Wednesday 12 November 2008
[Mrs. Janet Dean in the Chair]
Motion made, and Question proposed, That the sitting be now adjourned.—[Barbara Keeley.]
Although it is a pleasure to have an Adjournment debate, it is not a pleasure to talk about problems such as those that we are going to talk about this morning. I support the Government’s targets on building 3 million new homes by 2020, but we must try to do something to address the great shortage of houses for social renting, which is all too obvious to any hon. Member who listens, in their surgery, to the tales of woe and despair that are told all too regularly by people desperate for accommodation when there are no houses to rent. Looking at the current situation gives no one any pleasure at all; prices and sales are falling and the number of new homes being built is falling as well.
Because I appreciate that other hon. Members want to speak I shall try to concentrate on three issues: the state of buying and selling in the housing market and what it may be possible to do—if anything—to help that situation; how we can better help people to keep the homes that they have; and what we might be able to do to stimulate the production of more homes for rent.
First, the situation in the housing market is pretty much one of doom and despair. Prices have fallen by 15 per cent. over the past year. Although there are slight variations and different estimates, that is a reasonably accurate average of the various figures produced by different organisations. It is not necessarily enormously bad in terms of the correction in prices over time, although there are some problems for people in negative equity. These things are still limited, but the market is pretty dead. With regard to estate agents, Royal Institution of Chartered Surveyors figures show that there is about one sale per month. The knock-on consequence on the new build industry is clear, and there is talk of perhaps only 100,000 new homes being built next year, which is a long way short of the figure required. The average growth of households is some 240,000 a year, so there is an awful, big gap that will create problems in the longer term. In addition, mortgage funding this year is at about 40 per cent. of what it was last year.
Everyone can see that there is no quick fix to the problems with buying and selling homes. It will, perhaps, be some time before the market stabilises, and until it does, it is likely that buyers will hold on to see whether prices stop falling. Sellers will probably have to be more realistic about the prices that they ask for. There is clearly a problem in respect of mortgages for first-time buyers, which is holding up many buying-and-selling chains, because people are now being asked to find 25 per cent. deposits, rather than 10 per cent. deposits. Until prices have fallen a bit further and lenders can be sure that properties will not get into serious negative equity, we will not see a return to 90 per cent. mortgages at least. People having to find a 10 per cent. deposit is much more realistic. I hope that there will be no return to lending above-value amounts on houses.
There are many initiatives, including the first-time home buyers’ initiative, MyChoiceHomeBuy and HomeBuy Direct, and there is a lot of confusion about precisely what people can access and how. There is an issue about people getting comprehensive advice on the market. Will Ministers look at the shared ownership models that are around and look at how easy, or how difficult, it is for people to access them? Shared ownership is an option for people who cannot get anything more than a 75 per cent. mortgage and who do not have the deposit. There is a lot of evidence that mortgage lenders are not recognising that the Government are effectively underwriting part of the buying process in respect of shared ownership and are still asking for too much money from people trying to go down the shared ownership route.
I have to mention one really bad case, which I have passed to officials in the Department for Communities and Local Government for their consideration, and I hope that Ministers will look at it. One of my constituents, Margaret Wilson, came to me with the story of her daughter, who has been trying since July to go down the shared ownership purchase route. It all started okay; she was told that she was eligible for the scheme, so she found a property and arranged a mortgage, but she was then told that the money had run out at Government level. She started again and found another property and was told a second time that the money had run out. Having complained about the arrangements, she was finally told by officials that a little bit of money was left and that, if she proceeded quickly, perhaps the sale could proceed; however, she was also told that she would have to find a little bit more money from the mortgage company than she had initially thought necessary. So she went back to the mortgage company, which then decided to send the matter to its underwriters, because £4,000 extra was required on the mortgage. The underwriters said, “We’re sorry, but we can’t approve this extra £4,000.” She renegotiated a new price with the sellers of the home, in a falling market, got a reduction and returned to the building society, which said, “We’re very sorry, but that mortgage product is now off the market and no mortgage is available.” She had been trying for four months, having previously been accepted as eligible for a shared ownership purchase, and she is back to square one, with no mortgage and no house to buy. Those sorts of complication need to be addressed if shared ownership is going to be a reality.
