolute frustration that they cannot speak to an individual in person to sort out their problem, or even speak consistently to the same individual on the phone. They go to their MP because it is their only opportunity to have a face-to-face interaction with the state on an issue that is affecting their lives, often in a massive way. I currently have the odd case regarding the local tax offices, but not many. I am concerned that we will not see the impact of the changes until further down the line when, suddenly, in addition to the tax credit and Child Support Agency cases that come in, we will see individuals who are having problems with their tax assessment, who would previously have been able to talk through their problems face to face with an individual but have lost that opportunity.

I understand that a face-to-face presence is to be maintained in many offices, but there are concerns that the changes will be the beginning of a process, not the end, and that we will see what we have seen with jobcentre closures: first, staff numbers are reduced, then opening hours are reduced and then, all of a sudden, we see a proposal for closure. We need reassurances from the Minister that that will not be the case in these areas.

I conclude by asking the Minister a few more questions. What work is being done at a cross-departmental level and with local authorities regarding spare office capacity and the need to provide services at a local, community level? Are they considering providing a variety of local services to make the most efficient use of work space and maintain a local presence? What was the decision-making process about where to centralise? Back in May, the Derby Evening Telegraph described a process whereby a circle was drawn around Nottingham and everything within that circle was drawn in. Is that what happened and was any account taken of local transport options? I have already raised my concerns about the salami-slicing approach. Will the Minister estimate the likely overall cost savings? Has there been a cost-benefit analysis of the savings represented by the job cuts balanced against the revenue that will be forgone as a result of the cuts?

Members of staff and the wider public are uneasy about the climate of uncertainty regarding the proposed closures, and the hon. Member for Burton has done her constituency a service in securing the debate. This is an opportunity for the Minister to provide greater certainty, and everyone will be pleased to hear further reassurances that the consultation process will have an impact on the results and on the autumn proposals.

It is a pleasure to have you in the Chair, Mr. Cummings. I think that this is the first time I have spoken in this Chamber with you in the Chair—I am more used to the hon. Member for Burton (Mrs. Dean) being in the Chair. I congratulate her on securing this very useful debate and on the passion and understanding that she showed in setting out her case. She put the perspective of the staff who work in Burton very strongly, and spoke in particular about disabilities and work-life balance, which other hon. Members have mentioned.

We must all acknowledge, as some hon. Members have, that it is incumbent on HMRC to organise its affairs in the most efficient manner possible, and that there is a place for rationalisation where it has additional office capacity. I should like to address more fully a point that the hon. Member for Sherwood (Paddy Tipping) made in his intervention, which was not discussed in great detail, about customer services. I am not entirely sure about calling taxpayers “customers”. I know that we all use that term, but I am not sure that they all feel like customers when their tax is taken from them.

This is a big issue in the east midlands. Hon. Members have pointed out that the programme stretches across the country, and there have been previous debates on how it will affect Cornwall and Kettering. However, feelings are strong in the east midlands, with which I include Staffordshire, even though it is in the west midlands. The Derby Evening Telegraph has been very vigorous in defending the existing tax offices through its “Hands Off Our Taxmen” campaign.

The reorganisation is driven partly by a desire to find efficiency savings. There are targets to reduce the number of staff in HMRC, which were driven by Gershon and, subsequently, the Lyons report. We must consider the matter carefully. It is entirely reasonable for Parliament to scrutinise whether the service to the “customer” is being maintained. Last December, the former Paymaster General answered a parliamentary question about the impact of the tax office closure programme on the administration of tax credits and employer end-of-year returns. She began her reply by stating:

“HMRC do not have a tax office closure plan.”

I think that we know different now. She went on:

“The reorganisation aims to improve both efficiency and customer service in all areas of HMRC.”—[Official Report, 19 December 2006; Vol. 454, c. 1744W.]

That is clearly a welcome objective, but we must ask whether it is being achieved.

When I was preparing for this debate, I looked at the evidence given to the Treasury Select Committee on 25 April by a number of experts in the field. Frank Haskew, head of the tax faculty at the Institute of Chartered Accountants, said that he was

“very concerned about HMRC’s cost reduction programme and efficiency savings and that it is too much of a task for HMRC to actually improve services.”

The institute, which deals with tax offices on a day-to-day basis, has surveyed its members and found that 65 per cent. of respondents feel that the HMRC merger has not improved services. It also found—this is particularly relevant to the debate—that 71 per cent. feel that centralisation has gone too far, and that 79 per cent. feel that the lack of HMRC offices and contacts is making their job much harder. That important point was made by the hon. Members for Burton and for Falmouth and Camborne (Julia Goldsworthy). People want to be able to speak to somebody directly—to be able to sit down and have a face-to-face meeting. When tax credits were designed, the intention was that there would be an opportunity to have such meetings. When dealing with the state as a whole, there is a desire for such an approach.

The hon. Member for Burton raised some local issues, including the fact that a lot of people in Burton do not speak English as their first language. Having done a little research in this area, I know that four of Burton’s wards are among the 10 per cent. most deprived in the west midlands.

East Staffordshire borough council has recently shown its desire to speak to people by establishing a customer service centre in Burton. In the first three weeks, about 1,500 people visited it. I am grateful to Andrew Griffiths, the excellent Conservative parliamentary spokesman for Burton, for drawing this to my attention. A desire to speak to people clearly exists.

John Whiting of the Chartered Institute of Taxation raised a concern with the Treasury Committee about the loss of experience within HMRC. He said that it was harder for people to get good interaction with someone who could answer their questions. A consistent message is coming back: routine problems such as VAT registration and trying to check whether coding notices have been issued are taking longer to resolve. Previously, such matters would have been dealt with by a quick telephone call or a quick visit. It is a great concern that the quality of service provided by HMRC is not what it should be—indeed, it appears to be declining in many instances.

Tax credits are one of a handful of recent particular stresses on HMRC. I am only going to touch on them now, but I am sure that it will not be the last time that I debate them with the Financial Secretary. We saw the report last week from the National Audit Office, produced along with HMRC’s annual accounts. One of the many concerns raised in it was that the level of fraud and error in 2004-05 was unacceptably high, and there was no evidence to demonstrate a lower estimate for subsequent years. One problem identified by Sir John Bourn of the NAO was the quality of the inquiry work undertaken by HMRC. Does the Financial Secretary think that the removal of local offices will have any impact on the inquiry work undertaken by HMRC to identify fraud and error?

Another subject that we debated at some length during consideration of the Finance Bill, particularly on Report, was VAT issues, particularly delays in VAT registrations and repayments. Again, that is not a new issue, although it may be for the Financial Secretary. There is considerable concern about HMRC delays within this process, and Paul Gray, its chairman, acknowledged the problem in January. There is a recognition of what we hope is a temporary blip in performance. None the less, we are seeing considerable delays in the time that it takes to register a company for VAT and to make a VAT repayment.

I should acknowledge that many of the problems are occurring because of legitimate attempts to tackle missing trader intra-community fraud. I do not want to put any pressure on HMRC to fast-track processes and not go through the necessary checks, but there is a wider issue. Resources appear to be diverted into tackling that fraud, leaving insufficient resources to deal with routine matters.

I return to income tax and the NAO report issued last week. It seems that HMRC may not be pursuing some £880 million of tax due, and that there is about £340 million in overpaid tax. The report states:

“potentially five million taxpayers not paying the right amount of”



That is clearly a concern.

The Public and Commercial Services Union, which deals with this area, has stated:

“The programme of office closures and job cuts will potentially have a devastating impact on jobs, conditions and the delivery of public services, particularly in areas where service delivery is already impeded by inadequate staffing.”

It also says:

“Morale has reached a new low”.

One of the points made by the trade union is that, given the various staff reductions, HMRC may be

“employing thousands of staff on short-term, temporary contracts and using overtime (at an additional net cost to the Government) in an effort to try to cope with backlogs of work.”

I would be very grateful if the Financial Secretary shed light on whether that is true.

We can see that HMRC will have a very tight budget for the next few years, and that there will be some fairly ambitious attempts at reorganisation. Doing all this at once creates certain strains. We must ask ourselves whether HMRC is coping and whether its customers are suffering. We have also heard important points about the impact on communities and on staff, and it is right that we address all these issues. My concern is that the then Chancellor perhaps sought to have a very tight spending round, and wanted to lead by example. In doing so, has he caused a problem in our tax system that will create problems in raising revenue, and for taxpayers and staff?

It is a pleasure to be debating this subject under your chairmanship, Mr. Cummings. For once, it is not raining, so hopefully the day will continue to go well. I am pleased to have been able to listen to the concerns that were expressed, and I congratulate my hon. Friend the Member for Burton (Mrs. Dean) on securing the debate and, as has been said, on enabling a number of other colleagues to speak on this subject, which is of clear importance to the neighbourhoods that they represent.

I also appreciate the way in which hon. Members have expressed their acceptance of the need for the current review. I know that they will appreciate that, following the merger of the Inland Revenue and Customs and Excise, the department has significantly more office accommodation than it needs. The position varies across the regions, but in general HMRC believes that it has about 40 per cent. more office accommodation than it needs to support its operations. It estimates that this spare capacity costs about £100 million a year to maintain. The annual cost of accommodation in the urban centres of Nottingham, Derby and Leicester to the department is about £12 million. I am glad that my hon. Friends have agreed that the board has a responsibility to reduce unnecessary cost.

In a thoughtful and probing speech, the hon. Member for South-West Hertfordshire (Mr. Gauke) raised a number of issues. He is right that the challenges facing HMRC are not easy. I would like to say one or two things on the issue of tax credits, which he mentioned. He also quoted from evidence to the Treasury Committee, and raised concerns that were expressed by representatives of tax advisers or agents. I acknowledge that the agent community may require specific services, as do other members of the public, from HMRC. HMRC is piloting a dedicated agents’ hotline to see whether it meets those needs. However, I am sure that we will discuss this issue again on other occasions.

Similarly, the hon. Gentleman questioned whether we had the balance right, whether HMRC was being asked to do too much and what impact that might have on levels of service. I recognise that some difficulties exist. HMRC is working to recover the position on VAT, and working on the speed with which VAT registrations and returns are processed. I hope that the hon. Gentleman will be reassured that we have ring-fenced resources for tax credits. Transformation of the process seeks to address some of the problems, and to improve the level of service as part of the efficiency programme. HMRC aims to deliver an effective and efficient service focused on the needs of its customers—I prefer to call them customers rather than claimants, as we do with some tax credit claimants. Those improvements cannot be achieved by continuing to occupy buildings that are no longer needed, and carrying out work in ways that are no longer efficient.

Very little of HMRC’s current work in its local offices relates to economic activity in the local area in question. Its business is arranged on national business lines, including the use of large contact and processing centres, with the exception of its inquiry centre network—I shall return to that—and locally based compliance and debt management activity. It is important that HMRC uses its larger centres as efficiently as possible, and it has embarked on a transformation programme that will allow it to deliver its business with up to 25 per cent. fewer staff. A number of jobs will go over time, but it is the process by which HMRC achieves those improvements and efficiencies that we are discussing.

Beyond that, HMRC is making significant changes to the way in which it carries out its business to respond to customer demand. Many customers now choose to use the telephone, or the internet to file returns and make claims. It is right for senior management to look at all operations to ensure that they are run as efficiently as possible. In some work areas, that need is best served by concentrating work in larger units where the processes can be streamlined. In other areas, a more mobile work force is seen as the best solution to meet customer needs. Finally, there must be an emphasis on improving compliance by matching resources to the risks that HMRC deals with in particular locations.

I shall now deal with a couple of general points. The hon. Member for Falmouth and Camborne (Julia Goldsworthy) asked what contribution the closure will make to the Gershon recommendations. HMRC is aiming for ongoing savings of £507 million per annum by 1 April 2008. The hon. Lady suggested that we were salami-slicing services, and asked whether there would be more change in the future. There is nothing more certain than that there will be more changes. HMRC transformation will continue over a number of years, and it is likely that, as customer needs and processes change, decisions will be revisited.

The hon. Lady made a throwaway comment about changes at jobcentres, Jobcentre Plus and so on, and some of the associated traumas. When I was Minister for Work a few years ago, I rejoiced when an unemployment benefit office in my constituency was closed—I had signed on there 20-odd years ago—and put up for sale. It was looking rather sad and dilapidated, and it is now being made ready for redevelopment for a totally different purpose. I asked my agent whether I could pose in front of it for a photograph for a leaflet, because it is excellent that the strength of the economy and the greater number of jobs mean that we can consider with equanimity some of the changes that, at other times in our country’s history, have been much more problematic.

HMRC is ahead of schedule with its general efficiency programme, having reduced the number of posts by some 11,000 through a combination of restricted recruitment and voluntary early retirement. I emphasise that the plan is to reduce its use of office accommodation and to focus on back-office functions, not public inquiry facilities.

My right hon. Friend the Member for Bristol, South (Dawn Primarolo), who served for a long time at the Treasury and is an extremely hard act to follow, made it clear that the network of inquiry centres must be maintained. I want to assure my hon. Friend the Member for Sherwood (Paddy Tipping) that I fully endorse that approach. HMRC will not change that approach in any way.

When an inquiry centre is to close—for example, because a lease cannot be renewed—HMRC has been asked to re-provision the facility as close as possible to the current inquiry centre. Face-to-face contact will be maintained, and in many cases it will be enhanced.

If a back office closes, will the inquiry office be open for as long as it is now, and will increased staffing be necessary to fulfil that?

In line with the assurances that I have given and the steer that was given to HMRC by my predecessor, the face-to-face services that the public receive through those offices should be maintained and, wherever possible, enhanced. I cannot predict too far into the future the specifics of what may happen in a particular office, but I assure my hon. Friend that the current level of services will be maintained.

Does my right hon. Friend accept that, in order to maintain the number of hours that an office is open to the public if a back office closes, it will be necessary to employ more face-to-face staff?

I do not want to pre-empt anything that might come out of the consultation and review, but where those considerations are being made, my hon. Friend is right. I will look to the professionals charged with responsibility for managing the decisions for the details. Her point is sensible, and such considerations will be taken into account. I hope that I have reassured her, without going too far into the details.

The new department has been asked to draw up plans to improve services and to reduce costs over the next five years. The Government will invest significantly in each of those years to improve HMRC services.

My hon. Friend the Member for South Derbyshire (Mr. Todd) has asked on a number of occasions about the detailed business case. HMRC’s business case is predicated on improving services for customers by re-engineering its processes; strengthening compliance—those who have had concerns about the compliance effort should be reassured—achieving efficiencies that, in part, will release the 25,000 posts that I mentioned; and releasing up to 40 per cent. of excess estate, which is costing more than £100 million. While the impact assessment may reflect the costs of a single building and the likely cost of staff moving, it cannot cover each of the national savings noted above.

Similarly, my hon. Friend the Member for Burton asked about the effect of job cuts and local office closures, and expressed her concerns about compliance yield and local knowledge. That issue was raised in an Adjournment debate last week. There is no question but that local knowledge is important for compliance work, but the local compliance presence does not always need to be quite as local as it is now. Co- locating teams from former Inland Revenue and former Customs and Excise will enable them to work more effectively, and HMRC can continue to protect revenue by greater assessment of risk and the use of intelligence.

As my hon. Friend and others are aware, HMRC has designed a systematic approach of review, consultation and announcements on decisions. It is amazing how time flies, and I am aware that my time is coming to an end. I assure my hon. Friend the Member for Amber Valley (Judy Mallaber) that I will take account of all the submissions that have been made, including representations in this debate, before any decisions are made. We are caught between a rock and a hard place. I do not want to make an announcement—I have not had any advice on this—before the end of term, and no announcements will be made until the House resumes, so that hon. Members have an opportunity to comment.

During the remaining seconds, may I say that, as a former trade union official, I compliment the managers charged with taking forward these changes on the care that they are taking to ensure that individual members of staff, whose concerns my hon. Friend rightly raised, are dealt with as fairly as possible?

Forest Protection

Earlier this year, the Governments of Brunei Darussalam, Malaysia and Indonesia signed an important declaration on the “Heart of Borneo” initiative. Those three countries have one conservation vision, recognising the importance of their island, as they refer to it, as “a life support system”. The initiative involves voluntary trans-boundary co-operation that is based, as they declare, “on local wisdom” and “on sustainable development principles”. As such, the declaration brings together two agendas that have for far too long been kept apart. It may have been convenient for non-governmental organisations and Governments to separate developmental issues from environmental ones, but in truth they represent one agenda. Environmental sustainability will not happen if in order to achieve it we ask the world’s poor to sacrifice economic growth and development. Equally, development that is not environmentally sustainable undermines its own foundations, as the Stern report recently highlighted.

I know that my hon. Friend the Minister recognises that point, and I welcome the fact that his previous boss as Secretary of State for International Development, our right hon. Friend the Member for Leeds, Central (Hilary Benn), has now taken over as Secretary of State for Environment, Food and Rural Affairs, strengthening further the links between the two Departments. Our right hon. Friend worked tirelessly on the issue of combating illegal logging in Indonesia. The “Heart of Borneo” declaration expresses that common environmental and developmental agenda in the following way:

“With one conservation vision and with a view to promote people’s welfare, we will cooperate in ensuring the effective management of forest resources and conservation of a network of protected areas, productive forests and other sustainable land-uses within an area which the three respective countries will designate as the ‘Heart of Borneo (HoB)’, thereby maintaining Bornean natural heritage for the benefit of present and future generations”.

I have worked closely with two of the three Ministers who signed that declaration—Minister bin Khalid from Malaysia and Minister Kaban from Indonesia—and in relation to Indonesia I want to put on the record today my admiration for just how far that country has moved since 1998 and the days of corruption under the Suharto regime, when the country was a kleptocracy. Today, it is a country putting in place protections under the law for its people and its quite extraordinary biota.

The island of Borneo is the third largest in the world, after Greenland and New Guinea, covering an area twice the size of Germany. Whereas Germany might boast approximately 2,700 different higher plant species, however, one mountain alone in Borneo, Mount Kinabaloo, has almost double that figure. The island as a whole registers more than 15,000—diversity as great as that in the whole of Africa.

Over the past 10 years, entirely new species to science have been discovered at a rate averaging three every month. That is true riches. It is based upon the rainforest, but it is worth immeasurably more as the basis for new drugs against cancer. There is the shrub that produces CBL316, a powerful new anti-cancer agent, and the compounds, calanolides A and B from the bintangor tree, which are effective against various strains of HIV. The forest also performs more mundane services for the local population, stabilising the climate, controlling soil erosion and regulating the supply of clean water. Those eco-system services are simply the essentials of life for 20 million people living on the island.

For the past decade the world has become progressively more aware of the importance of such services, of forests as carbon sinks and of their role in combating climate change. Deforestation is known to contribute approximately 20 per cent. of global greenhouse gas emissions every year, and for that reason illegal logging and oil palm plantations have recently been a focus of concern for the international community.

My hon. Friend the Minister well knows of my concerns in that area, but today I shall raise with him an equally serious threat to the Indonesian forest—that of open-cast coal mining. He will know from the work that his Department is doing with Indonesia in concluding a forest law enforcement, governance and trade voluntary partnership agreement, that the new, democratic Indonesian Government took commendably swift action to protect their remaining forests following the overthrow of the Suharto regime. On 30 September 1999, the Government enacted laws giving protected forest status to many of the remaining highland and key watershed areas. Included in that protected forest status were five out of seven concessions that the giant Anglo-Australian company BHP Billiton had, shall we say, secured under the Suharto regime.

Forestry law No. 41 of the statute book of the Republic of Indonesia in the year 1999 No. 167, addition to the national statute book No. 3888, clause 38, sub-clause 4 strictly states that open-cast coal mining is prohibited in protected forest areas. Having already invested approximately $40 million in exploring the potential of those concessions, BHP Billiton was not going to see them rendered effectively worthless without a fight. Along with a number of other companies, BHP Billiton lobbied to have the concessions reinstated. It did more than lobby: it threatened to bankrupt the fledgling democratic Government by launching legal proceedings to demand compensation. The new Parliament first refused to buckle, but that group of foreign companies applied significant international political pressure.

Questions to the Australian Senate have revealed a series of meetings at Australia’s Jakarta embassy, where BHP Billiton’s Andrew Wilson took a leading role. Those strategy meetings led directly to meetings between the Australian ambassador and a number of key Indonesian Ministries to press the companies’ financial interests over the communities’ national laws to protect their unique ecosystem. Eventually, Indonesia’s new President, Megawati Sukarnoputri, submitted a perpu overruling Parliament. The Indonesian constitution is quite clear that it is for Parliament to enact the laws. The President, under clause 22(1) of the constitution, has the power to issue a decree or Government regulation in lieu of a law, only when the country is in the grip of a national crisis. The national crisis in that case was the threat that BHP Billiton and other companies would bankrupt the new democracy by suing at international arbitration for $22 billion.

Whether that threat was real or not, it was effective. The perpu specified that the 13 companies’ forest area mining permits, which predated forestry law 41 of 1999, should remain effective for their originally intended span. The constitutional court considered a challenge to the perpu, and it found that under Indonesian law a concession or contract of work is granted to a mining company to exclude others from mining in a certain area, and that it does not comprise a permit for exploitation. A company holding a contract of work may carry out exploration, but it gains a licence for exploitation only when its mining plan and environment impact assessment of a particular site have received Government approval.

Ultimately, the constitutional court ruled that when six companies that are still at the stage of exploration or of feasibility studies enter the exploitation stage, they must comply with the requirements in clause 38(4) of forestry law 41 of 1999, which prohibits open-cast mining in protected areas. Hence, six of the 13 companies listed in the presidential decree are prohibited from open-pit mining in protected forest.

None of the five BHP Billiton concessions in the heart of Borneo benefited from the 2004 perpu. To safeguard its investment in those coalfields, BHP Billiton required another way to secure the right to exploit them. The Maruwai coalfield is today represented on the BHP Billiton website as a contract of work for a deposit area measuring

“120 km by 60 km in a remote and isolated area that lies largely within the province of Central Kalimantan. The mining of the resource will see the development of infrastructure over a much wider area.”

The website says that the coal deposits contain a

“mid-volume hard coking coal resource which in stage 1 of the development will support the production of at least 1 million tonnes per annum (mpta) of coal. In stage 2, up to 5 mpta will be produced, potentially for up to a 20-year period. The Maruwai project is currently in a feasibility study phase which is aiming to bring online the stage 1 mining of the Lampunut deposit by the second half of 2008…This was due to its ability to be mined by open cut methods, its proximity to navigable rivers and its coal quality.”

It is no surprise that at the end of last year, new guidelines were issued for temporary use of forested areas. Under chapter 1 of Forest Regulations 14/mehut ii/2006, any forest

“which is considered ‘unsuitable’ for logging use can be considered for a change of status”

under a land swap or financial compensation deal. The acquired forest can be used for strategic purposes that include mining.

However, as far as the Maruwai coalfield and BHP Billiton are concerned, those convenient regulations contain a potentially fatal provision. Chapter 2(4)(2) of the regulations states that

“in protected forest, open cast mining is not permitted.”

Despite a presidential decree, a constitutional court case and a change in the regulations, BHP Billiton was left with the unfortunate result that the Maruwai coalfield could not be open-cast mined because it was inside a designated protected forest area in the heart of Borneo—thwarted by lines on a map, it seemed, until the maps themselves changed.

I have copies of documents, which I will happily make available to the Minister, showing BHP Billiton’s success in making approximately 20,000 hectares of protected forest disappear from official maps. So proud were the company’s staff of their two revisions of the maps that they boasted in a memo:

“Judge our success by the lines on the maps.”

What tools they used to bring about the changes I do not know—I can guess that it was more than an ink eraser. However, block Lampunut, the first stage of the exploitation, comprises 7,721 hectares, almost all of which used to lie within protected forest areas. Now, not a single hectare is shown to lie within such areas. The forest has simply disappeared from the maps.

Will the Minister give me a simple reassurance that he will ask his officials to raise the issue with their counterparts during their discussions about the forest law enforcement, governance and trade voluntary partnership agreement? In concluding a VPA under which UK and European taxpayers’ money will be used to improve forest governance, it is of the utmost importance to obtain clarity and stability in relation to the protected forest areas being discussed. It cannot be right that FLEGT agreements should be based on shifting sands.

I have laid substantial charges at the door of BHP Billiton, but I wish before closing also to lay an olive branch. The company acquired another licence in 1999—not in Indonesia, but from the inspector of mines in Sweden, in accordance with that country’s Minerals Act, to exploit the Manek area. The area is only 4 km from the Sarek national park, part of the Laponia world heritage site. The eastern part of the area is important to the Sami people, and the issuing of the permit resulted in three separate appeals. In that instance, BHP Billiton engaged in intensive consultation and ultimately decided to relinquish its exploration licence.

That was the right decision, not only for the Sami people but for BHP Billiton, which enhanced its reputation with the Sami and has now secured alternative drilling programmes in Sweden as a consequence. I cite that case in the belief that it could be a precedent for the heart of Borneo. I recognise that Sweden is a developed nation with a much longer legal tradition of land and property rights, but BHP Billiton professes to care not just about having a green image but about the environment.

Later this year, the world’s spotlight will fall on the Indonesian island of Bali as world leaders meet at the United Nations framework convention on climate change conference of the parties to discuss climate change issues and how to create financial mechanisms to avoid deforestation. They will meet in the same hotel that hosted the Coaltrans Asia conference last month, where BHP Billiton representatives gathered to be told that Indonesian coal production would steam ahead unfettered. The two conferences could not represent two more different futures for the heart of Borneo or for our planet.

I congratulate my hon. Friend the Member for Brent, North (Barry Gardiner) on securing this debate. It is entirely appropriate for me to acknowledge his considerable record of interest and activity in this policy area during the past 10 years. I look forward to continuing to work with him in his new role as the Prime Minister’s special envoy for forests.

My hon. Friend explained eloquently why forests in general, and the forests of Borneo in particular, are so important. He described changes in Borneo, many of which are recent and the result of considerable external influences, and many of which have occurred in the past 25 years.

The first major influence was the transmigration scheme, which brought people from Indonesia’s overcrowded islands to make a better living in Borneo. That created the infrastructure that opened up the island to logging on a grand scale to feed international markets. The rewards were considerable although, as my hon. Friend knows only too well, not everyone shared in them.

Anyone travelling up the Melawi river in west Borneo a generation ago would have marvelled at a landscape that had changed little in centuries. I am told that a traveller making the same journey today will find a very different world. There are still a few patches of good forest, but much of the more accessible land has been cleared of trees. Since the big logging companies arrived, the area has suffered a large reduction in game, wild fruit and many of the plants that local people have traditionally harvested from the forests. If one asked the villagers whether they were financially better off as a result of logging, there would be a mixed response. Some have earned a wage working for logging companies, but for many people logging has brought few lasting benefits.

There are similar stories in West Papua province, to the east of Borneo, where the Knasaimos people of Seremuk first felt the impact of illegal logging in 2002. It destroyed the livelihoods of many in the area and the social structure of many villages. However, illegal logging was stopped as a result of a crackdown by the Government in 2005, which helped local people take back control of their forests. They were able to map their land, measure their trees and work out a strict harvesting quota that would keep the forest healthy and productive. Unlike the logging company, they knew how to leave unharmed the sago palms and other plants on which they depend.

My hon. Friend rightly described the costs of logging and associated land clearing, which have led to an almost irretrievable loss of biodiversity in many parts of the world; to the loss of future livelihood opportunities that sustainable management of forests, rather than their liquidation, might have brought; to the release of enormous quantities of greenhouse gases that put Indonesia in the first division of the world’s emitters; and to air pollution that has damaged health and disrupted daily life and business in Borneo and neighbouring countries.

I join my hon. Friend in saying that the “Heart of Borneo” is a bold initiative. We in the Government welcome it, and congratulate the Governments of Indonesia, Malaysia and Brunei on their vision. It is only right that we should also congratulate the WWF and the other non-governmental organisations that are helping turn the vision of the “Heart of Borneo” idea into practical action. As my hon. Friend said, the initiative comes at a time when pressures on the remaining forests of Borneo are growing and when there is a greater awareness than ever of the benefits of conserving forests in respect of mitigating climate change. We have the campaigning work of my hon. Friend and others and the Stern review to thank for that.

That awareness brings closer the prospect of payments for reduced emissions from deforestation. That could help tip the balance of incentives in favour of keeping forests standing, rather than cutting them down. To help realise that potential, the British Government will build on the momentum created by the Stern review and the announcement made by my right hon. Friend the Prime Minister, when Chancellor in October 2006, on mobilising international resources for sustainable forest management.

So far, we have committed £50 million to protect forests and people in the Congo basin as part of the £800 million environment transformation fund, and we will play our part in the arrangements that follow the United Nations climate negotiations in Bali in December. The Department for International Development, the International Finance Corporation, the Hong Kong and Shanghai Banking Corporation and others have joined efforts to develop financing instruments, such as eco-securitisation, that will channel private investment into the sustainable management and conservation of forests such as those of Borneo.

As my hon. Friend said, the meeting in Bali will be an important event for forests. Our aim is to reach international agreement on the use of the carbon market for the second commitment period under the Kyoto protocol, after 2012, to give positive incentives to reduce emissions from deforestation. At the Heiligendamm summit, the G8 invited the World Bank to use the forest carbon partnership facility to develop the capacity of developing countries and to pilot approaches to reduced emissions from deforestation.

Indonesia is already moving in that direction, and the UK is providing help. For example, we are providing money and expertise to help the country develop the technical and institutional requirements to participate in payments for reduced emissions from deforestation, to conduct market analyses of prospective buyers of emissions reductions and to develop a portfolio of reduced emissions projects. We are also helping to establish an international framework that can help reduce deforestation. That is just one of the many ways in which we contribute to the aims of the “Heart of Borneo” initiative.

My hon. Friend will be aware that the Darwin initiative has funded considerable scientific research and capacity building in Indonesia and Malaysia. Some 16 projects, with a total value of £2.75 million, are under way at the moment. With others across Whitehall and the European Union, the Department for Environment, Food and Rural Affairs is working to develop social and environmental standards for biofuels. Right hon. and hon. Friends at the Foreign and Commonwealth Office are funding the “Heart of Borneo” implementation plan that will engage key stakeholders in planning future activities and identifying long-term roles and responsibilities.

As my hon. Friend said, DFID has been supporting forestry in Indonesia for the past 15 years. In recent years, our focus has been on helping improve conditions for forest reform. We have worked with civil society and Government organisations, through small grants and facilitation, to broker new relationships between citizens and the state. That has begun to transform forest policy making in Indonesia. As my hon. Friend said, marginalised groups now have a stronger voice and the state is responding with new policies and programmes. In turn, that is resulting in more livelihood opportunities and better environmental management.

As my hon. Friend will know, the Stern review recognises that clear property rights and better governance are fundamental to the avoidance of undesirable deforestation. Clear property rights are a precondition for investment in the management and conservation of forests. Where governance is weak and tenure unclear, powerful interests can capture forest resources and prejudice the interests of others. We need to accelerate the tenure and governance reforms that will deliver better outcomes for forests and people.

Evidence from around the world suggests that the time for that is now right. In 2006, Brazil, China, Indonesia, India, Russia and other countries announced reforms, and we will do more, across Government, to help those reform processes.