The hon. Gentleman is starting to look for solutions, which I welcome. He has brought an important issue to House, and I congratulate him on doing so. However, he will be aware, as all hon. Members are, that some of our constituents who joined schemes that released small amounts of equity—perhaps £30,000 or £40,000—to them 10 years ago are now having to pay back £120,000, £160,000 or £180,000 to major banks; these are not scams. We have to look carefully at the detail of shared ownership and rent-and-buy schemes to ensure that our constituents are protected, so that they are not given massive repayment costs later on and are not exposed to other such scams.
That is a fair point. The regulation needs to be looked at in respect of some of these schemes, particularly equity release schemes. Ministers also need to look at the benefits complications of people in shared ownership: dealing with the rental element and the element of purchase can get complicated when getting into pension credits and housing benefits, for example. That is something else that we need to review to try to ease people down the shared ownership path.
Ministers have taken action in terms of the abolition of stamp duty on less expensive homes. I am sceptical about whether that will really kick-start the market, whether that is a beneficial expenditure of money and even whether the £600 million that has been allocated will be spent. If it is not, will Ministers consider transferring it into something more real, such as building new homes for rent?
Specifically on stamp duty, does the hon. Gentleman agree that the Government’s prevarication over the summer on whether to make any announcement on changes to stamp duty made matters worse and froze up the market even more?
Almost inevitably, people may wait to see what happens when there is any talk about a possible change of policy. That is not particularly a medium or long-term problem. I am just not sure whether the stamp duty holiday has any significant effect, particularly in this depressed market. The money might be better spent on something else.
Although the package of measures to help with building more homes and buying up empty homes was welcome—I will talk about that a bit more in a minute—it came at the expense of taking some money off future budgets for regional development agencies. However, that money will need to be spent helping small businesses in future, so Ministers ought to revise that issue, too.
There is a dilemma. I am not sure whether there is any easy solution to kick-starting the buying and selling of homes. We ought certainly to consider giving people advice about the various alternative home-buying schemes and should try to look at shared ownership. We should also recognise that some people are expressing grave concerns that, when the market bottoms out and starts to recover and demand comes back, after two or three years of low house building, we could see a sharp upward spike in house prices and a return to the old problems that we have had. That is a real issue, and the Government must think about it. They must also think about a problem in two or three years’ time. If the industry will be laying people off and not training them, how can it recover to meet the extra demand that will come at some stage in two or three years?
The hon. Gentleman is talking about homes not being sold. One class of homes that people in my constituency are having difficulty selling is flats where houses have been knocked down and 30 or 40 flats have been built on the site. In some of those blocks, such as those in Long road, Canvey Island, the flats cannot be sold. Does he think the Government should consider how to bring such units into social housing schemes, so that members of the public can buy them? That would help the market and people who need social housing.
Yes, I agree, and I shall come to that when I make my third point. There are no quick fixes for the housing market, but there are some big and different problems in the medium and longer term.
My second point is about keeping people in their homes. The Government propose that, from next April, people who are out of work—unfortunately, there will be many more of them in the next few months—will become eligible to have their mortgage payments included in any income support arrangements after three months instead of nine months of unemployment. That is very welcome, and it should help to deal with the flood of repossessions that might otherwise arise.
Another issue is giving better advice and signalling where people can go for advice when they get into difficulties. Clearly, the message must be that they should talk to their lenders and that lenders should consider every solution short of repossession—for example, extending the mortgage period and interest-only mortgages or percentage-of-interest-only mortgages for a short period—to help people through the crisis. Lots of advice is available, particularly from citizens advice bureaux, and from other organisations and advice centres. Local authorities should co-ordinate that and have an access line that people can ring to ask where to obtain advice in these difficult circumstances. The Government could encourage that.