I am grateful to my hon. Friend for his response. In the few minutes that remain, will he simply give an assurance that his officials will raise two issues with officials from Indonesia? The first is the provision for land-swap arrangements that were introduced at the end of last year and the lack of clarity that they entail in the areas of protected forest. The second is the basis on which revisions to maps are agreed and publicised.

I was coming on to say to my hon. Friend that as he rightly described, the European Union is currently negotiating forest law enforcement, governance and trade partnership agreements with Malaysia and Indonesia. They will provide the future framework for our collaboration with those countries on matters of forest governance.

I shall take up the issues raised by my hon. Friend with the European Union so that it can be part of EU discussions with Indonesia. My hon. Friend is right to describe the expansion of open-cast mining in Borneo as a significant threat, which comes not only from the removal of the forest to get at coal, but from the infrastructure of settlements and roads associated with large-scale open-cast mining. I have no doubt that that subject will be very much in the minds of representatives of all three Governments when they meet tomorrow in Brunei Darussalam to agree on the boundary of the “Heart of Borneo” and, more generally, the timetable for tri-country plans.

As my hon. Friend knows, the UK has been working with Indonesia since 2002 to help improve governance and tackle illegal logging. As he will know only too well, it has not been easy, although we have seen a lot of progress, particularly in the past two years, and illegal logging has been greatly reduced. There is still considerable smuggling of logs across the border between Indonesia and Malaysia and that, too, threatens the forests of the heart of Borneo.

We will continue to work on the issues as I have described, and in the way that my hon. Friend knows—through the EU and the FLEGT partnerships that are under way. Through that process, we shall take up the concerns that my hon. Friend has raised today.

Sitting suspended until half-past Two o’clock.


Quite a few Members want to make speeches this afternoon. If contributions can be kept to around 10 minutes, I am sure that everyone can be accommodated.

It is a pleasure to speak under your chairmanship, Mr. Cummings. I welcome the Minister, whom I like and respect in equal measure, to his role. His elevation was overdue and well deserved, and I am delighted that he will be responding. I am grateful to the other Members present for coming, and for deciding to participate in a debate on a subject that is rising rapidly towards the top of the political agenda. That was shown at an early stage by the new Prime Minister’s announcement that the Minister for Housing would attend Cabinet, which demonstrates that this is now one of the biggest political issues in the country.

There is no doubt that there is a big problem with housing provision in this country. The subject of this debate is fairly wide-ranging, and I intend to touch on a number of issues, to which I hope the Minister can respond. First, we should set out some of the problems that we face. A typical first-time buyer is now unable to afford a mortgage in 93 per cent. of towns in the UK. Given recent interest rate rises and future ones to come, it appears that that situation will only get worse. We should be very concerned about that.

I welcome the debate. Does the hon. Gentleman accept that part of the reason for the unaffordability of homes for first-time buyers is the lack of housing supply over the longer term, and that one of the major bugbears is the failure of local communities to recognise the need for more house building?

I will come to that in a few moments. There is no doubt that we need to build more houses of all types. We undoubtedly need more private housing and it seems increasingly clear that we need more social housing provision, too. However, my concern and the focus of my contribution today is not so much the supply side, which the Government appear to be concentrating solely on, but the demand side.

I congratulate my hon. Friend on raising an important and topical issue. Although he is focusing on the demand side, does he accept that since I came into Parliament, the total number of immigrants to this country each year has increased by 300,000, that that is causing a massive increase in demand, and that it is one of the factors that we should take into account? I am not denigrating the immigrants themselves—this is a matter of public policy that has not been considered by the Government.

My hon. Friend is entirely right and he is certainly on to something. One issue that I want to focus on is the impact of immigration on housing provision.

There is no doubt that internal migration within the country and external migration into the country are factors—I am sure that the hon. Gentleman has read my Select Committee’s excellent report, which sets out all the figures, so they are hardly a secret—but will the hon. Gentleman consider demography? The happy fact that we are living longer is responsible for about 40 per cent. of the extra demand.

The hon. Lady is right, and I shall certainly not be suggesting that immigration is the only reason that we need more houses. A number of factors come into play, and my hon. Friend the Member for Castle Point (Bob Spink) rightly pointed out that immigration is one. We should not ignore it. The problem is that the Government have made some 17 statements—either oral or written—on housing, and yet not one has mentioned the effect that immigration is having on housing provision in this country. It is such an important factor that it surely cannot be right that of those 17 different statements, not one has touched on the impact of immigration.

Houses are becoming unaffordable for first-time buyers. Last year, we had the lowest annual total of first-time buyers since 1980—just 315,000. To strike a contrast, back in 1997 there were 503,000 first-time buyers. That shows the scale of the problem that we face. Fewer people are getting on to the housing ladder, and last year saw one of the first falls in the number of owner-occupied houses in this country. The Government should be ashamed of that and anxious to do something about it.

On affordability, the National Housing Federation states that in my local authority area—I would have thought that Bradford was one of the most affordable places in the country, not one of the least—the average house price is about £123,000. The average annual income needed for a mortgage to cover that figure is more than £33,000; however, the average income in Bradford is just over £19,000. Couples might just about be able to afford to buy a house, but in many cases they might not. Single people who want to get on the housing ladder when they leave university or school or enter work for the first time have little chance of getting into the housing market, even in Bradford. I am sure that that problem must be even worse in other parts of the country. We have a big problem.

The Government have decided that the answer is to build 3 million new homes over the next 20 years. My concern is that the focus seems to be entirely on supply. We are just accepting what is happening—and so we need to build 3 million new homes. There must be some mileage in considering the demand side of the equation, as well as the supply side. We are a small island—we cannot get away from our geographical nature—and surely we cannot just keep building more new houses in to the future. Surely someone will say, “That’s it. We’re not prepared to give up any more green fields, green belt, gardens or land.” I am not entirely sure when that point will come, or when the Government think that it will come. Surely it is not sustainable to build 3 million houses every 20 years. At some point, that will have to come to an end.

Is it not deeply disingenuous of the hon. Gentleman, despite his earlier protestations, to make the case that the need for additional housing is primarily or even largely driven by immigration? As my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) said, the increased longevity of Britons is a key factor. In addition, a fundamental driver is household change. The real demand has come because families are no longer living together in the numbers that they used to. Those two factors are overwhelmingly driving the increase in demand. It is disgraceful of him to place that burden on immigration.

I understand the hon. Lady’s reluctance to get into a debate about immigration and its impact on housing. That is part of the problem with which we have been dealing: nobody will address the issues. She is absolutely right. I said earlier that there are many factors at play, and that immigration is only one. Family breakdown is certainly another, and it is a subject that I shall also mention. I have not even come to the numbers yet, so the hon. Lady is not aware of the extent to which I am claiming that immigration plays a role.

My hon. Friend may have seen in the Hansard for 17 July that the party colleague of the hon. Member for Regent's Park and Kensington, North (Ms Buck), the right hon. Member for Birkenhead (Mr. Field), said:

“In the last three years for which we have data, the number of people coming to this country is about 2 million and the number leaving is about 1 million.”—[Official Report, Westminster Hall, 17 July 2007; Vol. 463, c. 8-9WH.]

Those figures may help my hon. Friend to judge the level of housing demand that flows from immigration. He will know that if the House does not address this issue, we will leave a vacuum into which the fundamentalist parties will come, which will be bad for immigrants and for our democracy.

My hon. Friend is right and I shall come to the figures. In passing, I pay tribute to Sir Andrew Green of Migrationwatch UK, who has used Government figures—not his own—to highlight the problem that we face. I also pay tribute to my hon. Friend the Member for Mid-Sussex (Mr. Soames), who secured an informative and good debate yesterday on immigration and touched on the issue of housing, and to my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), who has done a great deal of work in this field. He has published a pamphlet called, “Too Much of a Good Thing? – Towards a balanced approach to immigration”. I think that it is available in all good bookshops, and I urge Members to have a look at it and to read yesterday’s debate, in which my hon. Friend the Member for Mid-Sussex made some pertinent points.

According to the Government’s own figures, 31 per cent. of the new houses built are needed to deal with immigration. That means that of the 3 million houses that the Government have said need to be built, by their own admission 1 million are needed to deal with future migration into this country. They are needed to deal not with the current level of immigration, but with the Government’s projection of future migration, accepting their estimate that there will be a 30 per cent. drop in immigration, and factoring in their figures. That is how much immigration affects the amount of housing required. It is no good our trying to pretend that those figures are not there—they are the Government’s own and we cannot sweep them under the carpet.

The number of asylum seekers granted permission to stay in the UK has exceeded the number of new social houses built by nearly 40,000 in the 10 years since 1997. The number of grants of asylum and extended leave to remain has totalled more than 228,000, compared with the 188,000 additional social and local authority homes built in the period. That is clearly unsustainable. The Government cannot allow it to continue, and then wonder why there is such a shortage of housing at local authority level and for first-time buyers.

Currently, one migrant a minute is coming into this country—the equivalent in population terms of a city the size of Birmingham every three years or so. That level of immigration is completely unsustainable, and unless the Government get to grips with the issue and we have a controlled and sustainable level of immigration, we will not solve the housing crisis that we face.

Would the hon. Gentleman care to say how many people are leaving the country because they are emigrating? Would he also care to say, since he is so keen on the subject, why successive Governments, particularly those of his own party, built so few social houses and encouraged the sale of existing social stock?

My hon. Friend the Member for Castle Point made clear the net level of immigration. People are leaving the country, but far more people are coming in—that was my hon. Friend’s point. The shortage of social housing is largely fuelled by the increase in the number of people coming into the country through immigration, as the hon. Gentleman will find if he speaks to his colleagues in parts of the east end of London, where this issue is significant.

The hon. Gentleman has made a serious suggestion—I shall not use the word “allegation”, as it is a bit pejorative. Would he like to set out exactly what his evidence is? May I suggest that he should not argue about one area of the country and then generalise from it, as he has just done? The figures clearly show that most migrants to this country go to London. Just as 800,000 people, largely young families, are leaving London every year for the wider south-east, 800,000 migrants from abroad are coming into London to fill the employment gaps left. The hon. Gentleman should not suggest that that is happening across the country and that migration is therefore causing the pressure on social housing. The pressure is everywhere, whether or not there are migrants there.

The hon. Lady makes a fair point, but I was referring to my part of the world—that was the purpose of my seeking the debate. There has been a big increase in the amount of migration into Bradford over many years and particularly in recent years. The point that I was making to the hon. Member for Islington, North (Jeremy Corbyn) is that there is a severe shortage of social housing in certain parts of London, caused by immigration.

I shall make some progress. I know that others wish to speak, and we could get bogged down for a very long time on this one issue.

I hope that the Government will indicate what effect they feel immigration has had on the amount of new housing required and what they intend to do about it. Do they accept that we need a limit on immigration to this country, and does the Minister accept the figure that I gave—that one third of new housing is needed to deal with immigration?

To pick up the point made by the hon. Member for Milton Keynes, South-West (Dr. Starkey), according to Government figures a lot of the growth in housing need is due to the increase in one-person households. Part of the problem is demographic—nobody would dispute that—but it is also partly caused by family breakdown. A charity based in my constituency called Nightstop UK does a fantastic job in dealing with homeless people between the ages of 16 and 24. I highlight it because it does a superb job across the country in helping young homeless people to find homes.

When homeless people come to Nightstop UK, it does a survey and asks them what the factors relating to their homelessness are. Between 2001 and 2006, 44 per cent.—the single biggest figure—of young people who went to it said that family breakdown was the biggest reason for their homelessness; only 3 per cent. said that it was a lack of accommodation. Family breakdown in one form or another was driving their homelessness. I therefore encourage Members to examine carefully the recommendations made by my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) and his social justice policy review group. He made some brave and intelligent observations about what can be done to tackle family breakdown, which causes a great deal of misery to a lot of young people, not just in Shipley but across the country. We need to consider what we can do to tackle that problem.

Despite what I have said, I accept that we need more housing. If the Government were to tackle some of the issues driving the demand for housing, we would not need as much housing as they claim, but I accept that more houses need to be built. One issue to consider is where we are going to build them. I would not like them to be built on green belt land. The amount of housing built on such land has been one of my concerns in the past few years.

My hon. Friend the Member for Hertford and Stortford (Mr. Prisk) promoted a private Member’s Bill last year that would have introduced a rule whereby, once land had been allocated as green belt, it would be green belt for ever. If it is green belt land today, it should surely be green belt land tomorrow; that should not change. The Government will say, “There is as much green belt land now as there was in 1997.” [Hon. Members: “More.”] Indeed, but the issue is that it is not the same green belt land and it is not of the same quality. The Government build houses on some of the most beautiful parts of the country and replace those areas with land that most people would not consider green belt, and which is not of the same quality. To me, that is an erosion of the green belt, whether or not it is so in numbers terms.

Between 1997 and 2004, the Government allowed 162 planning applications for developments on green belt land, although they had the power to stop them. The aviation White Paper proposes aviation expansion resulting in the loss of 700 hectares of green belt land, and about 10,000 acres of green belt are at risk from proposals in draft Government regional plans, including land in Luton, Harlow, Bath, Bristol, Birmingham, Coventry, Cheltenham, Gloucester, Bournemouth, Poole and Nottingham. I urge the Minister to consider seriously the impact of allowing developments on green belt land, and then trying to cover that up by replacing it with land that is not of the same nature or quality, and pretending that there has been no erosion of the green belt under this Government. It is clear that there has been.

That is a particular problem in my region of Yorkshire and Humber, where 17 per cent. of the land within 1997 designated green belt areas has changed to residential use. That strikes me as an incredibly high figure—the national average in England is 12 per cent. Five per cent. of new dwellings built between 1992 and 2001 were built in 1997 designated green belt areas. I find that unacceptable, and I seriously hope that the Minister will reconsider the protection that we give to green belt land, and not just replace it with other land.

I also hope that the Government will reflect on building on floodplains. We have seen the devastating consequences, particularly in parts of Yorkshire, of building houses on floodplains. This is also a big issue in the Yorkshire and Humber region. The amount of land changing to residential use and the percentage of new dwellings being built in 2002 flood-risk areas is 16 per cent. It is no good allowing and encouraging houses to be built on floodplains and then saying how sorry we are when many of them get flooded, particularly if the response is as inadequate as it has been in many areas, but that is a topic for a different occasion. I hope that if one positive thing comes out of the tragedy experienced in many parts of the country, but particularly in parts of Yorkshire, in the past few weeks, it will be that the Government think again about the sense of building lots of houses on floodplains. All that that does is cause a great deal of misery to many people.

I assume that the hon. Gentleman is aware of the new planning guidance that the Government introduced about a year ago—I am sure that the Minister will correct me if I have got the date wrong—which very much strengthens Environment Agency guidance to local authorities, and enables the agency to call in an application if the council goes ahead and refuses to listen to it. I imagine that the hon. Gentleman supports that Government measure, which will deal with the problem that he identifies.

The hon. Lady must consider the measure as a whole. In a few minutes, I shall discuss some of the pressures that local authorities face in finding places to build houses. Those pressures are driven by the Government’s policy on targets, and if she will bear with me, I will come to that issue shortly. I hope that the Minister will reflect on the problems of building houses on floodplains.

I would also like to see a reluctance to build houses on gardens. My hon. Friend the Member for Tunbridge Wells (Greg Clark) has done a great deal to promote a Bill to reclassify gardens from brownfield to greenfield sites. Of course, we all want more houses to be built on brownfield sites.

The hon. Gentleman will be aware that, because of the concerns that have been expressed throughout the country and, indeed, in this House, the Government have moved to change planning legislation in that regard. It is now possible for local planning authorities to reject such applications.

Indeed, and anything that strengthens the hand of local authorities to prevent building on gardens is a good thing, but it still does not deal with the possibility of Government planning inspectors overruling the local authority in such matters.

I will in a moment. I hope that there will be a presumption from now on that houses should not be built on gardens, because doing so blights local areas and completely changes the nature of villages. Places in my constituency such as Baildon, Eldwick and Menston have faced many such applications recently. I hope that there will be a presumption that houses should not be built on gardens and that gardens should be considered greenfield sites.

I congratulate my honourable neighbour on securing this debate. I apologise for the fact that the attractions of a delegated legislation Committee mean that I will not be able to stay until the end of the debate. Does he share my concern that local authorities such as Leeds and perhaps Bradford are not making sufficient use of their current planning powers—such as the action plans in the Planning and Compulsory Purchase Act 2004 and planning policy statement 3—to judge applications by the way that they meet housing need, rather than by the profit motive of developers? Also, is he satisfied that local authorities are doing enough to ensure that there is a sufficient proportion of affordable housing, and that that housing is truly affordable, when they do grant planning permission?

I have a great deal of sympathy with the points that the hon. Gentleman makes, but we should recognise that local authorities often find themselves in a difficult position when it comes to housing applications. They are faced with piles of planning guidance from central Government, and with targets set for them by the regions—even though the regional assemblies have now been abolished—for the number of houses that have to be built in a certain area. Local authorities have to factor in all those things when deciding on planning applications.

It is no good trying to pretend that local authorities have a free reign in dealing with planning applications, because, as we all know, they do not. They often operate under the threat of a developer taking his case to a planning inspector on appeal, and the planning inspector then overruling the local authority’s decision, at immense cost to the local authority and the council tax payer. We cannot ignore that factor in their deliberations. According to the Government’s figures, a planning inspector overrules a council’s decision in one third of cases, so that threat is always hanging over local authorities.

Will the hon. Gentleman accept my point that councils need to maximise the use of their powers to resist appeals and to substantiate the case before planning inspectors, but that often, they do not?

The hon. Gentleman makes a fair point, but I would like the Government to give local authorities more freedom in determining planning applications. At the end of the day, they are democratically accountable and best placed to know what is in the best interests of the local area. It is unfortunate that a planning inspector from Bristol will often visit a given area and overrule a democratically accountable and elected local authority that has made a decision that may be popular in the local community.

I certainly welcomed the announcement about abolishing regional assemblies—something that the Conservative party has called for for many years. My concern is that we have not actually moved away at all from the idea that a regional body of unelected, unaccountable and unwanted people should make decisions about the number of houses to be built in a particular area. The Minister accepted yesterday that the spatial planning strategies will still be going ahead as planned, and that the number of houses that the regional body, at the behest of Government policy, will expect my local authority to build will therefore be unchanged. My local authority must find places for those houses, regardless of whether local people want them or whether there are suitable places for them. The local authority is under pressure to find places, so that housing targets can be met.

The Sustainable Communities Bill went through the House of Commons not too long ago with all-party support. Its purpose was to try to ensure that local communities have more say in what happens in their local area. If the Government truly support the Bill, I hope that they will give more power and freedom to local authorities to determine housing applications, without the spectre of planning inspectors and regional targets hanging over them.

I have one final point. I am aware that I have taken up a lot of time, Mr. Cummings, but I have tried to be generous with interventions. One of the things that really irritates my constituents, particularly in Baildon—the village in which I live—is that housing applications are approved and more and more buildings go up, yet there is no infrastructure to support them. In the surveys that I carry out, this is a big issue for local residents. All that happens is that traffic problems and the quality of life get worse. Local people would be much happier if they felt that the infrastructure support followed the amount of housing.

The hon. Gentleman cannot have it both ways. We either have a housing shortage or we do not. If we do have a housing shortage, it has to be met and there has to be building somewhere. The point that he makes about the Sustainable Communities Bill is a fair one, but the issue is one for local authorities to decide—including, I suggest, his own. I was on the Committee that considered that Bill, and the thrust of it is that all the appropriate community infrastructure, such as schools, community centres, doctors and so on, must be in place when substantial development takes place. That is basic sense for any planning authority. I am surprised that his planning authorities have not learnt that. What have they been doing over the years?

The hon. Gentleman says that these are basic matters, but this is an issue all around the country. I do not know whether my local authority is unique in terms of the problems that it has experienced. I suspect not, because the issue of housing developments going up and the infrastructure not being there to support them has been raised in virtually every local authority in the country. There are certainly places in my constituency where houses are built and where every available piece of land is sold off to developers and built on. Yet no extra roads or infrastructure is put in place to support those houses, which exacerbates people’s frustration about the number of new houses that are built. The hon. Member for Pudsey (Mr. Truswell) will know that well, because there is a new planning application on his side of the constituency boundary near Menston, which borders my part of the constituency. A heap of houses are going up on an already congested road, but there will be no more roads built to support them, which just creates more problems for local residents. That is a big problem all around the country.

I assume that the development that the hon. Gentleman is talking about is High Royds. We have known about it for 10 years or more, so the local authority had a huge amount of time to plan, but it never did. That is the point that Labour Members are trying to make: planning powers are not being used as effectively as they could be to create a framework that anticipates pressure on the infrastructure.

I do not wish to get bogged down on a parochial matter, but the hon. Gentleman will also know that an extra 500 houses will be built on my side of the constituency boundary in Menston, on land on which the council did not want to build. The planning inspector put in the unitary development plan against the wishes of local people and the local council. Part of the issue is that the needs and wishes of local councils are overridden by Government bodies.

I apologise for having taken up so much time. I have had a quick canter around a few housing issues that affect my constituents, and which are of concern to many people in the country. I genuinely hope that the Minister will do his best to address some of the points that have been raised.

Housing is vital to my constituents, as it is to the whole country. I am pleased that it is now at the top of the political agenda, for which I have argued for some time. I congratulate the hon. Member for Shipley (Philip Davies) on securing the debate, although I disagree with some of his more provocative remarks on immigration and the green belt, which I will come back to later. I, too, would like to take this opportunity to congratulate my hon. Friend on his appointment and to welcome the innovation that the Minister for Housing now attends Cabinet.

I am particularly pleased about the strong emphasis on building new housing, particularly new social housing, in the draft legislative programme. Given the legacy of neglect that we inherited, the Government have a good record on investing in the refurbishment of social housing. Progress towards the decent homes standard is important, but not nearly enough has been done to increase supply, both of social housing and affordable housing to buy. That means that in my constituency and many others, thousands of people endure the misery of inadequate and over-crowded housing conditions, which has an appalling effect on their quality of life and on their life chances.

As the drive for more housing gathers pace and with the Green Paper in mind, I am particularly concerned that nothing in that Green Paper or in the language used to describe our housing approach closes off the option of development on appropriate green belt land near Oxford. In the circumstances confronting our area, we must have an urban extension to Oxford if we are to meet housing need, and there is nowhere else for that to go but on present green belt land because green belt boundaries are drawn so close to the built-up area of the city.

Housing provision is a key local concern to those in housing need and to the many people who have grown up in the city and who cannot now afford to live there. The impact of housing provision on the labour market, public services and business activity is raised with me all the time, whether I am meeting the chamber of commerce, the CBI, the Federation of Small Businesses, universities, hospitals, or the trade unions. Just about everybody with an interest in housing provision and the economic vitality of Oxford, which is at the cutting edge of regional and national growth and could contribute still more given room to grow, accepts that we have to modify the green belt. I and local councillors have campaigned hard on this issue. Readiness to go ahead with an urban extension is synonymous locally with being serious about tackling the housing crisis.

There is an overwhelmingly strong case for building more housing in the south-east, particularly in central Oxfordshire. The city’s housing needs survey, which was conducted by Fordhams, identified a need for 1,700 to 1,800 new affordable properties a year. I would like to press the case for agreeing with the “Barker Review of Land Use Planning”, which states that the green belt policy

“has…in some parts of Southern England...had some unsatisfactory consequences”.

Barker’s interim report notes that there are now some 27,000 more jobs than residents in Oxford, which has led to large numbers of commuters “jumping”—to use the phrase that she used—the green belt every day. Of course, in practice, people are not so much jumping the green belt as crawling through it in the polluting traffic jams that creep in and out of the city each day.

Recommendation 9 of the Barker review states:

“Regional planning bodies and local planning authorities should review green belt boundaries as part of their regional spatial strategy/local development framework processes to ensure that they remain relevant and appropriate, given the need to ensure that any planned development takes place in the most sustainable location”.

Sitting suspended for a Division in the House.

On resuming—

To meet the enormous backlog of social housing need in Oxford there is a strong case for one or more urban extensions of the city into the green belt, with a compensating extension of the green belt elsewhere. The city has unique economic needs, which can best be met within or adjacent to it. The substantial scale of housing needs within the central Oxfordshire sub-region cannot be accommodated in the county’s towns alone. There is an opportunity to build truly sustainable communities, associated with the city; also, new infrastructure is more sustainable and the associated costs are lower in proximity to the city.

Oxford city already has a very good brownfield development record. It is consistently the local authority with the highest rate in the country of reuse of existing sites for development. Yet that development has manifestly failed to meet the city’s substantial need for new homes. Moreover, the scope for additional housing in the built-up area is rapidly becoming exhausted, with unacceptable pressures on existing residential areas and green spaces in the city, including gardens, which the hon. Gentleman talked about. I very much hope that with the Green Paper and the south-east plan examination under way, the chance will now be taken to review the central Oxfordshire green belt, in the light of the overwhelming evidence, as well as the recommendations of the Barker review.

Before I draw my remarks to a close, let me knock on the head the nonsense that is heard from opponents of house building that those of us who believe in tackling market failure and responding to people’s real housing needs somehow want to concrete over south-east England. Nothing could be further from the truth. As the Barker review analysis showed, outside London just 12.2 per cent. of land is currently developed. We can both build the extra houses that are needed and preserve the distinctive beauty of the English countryside. We can also respect the greatest aesthetic and ecological characteristic of cities such as Oxford by protecting the green wedges—the corridors of countryside that come right into the city centre, which, if we do not review the green belt, will come under inexorable pressure.

Some hon. Members may have seen a comment piece by Tristram Hunt in The Observer last Sunday, which claimed that Ministers

“advocated ripping up Britain’s green belt to solve the housing crisis.”

Ministers have said no such thing. They have argued that the primary source of land for new housing should be brownfield sites, but that local circumstances must be examined through the planning process. My argument is that within the overall provision of green belt protection we urgently need a review of the green belt in central Oxfordshire, to provide for housing and the continued economic vitality of the city. Those such as Tristram Hunt and the Campaign to Protect Rural England who maintain blanket opposition to any building in the green belt fail to understand that although it has an important role in preventing urban sprawl it is also responsible, in places such as Oxford, for urban strangulation. Such cities face enormous pressures, because of an over-tight green belt, including the loss of valued green spaces inside the city, the proliferation of houses in multiple occupation and flats, which are destroying the character of residential areas, the environmental degradation and congestion caused by thousands of commuters crossing the green belt every day, and a catastrophic housing shortage, with a real risk that Oxford and places like it will become affordable only to a small elite.

Mr. Hunt suggested in his article that developing part of the green belt might

“butter up the Home Builders Federation”.

My message to him is that it would alleviate the suffering and distress of families who live in overcrowded conditions, whose children cannot live in the city they grew up in, and would do something to help those in temporary or inadequate privately rented accommodation. I urge my hon. Friends in Government to be resolute and energetic in the drive for the new homes that we need, and, where the social, environmental and economic arguments point to the need for modest changes in the green belt, to get on and make them, using, of course, all the proper procedures, so that those whom we represent, who need and deserve decent housing, can get it.

I, too, congratulate the hon. Member for Shipley (Philip Davies) on securing the debate, and welcome my hon. Friend the Minister to his position. Like my right hon. Friend the Member for Oxford, East (Mr. Smith) I also welcome the higher profile that housing has now secured, even if I do not necessarily welcome all the ways in which the issue is presented, including some that we heard from the hon. Gentleman. We look forward very much to next week’s housing Green Paper as a further demonstration of the Government’s renewed commitment to tackling what we all agree is both a crisis of affordable housing to buy and, particularly, a shortage of rented accommodation for people in housing need.

It is important to understand the full range of reasons that have driven that level of housing need in recent years. We accept that there is now a backlog affecting housing provision, because of a decades-long failure of the house building industry to meet need. It was only two years ago that private sector house building fell to its lowest rate since 1926. The pent-up demand that is now in the system is in large part driven by that failure. Of course, in the social rented sector it is also driven by a near halving of supply in many areas of the country, because of the impact of the right to buy. We all support the right to buy. It represented, in many ways, the biggest shift of wealth to poorer people that has ever happened in this country. However, for decades we failed to replace the stock, and as a consequence the people occupying many of the properties that were sold under the right to buy are no longer of the same profile as those who seek social rented housing. They are the ones who have borne the brunt of the impact.

I think that all Labour Members recognise also—I am sure that we shall hear more about this, Mr. Cummings, if my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey), who chairs the Select Committee on Communities and Local Government, catches your eye—that there has been a rise in demand, which is driven by several factors. Those include, certainly, household change and the growth of single person households, the impact of the buy-to-let market and second home ownership, which have also had a significant impact on housing provision, and, indeed, to a certain extent, migration.

I, certainly, have no difficulty with discussing the impact of migration on housing, but, of course, this is not a debate on migration, and it is important that we try to focus only on the implications for housing. However, let us be very clear about who these people are, and why, in certain cases, we have a housing obligation to them. Primary immigration to this country has not occurred for decades. People arriving in this country are doing so through a number of routes, and some of them are entitled to housing, particularly social housing, but many, of course, are not.

In my constituency, I have seen the impact of immigration through the refugee and asylum routes. I invite the hon. Gentleman, and anyone else who doubts the legitimacy of the housing claims of people in that situation, to come and meet some of those individuals, and to tell me that they do not have a reasonable claim to social housing. Under this blanket description of migration and its impact on housing, we are in grave danger of forgetting human beings: who they are, what their circumstances are and the fact that, in many cases, they have come from the worst places and circumstances in the world. We have an absolute obligation to ensure that their needs are met.

My hon. Friend has just made an excellent point, but would she agree that those who have fled persecution and made their homes in this country are making a fantastic economic and social contribution to our society? Without the levels of migration that we have had, London would simply stop.

My hon. Friend makes an excellent point. One need only look at London’s public services, and hospitality and retail industries to see that that is the case. The statistics, of course, bear that out.

Setting aside asylum seekers who, of course, do not qualify for social housing, as well as those who have had a claim for asylum accepted, and become refugees and British citizens, many migrants simply do not have a claim to social housing. That is often forgotten given this blanket acceptance that migrants can arrive off the boat or through the channel tunnel and immediately be given priority on the housing waiting list; and I am afraid that quite often that mythology is consciously stirred up, which causes enormous damage to community cohesion.

The truth is that competition for social rented housing has come about because the number of people—there has been a relatively modest increase—seeking social housing are being squashed into an ever reducing number of social rented tenancies. If, through the additional investment that we are looking forward to in the comprehensive spending review and proposals in the housing Green Paper, we can redress some of that shortfall, not only will we meet the desperate housing needs of the homeless and those living in seriously over-crowded housing, but we will do something very important for community cohesion.

Does the hon. Lady not think that after 10 years of a Labour Government, something should have been done already? In those 10 years, the situation has got much worse, rather than better. Is that not a sad indictment of this Labour Government?

The number of times that I have said in this place that I am personally disappointed that the building of social housing has not been a higher priority for the Government would probably run into three figures. I think that it should have been a priority, but unfortunately that has not been the case, although in fairness to the Government they have been dealing with a decades-long backlog of housing in poor condition, because it was neglected by the previous Administration, and billions have been spent on the decent homes initiative, which has improved the quality of life for tens of thousands in my constituency. Not everything can be a priority at the same time, but I would have liked to have seen more house building.