I hope that the Government will take urgent steps to reverse last week’s court decision that lenders may secure eviction of home owners after two missed payments without going to court. That judgment is worrying. I am sure that many lenders will not take that route and be responsible and try to work with people to keep them in their homes, going to the courts for a possession order only as a last resort. Last week’s decision that people may bypass the courts—there are unscrupulous lenders around who, unfortunately, often lend to the poorest and most vulnerable people—must be reversed to give people greater security. The Government’s scheme for keeping people in their homes allows mortgages to be transferred to shared ownership—people may not welcome that immediately, but it would be better than losing their home—and tries to ensure that such arrangements are simple and easy to understand.
My third point concerns social housing. Clearly, a lot of attention has been given to the fall in house prices and the collapse in mortgage lending and to the reduction in the number of new homes being built for sale, but the real pressure, which existed in my constituency even before the problems in the housing market during the past year, is on people who need to rent a home when there are no homes to rent. I shall repeat the figures that I gave during a debate last week. In my constituency last year, Sheffield Homes, which is the arm’s length management organisation for social rented housing that covers most of my constituency, let only 12 three-bedroomed houses in the whole constituency to people who were not homeless or demolition priority. That is the scale of the crisis. Every month, I see that number of people in desperate housing need, but only 12 homes a year are available. That is the tip of the iceberg of people who come to see me.
The problem already existed, and the Government had a target of building 50,000 new homes in the next spending review period and 45,000 immediately. The reality is that that target will not be delivered in the current circumstances. The package of measures that they introduced a few weeks ago included bringing forward the building of 5,000 new homes and the necessary finance. That is welcome and necessary, but it is totally inadequate in current circumstances. Shelter welcomed that package but said that it did not go far enough. We need a significant injection of funds for housing associations and local authorities to build new homes for rent. That would also boost the economy in these difficult times and kick-start it, as well as helping to maintain jobs in the construction industry and providing badly needed new homes.
Housing associations deliver the vast majority of homes for social renting. The National Housing Federation said that the current housing association model will not work in the current broken market. That is a damning statement, but it is true. More than half of new homes were being built under section 106 agreements, but they are not being built now: builders are not building new homes for sale, so they are not building section 106 houses for rent either.
Some housing associations are involved in development, and because the amount of social housing grant is only 40 to 50 per cent. of the cost of a scheme, they often build homes for sale as part of their package of building to cross-subsidise the homes that they are building for rent. As they cannot obtain the finance to build homes for sale, given that the wholesale market has dried up and people are not lending to them because they are worried about their ability to sell on those homes, they cannot build houses to rent either. Private developers are slowing down the building of section 106 homes, and housing associations are also having to slow down. That is a real problem for the provision of social housing to rent.
At the start of his speech, the hon. Gentleman announced that he supported the Government’s target of 3 million homes by 2020. Does he agree that there is a worry that they may be confusing means with ends and that simply building 3 million homes in the belief that that will solve the problem is the means to the end? Surely, the end is to meet housing need, and in the current climate, it would be better to ensure that the houses that are needed are built, especially if the private sector cannot deliver housing in the present climate.
I agree. The Government’s estimates were widely recognised as being a step forward in thinking. They had analysed the growth in the number of households and matched that with the number of houses that needed to be built. Most people welcomed their commitment of 3 million new homes by 2020, and 50,000 homes a year to rent. One may argue whether that should be higher, but at least we are on the right track. The reality is that the figures have been blown considerably off course by the current problems. Demand for social rented housing is as high as it was, and the 50,000 target, at least, must be reached, but it looks as though we are going backwards because of the problems that I have identified. In addition, many people who would have tried to buy their homes but cannot do so, because of the problems in the mortgage market, are also having to rent, and demand for rented housing is probably higher than expected. There is increased demand for rented housing and the possibility of supply being reduced. That is a challenge for the Government.
I am looking for a step change in thinking. It may not come today, because the Minister may not have his brief to announce it, but I hope that when he considers his package of economic stimuli during the next week he will agree that the house-building industry, and particularly building houses for rent, is an essential element of that package. I want to press for that, and I hope that other hon. Members will do so.
In Cornwall, where I come from, housing supply doubled in 40 years, but housing problems for local people became worse. It is one of the fastest-growing places in the UK. Simply building houses, which is what the Government intend to do with 3 million homes by 2020, may meet a target, but it will not necessarily address the need. Cornwall is a classic example of where an obsession with numbers does not address the issue.
I may have a slight difference of opinion, because I think numbers are important, although I accept—we had this discussion in the Select Committee on Communities and Local Government—that lots of flats are being built in city centres, as in my constituency. I am against that, because we are desperately short of family homes, particularly homes to rent, and that is what we should concentrate on here and now. The Local Government Association says that one in 10 people are on housing waiting lists in some areas. I accept that not everyone on a waiting list is in immediate need of housing, but many are, and we must try to deal with the problem.
The hon. Member for Castle Point (Bob Spink) referred to local authorities and housing associations being able to buy houses, and the Government made finance available in their package in September. That was welcome, but it is probably not sufficient. Schemes in my constituency have come to a standstill, and the next phase is not going ahead. Lots of houses have already been built and are standing empty, and many people who want homes are on a waiting list. With more finance, the Government could put the two together and quickly deal with the urgent housing need.
The Government ought to tell local authorities that they have a responsibility to co-ordinate this action and to look at the building of new homes, that they need to consider purchasing homes that are lying empty in the private market and that they must work with their housing associations and consider, with the advice centres and citizens advice bureaux, what advice should be given to people who are having housing difficulties in relation to paying their mortgage. Local government has a responsibility to pull together packages locally. I hope that the Government will take the initiative and ask local authorities to step up to the mark and introduce plans on how they will address local housing issues in their areas.
Obviously, there will not be a review of the housing revenue accounts system in time for the Chancellor’s announcement of a package of proposals next week. We have been told that the review will take place in the middle of next year. I entirely agree with the hon. Gentleman. The issues that I hope will fundamentally be addressed are how rents are fixed centrally and the inability of organisations—housing associations and particularly ALMOs—to plan ahead because they do not know what the subsidy will be in the next two or three years. The problem of not being able to use capital receipts locally also needs to be dealt with. In relation to social rented housing, there is a real problem with the housing revenue account system, which is like an albatross around the neck of future development. I hope that that issue will be tackled, although I think that the reality is that we will not receive a response from the review until the middle of next year.
Other hon. Members want to contribute, so I will conclude my remarks. I have tried to indicate that there are probably no quick fixes to the current problems with buying and selling homes. One or two things could be done—for example, improving shared ownership. Future problems include a potential spike in house prices and a lack of building that will lead to a lack of training and a shortage of workers. The Government need to think about those matters. Things can be done to keep people in their homes and the Government have acted on some of them, but more can be done—for example, by co-ordinating advice locally. Money should be put into the building of houses for rent in the current market if we are to avoid a decline in those numbers at this time of great pressure.
In some ways, it is opportune that the new Homes and Communities Agency comes into being next month. The agency probably would not have picked this time to come into being, but we should strongly welcome the fact that that is happening now. The agency will be able to co-ordinate local authority action, and I know that Sir Bob Kerslake, the chief executive, believes that tackling this issue is about not central delivery, but delivery through local authorities. I certainly welcome that. I hope that the agency will have an enhanced budget to enable it to work with local authorities and housing associations to build extra homes. At a time when land prices are falling, it might well be that some of that money could initially be put into land purchase. If the public sector were to buy up land for future schemes, that would be welcome and could be done to anticipate future needs when the industry is in better health.