We are now seeing, however, an extension of house building in London. I welcome very much the fact that the Mayor of London has given housing such a high priority; his housing strategy is driving forward additional housing construction. However, I ask my hon. Friend, the Minister, to keep his eye on the ball, because some local councils, particularly Conservative ones, are saying, on the one hand, “We want more house building,” but, on the other hand, when it comes to house building in their local areas, they are saying, “No, we are putting up the signs. We are full here and we do not want any more homes.” Sadly, that has been exacerbated since a number of councils became Conservative-controlled last year following the London elections. We have seen an immediate reduction in the number of properties coming on stream and being made available.

My hon. Friend has made exactly my point, and I hope that the Minister will address it in his closing remarks. If the onus again is to be put on councils to build houses—we welcome that commitment—what do the Government intend to do about Conservative councils such as Wandsworth borough council, which is building about 12 per cent. affordable housing, and Hammersmith and Fulham council, which is halving the targets for affordable housing in its borough? Fuelled by the sort of inflammatory remarks that we hear from Opposition Members, there is a willingness to decrease the amount of social housing, rather than to increase it.

I believe that the last period for which we have figures showed that my council in Westminster achieved only 21 per cent. of housing building at the affordable end of the spectrum, against a target of 50 per cent. We need not just more house building, but more that is not at the luxury end of the market. Luxury house building was one of the reasons that even properties being built were not providing homes for first-time buyers and those who do not have hundreds of thousands of pounds to spend on their own homes.

Supply is the key to resolving many of these problems, and we need a grown-up contribution from politicians of all parties and councils. We cannot build houses in the abstract; they have to be built in communities. Local councils and politicians need to show some leadership, step up to the plate, demand sustainability and ensure that facilities are in place to support those communities. They must also take on the leadership role to ensure more homes.

I have one or two other quick points: although supply is the key, the Government need to do a lot more on the demand side of the equation. I am not with the hon. Member for Shipley and some of his proposals, but we must ensure that we have a home swap system that actually works. Many people want to exchange their own homes, but we have not had in place for a long time, I am afraid, an effective mechanism that allows people choice and flexibility in moving between homes.

We need also proper investment in measures that allow those under-occupying to trade properties for ones that they want. Hundreds of thousands of people are living in homes too large, strictly speaking, for their household size. Those are their homes and nobody should force them to move, but many of them would move if an option were available that met their needs and they were given an incentive. A financial incentive of a meaningful size would be a considerably cheaper strategy than house building. I am afraid that it beggars belief that we have not managed to crack that particular nut.

I, and many of my colleagues, were very relieved when the recent John Hills inquiry into social housing rejected the siren calls for an end to the security of tenancies for people in social housing. However, it was alarming once again to see a report launched this morning by the Smith Institute, which flags up the possibility of ending the security of tenure. That report opened with the words:

“Shelter and security are the most basic of human needs”.

And so say all of us. It made other good points:

“The government should stop talking up home ownership as the only solution”—

to housing pressures—

“and support the rapid expansion of the rented sector and social housing in particular.”

So there is much to commend.

However, the report went on to say, alarmingly, that a

“simple reapplication for tenancy every five years”

would ensure that those who remained eligible for social rented accommodation would remain in that accommodation. Presumably, if they were not eligible, they would be out on their ear. That must be resisted. It would be a disaster of epic proportions for those people who are often the most vulnerable in society, many of whom have been down the homelessness route, if they thought that they had a home for life and the rug was pulled out from under them. I hope that the Minister will take this opportunity to say that that proposal is unacceptable and would damage only those people who need most assistance.

The current measure has been a long time coming, but we need more measures than simply the expansion of social housing and house building generally—which the Government have announced—including measures to tackle demand. Let us get on with that task and ensure that local councils are part of the solution and not part of the problem. Above all, let us not scapegoat individuals, be they homeless families, people in housing need or immigrants, as the sole cause of what is actually a very complex problem.

Contributions of no more than five minutes in length will allow another three hon. Members to speak before the winding-up speeches.

I will abide by your suggestion, Mr. Cummings. I welcome the debate and the fact that a Green Paper comes out next week. I hope that that Green Paper will at last enable the corner to be turned on the housing crisis in this country. I also hope that it will at last level the playing field for tenants of council estates or any other council tenant, so that the fourth option will be accepted and it will be legitimate for tenants to vote for an arm’s length management organisation, for a private finance initiative, for a stock transfer or to remain as council tenants and receive exactly the same investment and treatment that is so necessary for them.

I pay tribute to the Government for the amount of money that has been put into improving existing stock. My hon. Friend the Member for Regent’s Park and Kensington, North (Ms Buck) is correct to say that that has been a major priority and it has meant a real change in the lives of many people who now have new kitchens, new roofs, new windows and new heating systems. There has been fundamentally a great improvement. That issue was sadly neglected by the Conservative Government in all those 18 years. There has been a major improvement and a major step forward.

The area that I represent, like that of my hon. Friend, is inner-city London, where the housing crisis is most acute. I hope that the Green Paper will recognise that unless a substantial number of council properties are built in the areas of highest housing stress, we will all pay a price. More than 900,000 children in this country live in grossly overcrowded accommodation. The effect on their lives is dramatic. They underachieve at school, they over-attend at doctors’ surgeries and hospitals, and they overachieve in crime and social disorder. Teenage children growing up in overcrowded flats on estates or anywhere else simply cannot socialise at home. Therefore they go out, and all the other problems emanate from that.

If we want to improve social cohesion in our society, the best way to do that is through huge investment in the housing needs of the very poorest and most vulnerable people in our society. The current crisis means that local authorities cannot house people in normal council housing or with registered social landlords or housing associations, because there is nowhere for them to go. Instead, they are put in private rented accommodation, most of which is paid for through housing benefit.

I shall give an example. This morning, I visited a family living in a one-bedroomed flat—two teenage children, one small child and the parents were all sharing one tiny bedroom. The flat was damp, mice-infested and leaked, and the extraction equipment of the restaurant down below pumped straight into the bedroom windows. That is a private rented flat. The rent is £780 a month, all of which is paid through housing benefit. In other words, the public sector is paying £780 a month for a family to live in absolute misery. The only beneficiaries from that are the private sector landlords. It is simply an insane form of investment. How much better would it be to put money into bricks and mortar and build new places, rather than subsidising slum landlords, who exist all over London at present? I hope that when the housing Green Paper comes out, we will understand the absolute priority that should be attached to doing that.

I hope that the Green Paper, in recognising housing needs, will also recognise that many people living in the private rented sector, who do not necessarily depend on benefits to stay there but who are paying a very high rent, look to have some form of control and security—some form of secure future. In my constituency, there has been a very big increase in buy to rent. That means that many people are living unstable and insecure lives. Some form of security is needed for people living in that situation.

As I have only five minutes in which to speak, my last point will be on registered social landlords and housing associations. I recognise that RSLs have built quite a lot of places, although unfortunately nowhere near enough, as councils have not built anything over the past few years. There are questions about the management of housing associations, the efficiency of that management and the accountability of those who manage housing associations. I hope that the Green Paper will look towards a degree of accountability in that respect, because many of my constituents have real problems with housing associations, and housing associations themselves have financial problems that too often they solve by selling off vacant flats that are desperately needed for the social sector.

I hope that the Government will recognise that yes, we have had great achievements in improving existing council stock, but we must provide new homes for social rent. I say that because 75 or 80 per cent. of people in my constituency have no chance whatever of buying anywhere. The only route out of misery and poverty for them is through the provision of good-quality social housing through the local authorities. I hope that the Green Paper will recognise that and that we will turn the corner and end the misery being experienced by so many people living in inner-city Britain at the present time.

I shall use my constituency as an example of the way in which economic growth, a thriving economy, migration and housing are interlinked—not in the negative way that the hon. Member for Shipley (Philip Davies) described, but in an extremely positive way.

Milton Keynes, as everyone knows, is a new city; it is 40 years old this year, but is still relatively new. It has been an immensely successful place, largely, I have to say, because of where it is, which is absolutely the right place to attract industry without any public subsidy at all. As a result, over the past decade 35,500 jobs have been created in Milton Keynes, and obviously that has required the creation of housing for the individuals working in Milton Keynes, but even so we have net inward migration daily, according to the 2001 census, of 16,000 people. I am sure that the figure is much bigger now, but I do not actually have a hard figure. We still have considerably more jobs than houses. Nevertheless, over the past year Milton Keynes topped the league in the south-east for the number of houses that were built. Last year, it was 1,857 houses—nearly twice the number for the second-placed town, which is Basingstoke—and 777 of those were for housing associations. The majority would have been for shared ownership, but a significant number would have been social rented housing.

We are creating jobs and building new houses. On the whole, Milton Keynes is a huge success. It is a place that people like living in. It has many lovely green spaces. I never tire of reminding the House that it is built on greenfield land—what was low-grade agricultural land—and that the biodiversity level in Milton Keynes, as evidenced by surveys of animals, insects and plants, is hugely greater now than it was when it was the monoculture that pervades across most of the rest of that bit of Buckinghamshire.

Milton Keynes is green, it is a nice place to live, and people choose to go there because they like it. It is also a city that is built on migration. There are, obviously, people living there who were born there, but the vast majority of people in Milton Keynes, including me, have come from somewhere else. They have come either from somewhere else in the UK—many are from London—or from outside it. That has added to the vitality and innovative nature of Milton Keynes and is a huge asset to the whole community of Milton Keynes. It is not a deficit; it is an asset. We as a country should regard migration in that way—as an asset.

Apart from the fact that we get new skills and new people, we are also redressing the rather bizarre demographic balance of our population, which, because we are living longer, is very overburdened—if I may use that phrase, as an elderly person myself nearly—with people who are moving into retirement and therefore need people of working age to pay taxes to keep them in the manner to which we have all become accustomed. That is partly what the migrant population is doing. It is redressing our demographic imbalance and ensuring that we have a thriving economy so that those of us who are moving into retirement or are retired have some hope of having a decent retirement because there will be a decent working population paying taxes.

Notwithstanding the success that is Milton Keynes, there is still a huge demand for market housing, shared housing and particularly for social rented housing. The effect of that on families can be extremely detrimental. I was mildly amused by the hon. Gentleman’s comment that we should do something about family breakdown as that would reduce the need for housing. If we do not build more housing, there will be more family breakdown, because nothing is more conducive to family breakdown than families living in the sorts of situations that my hon. Friend the Member for Islington, North (Jeremy Corbyn) described, of which we are all aware from our constituencies—certainly we Labour Members are, anyway. There are families living in wholly unsuitable accommodation, usually in the private sector although there is sometimes overcrowding in the social sector, and paying enormous housing costs on top of that, so they are living in poor conditions and are under severe financial stress.

I seem to have overrun, but I want to throw another point into the pot about infrastructure. The next stage of development in Milton Keynes is a wonderful example of how the private and public sectors can work together to come up with a solution to deal with the infrastructure problem—the Milton Keynes infrastructure tariff, which is sometimes called a roof tax. We have been able to do that because we have a forward plan for the next 10 years and we know what infrastructure will be required with schools and so on. There is a list, which we can cost and then divvy up between the number of houses that are going to be built, which comes out at £18,500 per house. All the developers are happy to pay their share through section 106 because they know what it is being spent on and that the developers at the front-end will pay the same as those at the end. They know that, between them all, they will get the infrastructure that is required, thanks to the Treasury front-loading it as well, so that our schools are built before the houses are built. That model benefits everyone, and could be followed. Other local authorities should consider proper ways of using section 106.

I shall not give way to the hon. Lady, who has only just come in, as we are very tight on time.

Other councils should consider proper uses of section 106, particularly the Tory councils that argue that there should not be planning gain supplement. They must come up with more effective ways of using the gain that landowners and private developers get out of planning permission to pay for the infrastructure that facilitates their profits.

I congratulate the hon. Member for Shipley (Philip Davies) on securing this debate, but I suggest that there might have been a slight mismatch between the title of the debate and his contribution. I welcome the Minister to his new role and congratulate the Government on placing housing at the top of their agenda, as the hon. Gentleman said at the start of the debate.

The issue at the forefront is making housing affordable for the many and not just the few. Members on both sides of the House look forward to next week’s statement and Green Paper. Of course, there are demand issues, which we have talked about a little, but I think that the focus will primarily be on long-term supply, because such issues have developed over a long period. We can all remember back to the ’50s and ’60s, when it was not unusual for 300,000 houses to be built in a year. The Government are saying, and I agree wholeheartedly, that we need a significant and sustained increase in supply. The figure of 3 million houses has been mentioned, which I welcome as a recognition of the need that exists. We are also talking about a planning Bill to speed up the development process, and about partnerships between Departments in order to assemble the land that will make all that possible. We are doing all that in the context of trying to protect the environment and to build mainly on brownfield land.

I had a great deal of sympathy with the call of my right hon. Friend the Member for Oxford, East (Mr. Smith) for greater flexibility. We all know the problems: we face an acute housing shortage, and it is simple to see why. We are producing roughly 160,000 to 180,000 new homes a year, but household formation, of whatever sort, is running at 220,000 a year, so there is an enormous need out there. It is not just about first-time buyers, although they do face significant problems. In London, the average deposit for a first-time buyer is about £40,000. How many people can afford that? They are having to take on mortgages of five to six times their income. Such levels have not been seen since the 1980s, and it is tough out there for many first-time buyers.

Many people cannot afford to own their own house, and there are 500,000 overcrowded homes in the country. We all know the impact that that has on health, education and children’s future prospects. Some 90,000 people are homeless or in temporary accommodation, and I welcome the Government’s commitment to halving that number in the next few years. Given the enormous need out there, when people say, “Yes, we need to build more homes, but let’s not have too many or have them in my area,” I wonder how they would answer the question of how first-time buyers are to get on to the property ladder. What do they say about people who are homeless?

The case has been made that we need to increase supply; indeed, it was made by Kate Barker in her report, which said specifically that the level of market housing is relatively stable. The problem has primarily and most acutely been with the level of building of social, rented accommodation, which is at a quarter of that in the ’50s, ’60s and ’70s. We all know why that happened, and we need to respond. The Government have responded in some ways. They have recognised and increased the provision of social, rented accommodation in the past few years, particularly this year, but we need to do more if we are to solve our housing problem.

Cambridge university has carried out several studies on housing, and it suggests that we need 10,000 to 20,000 additional new homes per year. I do not suggest that those figures should be a target, but I understand that the Select Committee has endorsed them as a place to start, at least. We must recognise that there is a great deal more to do, and that there are ways of dealing with these matters. We should use more modern construction methods to build homes more quickly. I hope that the mythical £60,000 house that the previous Deputy Prime Minister used to talk about can still become a reality.

We also need to think about having more family-sized accommodation rather than the one and two-bedroom units that seem to be churned out. Infrastructure has been mentioned. We must all recognise that the sustainability of the communities that we are creating has to be a major priority—my right hon. Friend the Member for Oxford, East touched on that important issue. If we are to balance all the different aspects, we need to take regional factors into account. The Select Committee discussed that issue, and others have commented on it. The housing provision issues in London differ from those in the wider south-east or in Oxford. We need to take on board local opinion, knowledge and experience. The regional housing boards have an important role to play if we are to get the balance right regarding the type of accommodation that we are delivering.

Thank you, Mr. Cummings. I congratulate the hon. Member for Shipley (Philip Davies) on securing an important debate. Given the respect that I have for things that I have heard him say previously, regrettably, I cannot congratulate him on his analysis of the solutions to the housing problems facing this country. Family breakdown is an issue, but his party’s proposals for a tax break for married couples, irrespective of whether or not they have children, will hardly solve the problem, just as it did not in the 1970s. I was sad to hear him raise an immigration scare as being the answer to the housing problem.