The agency could also consider the co-ordination of advice through local authorities and others to help people who have a particular housing need. The Homes and Communities Agency has a massive task, and it is opportune that it is about to come into being. I am certainly looking forward to hearing its proposals and seeing how it will react. I want the agency to work through local authorities, as they have a key role to play. However, in the end, neither the agency nor local authorities and housing associations will be able to deliver unless the Government step up to the mark now and provide substantial extra funding. That will not only kick-start jobs and building in the industry but ensure that we address the fundamental problem of a massive shortage of houses to rent, which, in the current circumstances, will only get worse.
I am delighted to follow my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) in this important and timely debate. I agree with the third point he made: it is vital that hard-working families and people have the opportunity to get decent affordable rented housing. He is right to say that for that to happen we need to ensure that housing associations and local authorities have extra resources, so that they can tackle the job. In my area, Ashfield Homes has as many people on the waiting list as there are houses available. That is the scale of the problem.
I shall follow a different tack from my hon. Friend and talk about the housing element of the east midlands spatial strategy and the effect of the present economic crisis on that. The Minister will know that consultation on the spatial strategy finished on 17 October, but I hope that he will take my speech as a late submission. He will perhaps know that on 17 October, the East Midlands regional assembly announced a partial review of the spatial strategy—a strategy that is not yet agreed. If the planning framework is already changing and in doubt, what does that mean for long-term planning?
The central issue of the regional strategy is housing, which has been a contentious matter in Nottinghamshire. In the housing core area in Nottingham—basically, the Greater Nottingham area—the expectation is that 70,000 new houses will be built by 2026. Earlier this year, local authorities produced a sustainable urban extension study, which considered possible sites in greenfield and green belt areas. That caused widespread alarm. There is a perception in Nottingham that green belt and greenfield sites will be eaten up. Importantly, last Monday, local authorities published a second study, which has the even grander name of the strategic housing land availability assessment and which considers areas to be developed within the urban area. The current position is that roughly half the houses needed could be developed on what might be called brownfield sites in the urban area, and half on green belt and greenfield sites.
The essential question, which has already been mentioned in the debate, is, what kind of houses are to be built and where will they be placed? My anxiety arises from the fact that the market as it has operated in the past has delivered what I call executive homes: five-bedroomed homes with two cars on the drive on greenfield sites. What drives the market is the unfortunate fact that more and more families split up and require two homes instead of one; in addition, all of us are living longer. Now, instead of widespread erosion of the green belt, we need smaller, sustainable homes that are closer to town centres and have good transport links.
I am concerned that the East Midlands regional assembly now says that it intends to revise the housing estimates and that it considers the Prime Minister’s pledge to build 3 million homes by 2020 to be important. The demand to consider having more homes on greenfield and green belt sites will be irresistible. I simply say to the Minister that such houses are not needed for ordinary hard-working people. There are plenty of new flats in the city of Nottingham—the place is awash with flats that cannot be sold—but it is essential to have some family housing to give hope to children for their future. I want us to move forward quickly and have a planning system and a regional spatial strategy that have that principle at their core. Investment should be made in brownfield sites before greenfield.
The Government have a good record. They have exceeded their 60 per cent. target in the east midlands and have roughly achieved the figure of 75 per cent. We need more, but it will progressively become more difficult.
The hon. Gentleman makes some valid points. Is not one of the problems that brownfield sites often lend themselves to big developments of flats, rather than family homes? Home builders need to be more innovative in how they develop sites, so that they build family properties within a development of flats, rather than coming up with just one or two-bedroomed flats on brownfield sites and the big five-bedroomed houses on greenfield sites as the hon. Gentleman.
The hon. Gentleman is right, and the point that he makes was pursued by my hon. Friend the Member for Sheffield, Attercliffe. We need mechanisms to ensure that the market and the way we intervene in it deliver the answer to housing need, rather than the solution that brings profit to house builders. Unfortunately, up to this point, we have not been able to achieve that.
My plea to the Minister is this. He will now receive the results of the consultation on the east midlands regional spatial strategy. I hope that he will examine closely the housing element of it and that he will make it his strong and firm policy that what is important is smaller, sustainable homes near urban areas, rather than wholesale erosion of the green belt.