The hon. Member for Milton Keynes, South-West (Dr. Starkey) talked about the Select Committee report and gave the example of 80,000 people from London moving out to the south and the same number of immigrants moving in. The 80,000 people moving into London would not constitute 80,000 households, because many of them are young, single, eastern Europeans coming to work temporarily, for two or three years, before going home with their savings, and they are living in rented flats in multiple occupation. I can think of a small number of Polish workers who are doing the same thing even in Chesterfield, which has a small immigrant population.

In my constituency, immigration accounts for 3 per cent. or less of the population, and many of those people are second or third-generation English people. A huge housing problem exists even there. The waiting list for social housing in Chesterfield has trebled in the past 10 years, and that has nothing to do with immigration.

There is a housing crisis, so, like the right hon. Member for Oxford, East (Mr. Smith), I am pleased that this debate is taking place. Like him, I have been raising the issue since I entered Parliament—that was six years ago. The hon. Member for Shipley rightly said that there was a need for more private house building. The home ownership figure in this country is 71 per cent.—the highest in Europe—and it is difficult to see how much higher that can be pushed. The private housing market is overheated and under-supplied; first-time buyers and key workers cannot buy. Last week, in response to a statement by the Prime Minister, one hon. Member gave the example of an affordable flat in London that went on the market at £300,000. That makes a nonsense of much of the talk about providing affordable housing for people to buy.

Unless we do something about the housing market, we are in danger of entering another negative equity slump such as the one that we experienced in the 1980s and early 1990s. Mortgage debt has increased by 150 per cent.; lending is at three to three-and-a-half times people’s income; interest rates have increased and are still climbing; the number of people in debt has doubled, and the number of repossessions has trebled this year compared with last year; and the fixed rates for the mortgages of 2 million people will end in the next 18 months. Therefore, the problem will get much worse in the near future.

Where will the new build come from to help us start to tackle the issue of the supply of houses for people to buy? The situation is not as bad as some people paint it: builders have a land bank for about 200,000 houses, which is a year’s supply; identified brownfield sites will provide about 1 million houses; and there is scope for 1 million new housing premises over shops and commercial premises in cities and towns across the country. If we were to let councils have more flexibility and control, instead of having to respond to diktat from regional government offices and from London, they, too, would be able to bring more land on stream.

My constituency contains brownfield sites that are waiting to be developed. It is doing a good job on brownfield sites. It also contains greenfield sites—not green belt sites—that were identified for housing nearly 30 years ago, but they are rightly not being brought into housing use until all the brownfield areas have been redeveloped.

The greatest gap in the speech made by the hon. Member for Shipley was on the need for social housing—I believe that he allocated just six words to that. The waiting list for social housing has increased from 1 million to 1.6 million in the 10 years of this Government, which is a disgrace. Some 1 million children live in overcrowded accommodation, and 130,000 children live in unsuitable, temporary accommodation. Councils have been forced to privatise their housing stock, and are starved of funds if they do not. Only 4,000 council houses were built in the past 10 years, compared with 400,000 in the first 10 years of even Mrs. Thatcher’s Government. We are told that housing associations are the answer, but they have not even built enough houses every year in the past 10 years to replace the right-to-buy losses.

Thank you, Mr. Cummings, but I am not the Home Secretary.

I congratulate my hon. Friend the Member for Shipley (Philip Davies) on securing this debate. The mere fact that there have been so many diverse contributions shows how interesting the House finds the subject of housing. I also congratulate the Minister on his first ministerial appearance in this Chamber. Perhaps he could take the message back to the House authorities that a full-day debate in Government time on housing would be worth the investment.

We are beginning to drill down into what the issues are. The hon. Member for Milton Keynes, South-West (Dr. Starkey) pointed out that longevity is one of the issues involved in the demand for housing. I am approaching my 60th birthday. I maintain that 60 is the new 40, but I am a victim of longevity. Several hon. Members referred to single-household formation and family breakdown, and those are also relevant issues.

I commend to all hon. Members the extensive report by the Commission on Social Justice, because its analysis is spot on and its recommendations will help us to move towards healing many places in our society.

I do not think that anyone disagreed with the view that migration was part of the reason for increased demand. There are many forms of migration, including internal migration, which the hon. Member for Milton Keynes, South-West mentioned. We are also well aware of positive inward migration into this country from other countries. It is accepted by the Government and is good for the economy. I do not have a problem with it, provided that it is controlled, that there are proper border police, and that we have clear knowledge about whom we are welcoming into this country.

The previous Home Secretary said that the Home Office was “not fit for purpose”. Part of the reason for that was that the immigration and nationality directorate was unable to deal with the flow of migrants and the people that we have here. That has been confirmed by a written answer that I received recently from the Home Office, saying that it would be five years before many cases will be sorted out. If people wait five years for a decision, not only will we have a dislocated society; we will also be unable to take the greatest advantage of those who are legitimately here, so that they can get into the economy.

Like everyone else, I look forward to next week’s Green Paper. I hope that it is in better shape than that reported by Peter Riddell in The Times, that there is meat and substance to it, and that it addresses the issue of the green belt. Last week, the Secretary of State indicated that she was thinking of not defending the green belt, but by that very afternoon No. 10 had issued a denial. I hope that the right hon. Member for Oxford, East (Mr. Smith) has noted that denial and that the green belt will remain inviolate.

Yesterday, a statement was made on ending the regional assemblies and giving control over housing to even more undemocratic organisations—the regional development agencies. I must declare an interest: my husband is not only leader of East Sussex county council but deputy chairman of the South East England Development Agency. There are issues on which he and I do not necessarily have to agree. This is already on the record, but I believe that SEEDA or any other development agency making any decisions about housing in the south-east takes away from local people control over their own environment. The best way to get people to acknowledge that they want housing is for them to own that decision, rather than for it to be dictated by central control, as is already the leitmotif of this new Government. After three weeks, we have gone back to the old socialism.

It is a pleasure to serve under your chairmanship for my first Westminster Hall debate as a Minister, Mr. Cummings. You are my next-door neighbour in terms of parliamentary constituencies.

I congratulate the hon. Member for Shipley (Philip Davies) on securing an important debate. I like and respect him too. We worked well together on the Modernisation Committee. This has been a fascinating and important debate, reflecting the importance of the subject. Its energy, vibrancy and passion have made it extremely interesting, although at times I thought that I was in a debate on immigration and that I had been transported back in time to the 1950s. It is important that we have had this debate to ensure that this issue is at the top of the political agenda.

I do not have much time left in which to speak. I want to respond to all the points made by hon. Members. If I do not manage to do so, with their permission, I shall write to them. As a starting point, it is worth setting out where we started. Over the past 10 years, a great deal of improvement has been made in housing. Home owners have seen the value of their properties increase, thanks in some degree to sustained economic growth, stability and an implicit recognition on the part of home owners that interest rates will remain historically low and stable for the foreseeable future. The number of households living in non-decent housing in the social sector has fallen by more than 1 million. Concerted action means that homelessness is down by nearly 30 per cent., and the number of people sleeping rough has fallen from 1,850 on a single night in 1998 to just over 500 last year. Local authorities are also on course to halve the number of households living in temporary accommodation by 2010.

A climate of economic growth and stability, unlike the boom and bust of previous decades, has led to 1 million more home owners over the past 10 years. I welcome that, because it is absolutely right—indeed, vital—that the Government facilitate such ambitions and aspiration for hard-working families.

Most hon. Members who participated in the debate referred to demographics and how that squeezes demand. We have an ageing population, and more of us are living alone as a result of social changes, which produces a demand for new and rented homes. That imbalance is growing as demand rises faster than supply. As house prices have increased faster than wages, it has become increasingly difficult for young people to get on the housing ladder. It is important that we act now to ensure that present and future generations can access the housing market and reap the benefits of home ownership.

Projections show that on average, from now until 2026, 223,000 additional households are needed each year. In 2006, 185,000 extra homes were delivered, giving a shortfall of almost 40,000 homes. Unless we act now to address the problem, the serious problems of affordability will continue to worsen, further pricing people out of the market. Let us be blunt. We cannot bury our heads in the sand, ignore the problem and hope that some other community will deal with the matter that Opposition Members have alluded to.

A fundamental question—I do not think the Conservative party has addressed it—is how to ensure that our children, first-time buyers and young families will be able to afford homes in their own communities without relying on help from their families. Some families cannot tap into wealth. We must do something about that, and the Government are addressing the matter in a way that other parties are not.

My hon. Friend the Member for Edmonton (Mr. Love) and others rightly mentioned the imbalance in supply. In her review of housing supply, which was published in 2004, Kate Barker recognised that there had been an under-supply of new housing for many years, and called for a step change to address that. The Government’s response in 2005 set out an ambition to increase the rate of new housing supply in England to 200,000 a year over the next decade, alongside a package of measures to reform the planning system, provide more social housing and protect the environment.

I return to what I would like to see in housing, which is the biggest domestic issue facing this country, and facing aspiration and our ability to fulfil our potential as a country. There seems to be an issue, because Conservative Members say that they fully understand the need for housing and agree full scale that there is a need for extra housing, but not in their communities. That is reminiscent of the phrase,

“Lord, make me pure, but not yet.”

As my right hon. Friend the Member for Oxford, East (Mr. Smith) said, we need a grown-up discussion about how local authorities can engage properly in a regional and local debate about the availability of affordable and social housing in all our communities. The suggestion of putting up signs saying, “This community is full up”—that is what the hon. Member for Shipley seemed to allude to—is unsustainable. Conservative Members must ensure that we have that grown-up debate, and facilitate and lead it in their communities. Tory MPs sign early-day motions saying that we cannot have more housing in their areas, such as Cambridgeshire and East Sussex, but that is simply wrong and does not help to fulfil the potential of those areas .

It is hardly appropriate for me to talk about East Sussex, but it has agreed to an increase in housing. It might not be what the Government want, but it is increasing housing there.

That is the fundamental point. Targets have been set so low, and 30 additional houses in a county is unacceptable, given the level of economic potential and development that could be there.

In conclusion—I realise that I am out of time, Mr. Cummings—I pledge to write to every hon. Member here.

First Solution Money Transfer Ltd

The collapse of First Solution Money Transfer Ltd hit the community of the east end of London and elsewhere with all the force of a flood. It has devastated some of the poorest people in England: some of the lowest paid and some of the poorest housed, who live in the chilly shade of the hedge fund operators in the richest square mile on earth in the City of London and the gleaming spires of capitalism at Canary Wharf. Those people sweated from their brow to save what often may be small amounts to you and me, Mr. Cummings, but large amounts to them, and bigger amounts to those in Bangladesh, the poorest country in the world, to whom the money was destined to be sent.

No one will know the full scale of the losses until the Insolvency Service has concluded its forensic examination of the accounts, but at the moment the directors are claiming that £1.7 million is owed to 2,000 creditors. Those figures do not begin to paint the human picture of the suffering. One man from Manchester has lost £70,000, his life savings, which has brought him to the edge of despair. Another has lost the money that he had saved for retirement back in Bangladesh. In yet another case, money saved by a man for a whole year to buy essential medical treatment for his brother has gone missing. The tale of misery is represented among the strangers here, who are some of the poorest and some of the oldest victims of this collapse.

I was first alerted to the problems in the company almost four weeks ago. Agents working for First Solution in the Home Counties contacted me and said that money that they had taken in over the previous two months for transfer to Bangladesh—some £150,000—had for the most part failed to get there. They said that a meeting had been held between more than 40 agents and the directors of First Solution in the middle of May after money had stopped getting to Bangladesh. They had been told by the directors that there were problems, but that they would soon be put right. More than one month later, the situation had merely got worse as the amount of money owed to clients had grown.

As the evidence mounted that there were problems in the company, and that good money was being paid in after bad in large quantities daily, my response was to seek the authorities’ assistance to find out what had gone wrong. I contacted the Financial Services Authority, but to my amazement was told that this financial service fell outside its remit, and that I would have to approach trading standards officers.

My office contacted trading standards officers at Tower Hamlets council with the evidence that had been presented to me, but they said that the matter was too big for them and that the police should be contacted. I sent a personal letter straight away to the borough commander in Tower Hamlets, again outlining the evidence of the very serious problems in the company, and of the suspicions, now widespread, of wrongdoing, and asked him to engage whatever agencies in the police were responsible for investigating the company. Commander Savill referred the matter to the local fraud office and an officer then contacted my office to say that he was preparing a report to send to Her Majesty's Revenue and Customs, as it was in fact the regulating body and should carry out any investigation. This was some three days before the company finally ceased trading.

Under mounting media pressure—I commend the excellent investigative reporting of Ted Jeory of the East London Advertiser—the company seems to have engaged with its accountants and lawyers, and I believe the directors were advised that they were almost certainly trading as an insolvent company, which is a criminal offence. They were advised by their lawyer to instruct their agents to stop taking business, but to this day, many agents claim that they never received any such instruction. Early in the morning on 21 June, the directors posted a notice on their office in the London Muslim centre, saying that their office was closed until further notice.

That was no tin-pot business. It had grown from a £4 million turnover in its first year of operation, 2004, to an estimated £87 million turnover in 2006-07. That growth was achieved in several ways. First, the business offered higher exchange rates for lower fees and a quicker service to more outlying areas of Bangladesh than its rivals, in particular the banks, which are subject to financial security regulation. Secondly, with its headquarters located in the London Muslim centre next to the East London mosque, it was assiduously and ruthlessly promoted as a community service on the Bangladeshi TV station Channel S. Not coincidentally, Dr. Fazal Mahmood, the driving force behind First Solution, which also includes real estate, investment, travel and other services, was also the managing director of Channel S until the day before First Solution collapsed.

I have asked Ofcom, and I demand it again today through you, Mr. Cummings, to investigate whether there was a breach of the broadcasting code as a result of that close relationship and the apparent conflicts of interest, but so far Ofcom has not agreed to an inquiry. I want to know whether the adverts that ran interminably on Channel S for First Solution, even though the two companies shared Dr. Fazal Mahmood’s services, were properly billed and paid for, and whether it was really commercial advertising or a relentless drive to get the TV station’s audience to do their business with First Solution. Ofcom has a duty to the population of east London in that regard.

Mr. Cummings, you may be surprised to know—I was—that Dr. Fazal Mahmood was convicted in 2004 on two counts of the criminal offence of breaching section 84 of the Immigration and Asylum Act 1999. A convicted criminal in 2004 was allowed to build up an £87 million business within three years because of the failure to put a fit and proper person regulation in place for people operating money transfer businesses.

The next point is even more interesting. Upon the collapse of the company, the directors appointed an insolvency firm, Panos Eliades, Franklin and Co., to register creditors, set up a creditors’ meeting and advise on liquidation. Panos Eliades himself fronted and continues to front that operation. Mr. Eliades, however, was excluded from membership of the Institute of Chartered Accountants in 2000, and, in a legal dispute over debts with the boxer Lennox Lewis, a New York court and the High Court in London ruled that Mr. Eliades had comprehensively lied in order to avoid paying the debts that he was alleged to owe. His partner, Mr. Franklin, is qualified as an insolvency practitioner, although he is subject to restriction and monitoring by the Insolvency Practitioners Association. In a word, he is in “special measures”.

One cannot help wondering why among all the insolvency firms operating in London, many of which have bombarded me with offers of help, the directors of First Solution managed to choose that one. There is a very important point to make. There is a great deal of anger in the British Bangladeshi community in the east end, and in Bangladesh itself about what has happened. There is a feeling, which I share, that it should be impossible for a money transfer company to lose money. After all, it merely takes money from Peter and promises to transfer it to Paul. In the east end, there has been much rumour and speculation that something criminal must have happened to that money.

The hon. Gentleman has rightly identified some of the gaps in the regulatory framework. A constituent of mine in Newcastle-under-Lyme in Staffordshire has also lost £70,000, and that was in late June. He tells me that he spoke to one of the directors, Shah Mohammad Abdul Hadi, before emitting the money, and he was assured that everything was fine. If it looks like a fraud, sounds like a fraud and quacks like a fraud, it is a fraud; and that is a matter for the police.

Quite so. I shall come to precisely those points in a minute.

The investigation will continue, but any investigation must carry credibility with the community who have lost their money. Normally with the collapse of a company, the investigation would be undertaken in the first place by the insolvency practitioners who were engaged by the directors and confirmed by a creditors’ meeting. There is no way that Panos Eliades, Franklin and Co., with its colourful history, possibly has the credibility to conduct such an investigation.

I am very pleased that as a result of the huge political pressure that has been brought to bear in this case, members of the Limehouse financial investigation team of the Metropolitan police executed search warrants on the headquarters of First Solution one week after the collapse. I would have much preferred the action to have been taken earlier, and I should remind the Minister that I alerted the police to the possibility of fraud three days before the company collapsed. However, I have been assured by the police that they believe that they have secured all the electronic records they need to conduct a proper investigation, and I hope that that is the case.

The company’s four directors, or perhaps it is three as one seems to have resigned, have been putting out a robust defence of their honesty. I am no expert on the international financial markets, but there is a problem with their explanation. The delays that they hold responsible for the difficulties that the business faced would in fact have benefited the company, because the long-term exchange rate trend was for the Bangladeshi currency to fall against the pound. They have claimed that people were not transferring the money from the agent to them quickly enough, and that in the delay, there had been a loss on the currency market. However, the taka has been falling like a stone compared with the pound. In just three years its value has fallen by a half, so any delays would have benefited, not suppressed the company’s profitability.

The directors’ account of events does not have any credibility at the moment. Moreover, an increasing number of people are coming to me with concerns that their investments in property in Bangladesh through First Solution have again not reached the other end. That situation includes Britannia Property Services Ltd, trading as Britannia Samana, which has among its directors both the chair of Channel S, the man now known—he changed his name—as Mohammed Mahee Ferdaush, and Dr. Fazal Mahmood.

There are some questions that must be answered. When were the losses that brought the company down first incurred? When was the informal overdraft facility with Southeast bank arranged, and how much was it for? What role did the informal overdraft facility from Southeast bank play in covering up the losses? Why was the overdraft facility withdrawn? When would a reasonable person conclude that the company had become insolvent? Is there any evidence of money paid in for transfer being diverted to other uses, including speculation? Did Mohammed Mosaddek Ali Falu, previously a Member of the Bangladeshi Parliament, now in jail in Bangladesh on money laundering charges, use First Solution to launder money from Bangladesh to the UK, and pay higher than official rates in taka? Was First Solution depositing UK sterling into Falu-nominated UK accounts, and was Falu supplying takas in Bangladesh?

Was the drying-up of money-laundered taka, as a result of the anti-corruption drive by the caretaker Government in Bangladesh, the reason why First Solution made losses? Were any significant payments made from First Solution Money Transfer Ltd client accounts to unsecured creditors—including to any directors of First Solution or other companies of which they are directors—at any time in the past three months, before the company stopped trading and after the withdrawal of the informal overdraft facility?

In that comprehensive investigation and exposé, for the many millions of members of the Bangladeshi community in the hon. Gentleman’s constituency and mine, and indeed throughout the UK, one of the questions must be—although we must ask what can be done to prevent it from happening again—what immediate relief can be offered. I am sure that the hon. Gentleman will join me in thanking Baroness Pola Uddin and the Sir William Beveridge Foundation. They are doing their utmost to help some of the crisis cases. Many in the audience here and downstairs, as well as in the community, have seen their hard-won life savings vanish in an instant. We have a collective duty to help and support them.

Quite so. In fact, we are not only demanding help for crisis cases. As I will mention in a minute, we are demanding that everyone who has lost money gets it back.

Whatever the outcome of the investigation, the burgeoning area of financial services needs more regulation. Money transfer companies receive a licence from Her Majesty’s Revenue and Customs, which is charged with monitoring money laundering, but they are not monitored for financial security. It is a big hole in the regulatory regime.

The Department for International Development was among the agencies after 9/11 that pushed out of the picture the informal networks previously used to transfer money to countries such as Bangladesh and insisted on the move to a more formal network. Some £7.5 million was paid to Bangladesh’s state bank to encourage Bangladeshi authorities to go down that road. That is the context for the emergence and extremely rapid growth of First Solution, but without proper regulation, the danger of a collapse was ever-present. Having pushed people into the sector while knowing that it was not regulated—having encouraged the process of money transfer—the Government have an obligation to help the people who have lost money in the collapse.

No, if the hon. Lady will forgive me. I am running out of time, and I want the Minister to have time to reply.

I met the Minister, who was most gracious, and she rejected direct help on the grounds that it would encourage moral hazard. But if the Government encouraged the system that failed to protect the customer, the Government have the moral obligation to help. As for regulation, it needs to be considered as a matter of urgency and proposals must be introduced. I am glad that she said that that will be done, but I stress that the regulation must include a “fit and proper” test for directors.

The Minister has agreed Government assistance in establishing a fund to raise money to pay back the many poor people who have lost money. It is early days, and I understand that the agents who have lost so much business and standing in the community are themselves trying to organise a rescue package. I have begun writing to the heads of major City institutions to ask them to contribute to the relief fund that the Minister and I discussed. If Ministers, led by the Prime Minister, added their voices to the call and led the House by example, we could raise the necessary funds swiftly to pay everybody back.

I described where most of the victims live. They live in the cold shadow of some of the richest companies, banks and finance houses in the world. If the Government put their back into it and tug at the consciences of the hedge fund managers, private equity speculators and city slickers who got £8.8 billion in Christmas bonuses six months ago—if the Government put the arm on some of the richest people in England to help some of the poorest, who are the victims of the crash—something can be rescued from the ashes. I look forward to hearing what the Minister has in mind.

I am grateful for your chairmanship, Mr. Cummings. I congratulate the hon. Member for Bethnal Green and Bow (Mr. Galloway) on securing this debate—it would be unladylike for me to add “while he is still able”, but it is nice to see him in the House today. I thank him and all hon. Members who have spoken for their contributions.

I start by expressing my sympathy for those affected by the closure of First Solution Money Transfer Ltd, including many of my own constituents as well as those of the hon. Gentleman and other hon. Members here today. Before I mention local leaders in the hon. Gentleman’s constituency, I pay tribute on a personal note to Councillor Shah Hussain in mine, who has done excellent work in representing the Bangladeshi community’s views. I realise that many of those affected worked hard to earn the money that they sent through the company, and that many in Bangladesh who did not receive money were badly in need of it. I welcome the efforts of all those who have taken the trouble to support people who have suffered as a result of the company’s closure.

Sitting suspended for a Division in the House.

On resuming—

The Government’s first step was to attempt to understand the situation and the concerns of those affected. My right hon. Friend the Minister for Competitiveness and I have met a number of representatives of the local community. In addition to the hon. Member for Bethnal Green and Bow, I want to mention in particular the grass-roots work of Councillor Denise Jones, who is leader of the council, and of Rushanara Ali and Ayub Ali, who have worked hard to raise the profile of the issue and to make representations to Government. As well as thanking the Minister for Competitiveness, I want to extend my particular thanks to the Under-Secretary of State for Transport, my hon. Friend for Poplar and Canning Town (Jim Fitzpatrick), who was here for the earlier part of the debate, and, as has been mentioned by my hon. Friend the Member for Luton, South (Margaret Moran), Baroness Uddin of Bethnal Green, of whom more later.

Of course, I am grateful to the hon. Member for Bethnal Green and Bow for the trouble that he took, as he mentioned in his opening remarks, to bring community representatives to meet me last week to express their concerns and aid my personal understanding of the issues. I want to draw the attention of the entire community to the written ministerial statement that I laid before the House last week, which set out our initial response.

In response to complaints about the circumstances of First Solution’s closure, the companies investigation branch of the Insolvency Service is also examining the facts of the case, and has been in liaison with the local police as well as keeping trading standards officers and other regulators informed of its investigation.

Although I was interested to hear the points about criminality and suggestions of the fit-and-proper-person nature—or otherwise—of various directors who were involved, as well as the suggestions made by my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) about fraud, and the points about money laundering, they are best dealt with by the investigation that is being undertaken. It is standard practice that if the CIB finds any allegations that the law has been broken in any of those regards, it will pass them on to the police, with whom it is already in contact. Time will tell in answer to those points.

The CIB recognises the uncertainty felt by those affected by the closure of First Solution, and it is working as quickly as possible to reach conclusions and making steady progress. Obviously, it needs to be thorough, so it is unable to give a precise time for the completion of its investigations, but it is fully aware of the need to progress as swiftly and thoroughly as possible.

I also realise that the uncertainty must be difficult for those who have been affected by the case, and that they will understandably be frustrated that First Solution’s voluntary liquidation means that there is no firm time frame in which they might find out when, or if, money can be reclaimed from the company’s remaining assets, which is, of course, theoretically possible.

Many of us have constituents who are affected by this, and they need to know what to do next. I should be grateful if the Minister would outline the importance of registering their loss with the liquidator, so that they do not merely attend meetings where everyone tells them what a dreadful thing this is, but not where to go next. I know that Members in the Chamber today have met representatives from those groups who keep going to meetings but are uncertain what to do next.

I am grateful to the hon. Lady for mentioning that point. I was just coming to the two things that the people who are affected should do. First, as I laid out in last week’s written ministerial statement, they should register their interests with the insolvency practitioners who are the liquidators. The most recent information is that a liquidator has not yet been formally appointed, although that may have changed recently, but the company has told us that it intends to appoint as liquidator Panos Eliades, Franklin and Co., and the telephone number 020 8815 4000 was given in my ministerial statement. As a first step, potentially affected people should register their interest there. If assets can be returned to them, the liquidators will ensure that they are in the right place in the queue for that.

The second matter is the charitable response. With my whole heart, I want to say how delighted I am that the Sir William Beveridge Foundation has independently agreed to provide a charitable response. A helpline is in the process of being established—I understand that the number has been agreed, but that BT has not formally connected it. We will make that public next week, and everyone, all over the country, who feels that they should be eligible for a charitable response, should contact that charity, which has its own processes for checking who is eligible and who is not. It is an established organisation and I am delighted that it has come forward in these sad circumstances. The foundation will be seeking corporate and individual donations. I do not know who it is contacting, but the hon. Gentleman had some sensible suggestions. I shall certainly encourage the foundation to seek the widest possible donations to provide a substantial fund.

I am sure that we will all want to thank Baroness Uddin for her role in setting up the support fund, as well as the many others who have been involved—I know that an ad hoc advisory group set itself up—

As a member of the ad hoc advisory group, I stress that the criteria that will be used to determine eligibility will be determined by the charitable trust, not by politicians or others. Will the Minister acknowledge that although this tragedy affects the Bangladeshi community because of this company, it is important that we explain to others from other communities who use money transfer agencies—there are many others, including in my constituency—that they need to be sure about the terms on which they are using the agencies?

Those are extremely important points. The independence of the charity is crucial and it is important to point out to individual constituents the need to be vigilant and to check the status of the companies with which they transact, although I understand that it is difficult to do so. I am about to move on to the issue of regulation, but I have one final word on the charitable response. It is clear in my mind—I have said this privately to the hon. Gentleman—that as a Government, our response to this tragic situation should be the same as our response to Farepak. In that case, we were delighted to say that the Family Fund set up a charitable response, and in this case we are delighted to see that the Sir William Beveridge Foundation has taken up the mantle. I shall encourage my constituents to get in touch, and I hope that all hon. Members will do the same. It might be a couple of days before we have the final details in place, although I stand to be corrected by members of the ad hoc advisory group.

The fund will provide immediate support, I hope, to those who have been affected in this incident, but I know that we are all concerned about ways of preventing closures like this in the future. Even before the situation was known, the Government had committed to regulate money transfer companies under the payment services directive, which we agreed the terms of and negotiated on behalf of the UK at a European level earlier this year.

The directive will require money transfer operators to be subject to financial regulation. It will introduce a prudential authorisation regime for these companies, which will be tiered according to the size of the operators. It will also provide, where appropriate, for customers’ funds to be ring-fenced from other creditors’ in the event of insolvency. Furthermore, all operators must abide by new conduct-of-business rules, which concern the provision of adequate information to customers to ensure that there is transparency about the services that customers receive. There are also liability requirements, to provide greater legal certainty for customers in the event, for example, that a payment transaction goes wrong.

We will be publishing a consultation document on the implementation of the directive later this year. I encourage all those who have been involved with the First Solution experience to respond to that, and we will be seeking views from all interested stakeholders on how we can implement it most effectively, taking into account the Government’s better regulation agenda. We will also take into account lessons learned from First Solution.

Regulation is not fail-safe. It cannot guarantee that firms will not become insolvent or misbehave, and it will always need to be complemented by customer vigilance, good corporate practice and genuine competition in the marketplace. We believe that if it had been in place, that would have been a better framework than the one that we have.

I want to mention the role of the Department for International Development in supporting from the other side the role of money transfer companies. We have set up a remittances and payments partnership project with the central bank of Bangladesh to improve the speed and security with which migrants are able to remit funds home. We also fund the UK remittances taskforce to promote greater transparency and competition, and better information in the UK remittances market.

The hon. Gentleman mentioned a couple of other points. I heard what he said about Ofcom, which is an independent body and so it is up to it to decide what to do. I am sure that it is aware and is investigating the representations that have been made. In the last few seconds—

Manorlands Hospice (Oxenhope)

I should like to talk about the funding of the Sue Ryder Care hospice in Oxenhope. I was first going to congratulate my hon. Friend the Minister, but she is not here yet. I am afraid that there has been some confusion. Anyhow, I congratulate her on her recent appointment as a Minister in the Department of Health. No other person would have been as appropriate to do the job.

I am sure that every Member of the House has a particular charitable body or organisation in their constituency that attracts a special fondness. In Keighley, the Sue Ryder Care Manorlands hospice in Oxenhope has a special place in the hearts of my constituents. Perhaps that is due to the hospice’s incredible work. Manorlands has a 16-bed, specialist palliative care unit, providing consultant-led, specialist nursing and care services; a palliative care community team that transfers the hospice’s expertise into the community, including at a palliative care drop-in centre in Keighley; a day therapy unit enabling people living with a terminal illness to access expertise and services from the comfort of their own homes; and a bereavement and counselling service providing care and support to families and carers before and after someone dies.

On a point of order, Mr. Cummings. I am sorry, but we do not have a Minister here. The whole point of an Adjournment debate is that a Minister can reply.

I understand that the Minister is on her way and that it is in order for the debate to continue without her.

Perhaps the fondness for Manorlands is due to the professionalism and care of the staff who work there. Anyone who has any contact with Manorlands, as a patient or carer, is deeply impressed by the level of care, with dignity, that is provided. Perhaps it is also because of the stunningly beautiful surroundings in Oxenhope, a place that brings a tranquillity, comfort and dignity that every one of us deserves in our final weeks of life.

Perhaps it could be because of the holistic approach, which is the ethos of Manorlands and of all Sue Ryder Care’s hospices. Manorlands’ vision of “care that liberates life” means that it cares for a person’s physical, emotional, psychological and spiritual needs, and is dedicated to ensuring that people get the best from their lives while living with chronic and terminal conditions and illnesses.