There is talk of an eco-town in Nottinghamshire on the site of RAF Newton. The present proposal is, to put it in professional terms, absolutely bonkers, but RAF Newton is a site with potential—potential for a smaller community, not the large scheme planned at the moment. With imagination, good planning and good design, a scheme could be developed on that site. I hope that the Minister will assure us again that if houses are built there, they will count against the housing numbers in the regional strategy. What it is important to get from this debate, from Government policy and from the autumn statement when it comes in the next few days, is a set of measures to ensure that there is hope for people in desperate need of housing. That can be provided only through greater involvement and greater intervention by the public sector.
I shall concentrate on specific measures that could help to resolve the problems that have been so well set out by those who have already spoken. As the Minister knows, I was asked to report to the Government on rural housing need. The report was produced in July, and I am glad to say that it received a lot of support from the Government. We now await a response. I will not go through the 48 recommendations, not least because many of them are for the longer term, but also because we do not have time to do so. I shall concentrate today on more immediate measures.
When the report was being drawn up, we were already seeing the beginnings of the current economic problems. The background, which I discussed in the report, is that housing need does not go away because house builders are no longer building houses. The fact that people cannot get mortgages to buy and that, at a time of falling house prices, people are unwilling to buy because they think that properties might be cheaper next week than they are this, does not alter the increase in household numbers and family break-ups, the fact that people are living longer, the fact that people are more likely to want to live alone, for a variety of reasons, or the fact that people aspire to a home of their own.
All that pressure, which led the Government to their target of 3 million homes—whether it is right or wrong, we are still talking about a lot more housing need over the coming years—is not going away. What happens in a recession and what is happening now is that our ability to solve the problems and provide solutions is eroded because house builders will not build. That has a knock-on consequence, which we have heard about, for housing associations, because the majority of affordable housing being built is on the back of private sector development. A massive loss of affordable housing provision is now starting to hit because new developments are not being started and even existing developments are not being completed. At the same time, people are less able, because of rising unemployment, to afford homes, so there is greater pressure on the affordable housing sector. There is more need for affordable housing.
Dealing with the problems that I have described is difficult in the short term. In the long term, we may be creating an even bigger problem, because as we come out of the current situation and people start to be able to buy, the houses will not be there for them to buy. That may ratchet up prices and we may go back into the same cycle. I know that Ministers are aware of that.
As there is not much time, I shall run through my four suggestions as quickly as I can. The first is obvious and I know that Ministers are considering it. The more the funding programme over the current spending round can be brought forward so that, in particular, the Homes and Communities Agency and current projects can forward-spend now on affordable housing projects, the better, partly because that helps to fill the hole in planned affordable housing delivered through private sector development and partly because it is counter-cyclical spending. I think that Ministers understand that. If more money can be found, that will be even more welcome, but even in terms of the funds that have already been allocated, bringing forward spending is important. Nevertheless, it is important that people think long term and not just short term with that housing development. The measure is not just an economic solution and a fiscal stimulus; it is about the housing provision needed in the long term.
I agree with the hon. Member for Sheffield, Attercliffe (Mr. Betts) that there are an awful lot of flats in cities that cannot be sold by the private sector. However, to put it bluntly, they probably could not be sold by the private sector even if we were not in a recession, because there has been massive over-provision. Although the Government acquiring large numbers of one-bedroomed flats in the middle of cities may appear to be an easy solution, that would not meet the priority housing need of families. The last thing they need is a cheaply built flat in the centre of town that was not even built to affordable home standards in terms of space, with no garden and so on. We need more family homes. To divert money into bailing out the private sector to too great an extent would simply saddle the state with undesirable city-centre flats that have not been built to the standards of affordable homes, that are not as well insulated, that do not have the space and that, in the end, could provide the state with the next generation of slum housing, particularly if it is all affordable housing so that whole blocks of flats are built up. There may be room for some within it.