I believe that the fondness is due to the extent of the expertise offered at Manorlands through its consultant-led palliative care team, which incorporates specialist nurses who care for people not just in the hospice but in the community. Also, the hospital does not just care for people with cancer but is part of a charity that specialises in providing neurological care and support for people living with conditions such as multiple sclerosis, stroke, Parkinson’s disease, motor neurone disease, Huntingdon’s disease, brain injury and dementia.

Whatever the reason for the fondness, there can be no doubt that Sue Ryder Care’s Manorlands is vital to the people of Keighley and the surrounding areas. However, as is always the case, there is a price to pay. Along with the hospice and the voluntary sector in general, I realise that funds are not infinite. There is not a bottomless pit, and a simple wish list of demands is not realistic. In this case, Manorlands is not campaigning for something that is unrealistic or exaggerated; it is simply asking for what is proportionate and should be due. The statutory commissioners should pay the true cost of the services that they purchase.

I congratulate the hon. Lady on securing the debate and on all the work that she does in supporting Manorlands, which, as she well knows, is close to the hearts of my constituents. I know that a lot of her constituents, like a lot of mine, raise considerable funds for Manorlands and put an awful lot of effort into doing so. Does she agree that it is only fitting, given their efforts, for primary care trusts not just in our area but in North Yorkshire to pay their fair share to enable Manorlands to continue to give the high-quality service that she mentioned?

That is the very point that made me decide to seek the debate, and I shall come to it.

The basic principle is vital. Sue Ryder Care, as highlighted in its “We Care: Who Pays?” campaign, is paying £7 million a year to cover statutory shortfalls in funding. Six million pounds of that is for palliative care, which means that voluntary donations, instead of being used to develop much-needed new and innovative services, are plugging the gap between what the PCTs and social services pay and the real cost of providing care.

I welcome the Government’s support for the hospice movement and palliative care in general. The additional £50 million made available for specialist palliative care for adults has made a real difference, and the announcement in April that a further £40 million was to be allocated as capital funding for the refurbishment of adult hospices, which has assisted 146 hospices, was particularly welcome. I also appreciate the position of the Under-Secretary of State for Health, my hon. Friend the Member for Bury, South (Mr. Lewis). He stated in a written answer on 8 May:

“The level of public funding a hospice receives is a matter for local negotiation between the local primary care trust (PCT), who are responsible for commissioning and funding palliative care services locally, and the hospice. We are currently developing an adult End of Life Care Strategy, which will consider funding for adult hospices and other adult end of life care services.”—[Official Report, 8 May 2007; Vol. 460, c. 149W.]

The difficulty, however, for Manorlands and other hospices is what appears to be a lack of transparency in how different PCTs fund the care.

I appreciate the fact that, as part of the end-of-life care strategy, PCTs have been asked to undertake a baseline review of their end-of-life care services, and should therefore determine the true cost of providing end-of-life care, but organisations such as Manorlands face uncertainty about funding. In negotiations at the local level with PCTs, Manorlands must operate within the parameters given. Indeed, in “Improving financial relationships with the third sector: Guidance to funders and purchasers”, produced by the Treasury in 2006, it was suggested:

“There is no reason why service procurers should disallow the inclusion of relevant overhead costs in bids. Furthermore, funders or purchasers should not flatly reject or refuse to fund fully costed bids. Funding bodies must recognise that it is legitimate for third sector organisations to recover the appropriate level of overhead costs associated with the provision of a particular service.”

The Charity Commission, in its report of 2005, “Policy Statement on Charities and Public Service Delivery”, argued:

“Trustees have a duty to use charity assets as effectively as possible. Charities should always aim to recover the full cost of delivering services for public authorities, including administrative and overhead or ‘core’ costs. It is reasonable for a charity to expect an authority to fund its full costs. Full cost recovery is supported by government policy, as set out in the Compact and its good practice code on funding and procurement.

We recognise that, in practice, many charities struggle to obtain full cost recovery. This is a matter of concern for both the sector and the Commission.”

However, Manorlands is not seeking full recovery. The cost in 2006 to Manorlands of providing service to 640 patients and their families was a little short of £2 million. Seventy-six per cent. of the patients were referred to Manorlands from within the boundaries of the Bradford and Airedale PCT. For that service, the PCT paid Manorlands £640,000. Twenty-four per cent. of the patients lived within the boundaries of the North Yorkshire and York PCT. No agreement has yet been concluded on payment by the PCT, but it appears that something in the order of £140,000 may be forthcoming.

Manorlands is not seeking 100 per cent. recovery, as it realises that commissioners are not able or willing to purchase all of its services. That is why Sue Ryder Care is a charity and so can use vital voluntary funds to pay for valuable additional services such as bereavement care, which makes a real difference to families and bereaved carers. In the interim, it is requesting 50 per cent. recovery from two PCTs that commission its specialist service. However, the Bradford and Airedale PCT falls short of the 50 per cent. threshold by £120,000, achieving just 87 per cent. of the target, while the North Yorkshire and York PCT falls short by £110,000, at just 54 per cent. of its target of 50 per cent. total recovery.

When Manorlands first raised the issue with me, I was told of the reluctance of the North Yorkshire and York PCT to discuss the matter. Appreciating the demands on PCTs, I was sure that there was a perceived, not a definite, reluctance. However, although I have finally managed to organise a date to meet the chief executive, I, too, have experienced such reluctance. I very much hope, however, that when I do meet the chief executive early next month, the discussion will prove to be more constructive.

I am sure that Members of the House will appreciate my personal and particular interest in matters associated with palliative care. Anyone who has experienced the ravages of a terminal or chronic illness, either as a patient or as a carer, will appreciate the value of specialist, holistic care and support. From a purely financial point of view, the last chapter in someone’s life can be the most expensive to the various agencies involved. A coherent and well-funded palliative care strategy is vital for any PCT if it is to avoid expensive increases in unscheduled admissions to hospital, longer lengths of hospital stay and discomfort to patients. Failure to ensure that Manorlands can effectively provide the service that it specialises in would be a false economy.

More important than the financial argument, perhaps, is the question of emotional well-being and dignity. My second late husband, John, chose in his last few weeks to be at home. Palliative care was provided through the Bradford Hospice at Home team, which included excellent input from Macmillan nurses. We were also given night-time care, which helped enormously. Towards the end, it was John’s decision to be moved to the hospice nearest to our home, the wonderful Marie Curie hospice in Bradford. It is that experience that allows me to understand and appreciate what Manorlands specialises in and must be allowed to continue doing.

Neither I nor Manorlands is making wild demands for funding from a limited and stretched pot. We recognise the Government’s commitment to palliative care and to the voluntary sector, but the lack of clarity regarding the funding arrangements of PCTs needs to be addressed and resolved. Manorlands delivers its services free. Whatever the PCTs commission but fail to pay for has to be met through donations and the excellent fund-raising events organised by the dedicated staff at Manorlands and the volunteers in the two other constituencies concerned. Surely it is only proportionate and fair that PCTs should budget for at least 50 per cent. of the services that have been provided.

I appreciate the Government’s stance that such matters be negotiated locally, but I hope that my hon. Friend the Minister will agree that direction needs to be given to ensure that PCTs do, indeed, act fairly, and thus that Sue Ryder Care Manorlands hospice will, as I hope, be able to continue to provide exemplary service for so many people.

I thank you, Mr. Cummings, and my hon. Friend the Member for Keighley (Mrs. Cryer). I apologise for my late arrival. A large number of people were leaving the Chamber, and it proved impossible to get through the crowd in time. I hope that hon. Members will accept that apology. I congratulate my dear hon. Friend on presenting her case with her usual courage and dignity. I am sure that all Members felt for her as she expressed herself as she did. I would like to pay tribute to the 1.3 million staff who work for the national health service, in particular the staff in the Bradford and Airedale area who have made an enormous contribution to improving the local NHS.

The hospice movement is close to me, too. As a former nurse, I have spent some time working in hospices and received some excellent training there. Cicely Saunders, the founder of the hospice movement and of the first hospice, St. Christopher’s, said that society should be judged by how it treats its very young, its very old, its sick, its poor and its dying. She said:

“A society which shuns the dying must have an incomplete philosophy.”

I am sure that all hon. Members would agree with that.

We greatly appreciate the work done by the voluntary sector, which provides some three quarters of the available specialist palliative care services. We are indebted to all hospices and charities for the work that they do in supporting not only people with life-threatening illnesses but their families, carers and friends. As centres of excellence, hospices have for several decades shared their knowledge and expertise with local NHS staff. For example, during the £6 million programme to improve the training of district nurses in the principles and practice of palliative care, many of the participants received their training through programmes run by local hospices, and clinical placements based in them.

The Bradford and Airedale palliative care co-ordination service is a good local example of the partnership between hospices and the NHS. The service takes the lead in planning and developing integrated palliative care services, which include continuing education for health and social care professionals in the important area of end-of-life care. Manorlands hospice is one of several local providers that deliver continuing education. As part of a local network of educators, it shares its expertise with other professionals, formally and very often informally. That important work is not often discussed, so it is important that I should mention it today.

My hon. Friend spoke of high-quality care at the Marie Curie hospice in Bradford and at Manorlands. Sadly, she had personal experience of receiving that care. Some patients receive excellent care at the end of life, but, unfortunately, many do not. In a recent Healthcare Commission report on complaints about the NHS, 54 per cent. of hospital complaints were about care surrounding death.

Health and social care professionals often do not discuss death and dying with patients. I am pleased to have responsibility for maternity services in my new role. The first few minutes of life are very important, but I would say that the last few minutes are equally important. If the last part of life is planned for with properly trained staff and professionals and the wider community, it can often become a different experience.

Patient preferences for care are often not elicited. Their care needs are not always adequately assessed and care is not always planned or reviewed. Recent surveys of the general public have shown that most people’s first preference is to die at home. Patients need to be offered that choice. My colleague the Under-Secretary of State for Health, Professor Ari Darzi, is reviewing the pathways right the way through from birth to end of life. The end-of-life strategy aims to offer patients a choice. It will deliver increased choice to all adult patients, regardless of their condition, about where they live and die, and provide them with support to make their choice possible. For the first time, a strategy for end-of-life care services has been developed. It will be key to helping commissioners and providers bring about improvements in end-of-life care services at a local level.

I am so pleased to learn that Sue Ryder Care at Manorlands is represented on the working group that is currently developing a strategy. It is anticipated that the advisory board and working groups will report to Ministers with their recommendations by the end of 2007. I welcome my hon. Friend’s contribution to that strategy, and she must feel that it is open for her to do so.

To support the implementation of the strategy, an operating framework highlights the importance of PCTs undertaking baseline reviews of their end-of-life care service. Guidance to PCTs on the reviews highlights the importance of engaging with all stakeholders, including local service providers, patients and carers. Leadership is absolutely essential from the people who know best—from the hospice movement and those involved in the wider social package. They must encourage PCTs and chief executives fully to engage their community and to consult on this vital issue. I am sure that Members of Parliament can also play an important role.

On the NHS cancer plan that my hon. Friend mentioned, £50 million per annum for specialist palliative care for adults, including hospices, has been delivered. More than half the new money went to the voluntary sector, mostly to hospices. That has funded 44 new palliative medicine consultants, 172 new clinical nurse specialists, and 46 new specialist palliative care beds. The plan has increased NHS funding for specialist palliative care by about 40 per cent. In 2004, funding for adult hospices averaged 38 per cent., which means that expenditure was up from 28 per cent. in 2000. Progress has been made, but there is much more to do. The NHS cancer plan has contributed to a 15 per cent. increase in all funding for specialist palliative care compared with 2000 levels.

Manorlands has provided high-quality specialist palliative care to people in Airedale, Bradford and Craven for more than 30 years, and it now cares for more than 600 people a year. My hon. Friend raised the issue of funding and I understand that funding for hospices is a major concern for voluntary organisations. The average funding figure for adult hospices is 38 per cent., and I am pleased to say that the figure for Manorlands is 41 per cent., which is of course above the average. It is essential that the primary care trust works with the hospice to negotiate the funding, and I would be very pleased to give any assistance that I can to my hon. Friend in achieving that.

Good commissioning must acknowledge what the voluntary sector has to offer. Likewise, the voluntary sector must engage with commissioners to make them aware of what they have to offer. As I mentioned at the start of my contribution, the educational role that they play could be put much more into the forefront of their minds. The emphasis should therefore be on effective negotiation between contracting partners when contracts and service-level agreements come up for renewal.

How do we put a cost on end-of-life care? The end-of-life care strategy is examining the true cost of providing end-of-life care. That figure will estimate the cost of the services provided across the board by both the NHS and the voluntary sector in the last three to six months of a patient’s life. As I am sure hon. Members realise, that is not easy to do, but, with proper negotiation on an end-of-life strategy that looks at the last three to six months, I believe that it is possible. That figure will provide a base from which to consider future funding needs for end-of-life care services in the NHS and in the voluntary sector.

The local primary care trusts fully acknowledge and recognise the vital contributions made by hospices. Bradford and Airedale’s funding for this year has not been finalised, but I am assured that it will be consistent with last year, plus an inflation uplift. North Yorkshire and York primary care trust is reviewing the way in which it allocates funding.

When we consider the issue of hospice care we must look at the whole multidisciplinary team. My hon. Friend stated that she used almost a hospice at home for John. The multidisciplinary team offers a range of services. Some patients are able to go home for weekends; others stay for one or two weeks to enable their families to have a rest or a holiday. Convalescence is offered to people who have undergone radiotherapy and chemotherapy treatment. The community team takes its specialist palliative skills to patients at home, provides support to carers, and enables the patient to live as full and active a life as possible. When I last practised in the late 1980s and early 1990s, my experience as a community nurse showed that changes in technology allow pain control to be managed at home, and that that makes a huge difference to quality of life. Effective and good pain management enables someone at the end of life to communicate with their family, and to continue to work, in many cases, almost up to the end. The skilled multidisciplinary team is fully aware of how to carry out very specialised pain management.

A local GP from my hon. Friend’s area has said:

“Local GPs in Airedale value the support given to our patients by Manorlands. Their staff are fully integrated into primary health care teams' working and together they enable us to offer a high standard of care to patients”.

GP services are vital if a patient is to have the right to come home. Many patients do not have that right because GP services in their local area do not meet the demands that that would create. Caring for someone dying at home is highly demanding work. Again, I pay tribute to the absolute professionalism of staff—from the voluntary sector through to the highest consultant —some of whom also feel that palliative care should be delivered at home and are willing to go to patients’ houses.

We are conducting a consultation to establish the future needs of the local community. I am aware that the hospice is currently conducting that consultation and is considering what services and facilities will best meet those needs. It is commendable that the community will have an opportunity to have a say in how the service can change and meet future demands. Hearing the views of people, involving partners and focusing on outcomes is essential to our reform agenda. That means good commissioning, and good commissioning must acknowledge what the voluntary sector has to offer. Equally, it is essential that in every community and every part of the country, the voluntary sector engages with commissioners to make them aware of what they have to offer. Yes, devolved decisions to primary care trusts is the way forward, but that does not mean that we cannot have leadership from my Department to encourage PCTs and chief executives to engage in good commissioning.

I shall end my contribution with another reference to Cicely Saunders. She had courage, and her courage was that of the visionary. She saw beyond the limited vista of the medical establishment to pioneer a movement that has revolutionised the way that terminally ill people are cared for. Hospital acute wards are not the place for people to have the last few weeks, days or hours of their life. A proper area where palliative care is delivered with dignity, and with respect not only to the person concerned but the family, is essential for the future. I am encouraged by other hon. Members being here today with my hon. Friend, and I know that we will work together on an end-of-life strategy. I look forward to those discussions with her.

Question put and agreed to.

Adjourned accordingly at twenty-eight minutes past Five o’clock.