I take the point that the hon. Gentleman is making. We are desperately short of family houses and buying up flats in city centres would not necessarily be a solution to all the problems, but certainly I see many couples, for example, who just want a home. If they knew that the allocations policies were such that, by going into one of the flats that the local authority has bought in the city centre, they might have a chance, probably in a year or two years’ time, of moving on and they would not be pushed down the waiting list because they had accepted that flat in the first place, there might be some room for buying such flats to help some people on the list.
There is room for buying some. I simply sound a note of caution about how far that policy is taken. There was another point in the hon. Gentleman’s comments, to which I shall return at the end, about how more flexible approaches might be taken.
It is important that the estates we build are mixed. The lessons of the past are that, in the long run, large rented estates create problems of their own, however well they may have been built in the first instance. The developments should contain both rented properties and properties that are affordable to buy. Where appropriate, it would be great to have some private sector housing in that mix, too, but that may be more problematic at the moment.
That brings me to a core point, where I think the Government have a role. There is now clear evidence that part of the squeeze on the mortgage sector is squeezing out part-buy affordable housing and, indeed, affordable housing where people buy, under a section 106 deal, the freehold but at a capped price that is affordable to local people. In both cases, there seems to be evidence that the mortgage companies, only a small number of which were willing to provide mortgages in those circumstances anyway, are in effect pulling out of providing mortgages at all. They have not announced that; the policy is not official, but it seems to be happening.
That is reflected in housing associations now being unwilling to build part-ownership properties and in part-ownership properties being transferred over to the rented sector because people are not coming forward to buy them. There are a number of housing estates in my constituency—estates being built by housing associations or in the development phase and estates that have already been built—where the part-ownership properties have been transferred over to rent because the mortgages are not available. I cannot emphasise enough to the Minister the fact that that is not because they are not desired or needed; it is happening because people cannot get a mortgage on them. There is a clear role for the Government in helping those individuals, which will be of both short-term and long-term benefit. In the short term it will help people to buy those properties, and in the long term it will help to ensure that estates remain mixed and have people with a range of needs and social backgrounds, rather than becoming purely more traditional tenanted estates, with some of the long-term problems that that can cause.
The Government have a role to play. Given their current interest in and talks with the banks, perhaps they will be able to put together a package that deals with mortgage availability. In addition, I remember not so long ago when councils provided mortgages. Perhaps we should think about that again for those types of property. That could be done together with lenders, and might reduce some of the risks they fear. Ironically, such properties are relatively low risk. The demand for low-cost home ownership packages remains even when the market falls. The value of those properties is unlikely to fall much, especially if it is linked to local wage levels rather than local house prices.
Thirdly, the report argues for a long-term planning process to create sustainable communities and new neighbourhoods. That should include a mix of housing, work opportunities and leisure facilities, not just estate-by-estate development. With the break in the market, more available land and a fall in the level of development, we have an opportunity to ensure that the next generation of development will create sustainable communities, community extensions and new neighbourhoods. Throughout the ’80s and ’90s we simply saw places doughnutted by estates.
Sustainable developments have the advantage of being properly planned. They involve a partnership between long-term investors and local authorities, with the result that the developments have greater stability. Of course, in a downturn that might fall back, but it will not be lost altogether as it is part of a longer-term scheme. The current fluctuation gives us the opportunity to pull into that long-term planning.
I raised this final point during a debate on the economy last week, and I would like to elaborate on it slightly now. At the moment, the Government are pushing councils to reduce the use of temporary housing. I have never been much in favour of people living in temporary housing. In my part of the world, that usually means bed and breakfast—not the sort of bed and breakfast where one might go on holiday, but houses in multiple occupation where people are kicked out during the day. Young families, people with children or single parents often do not have a base during the day, and I have always been against that kind of temporary accommodation.
The shortage of affordable housing has meant that councils have been taking long leases on private sector properties to provide what is classed as temporary accommodation, but which often provides good-quality accommodation for a year or two. The accommodation is in someone’s house, but for one reason or another the owner does not occupy it so it can be let to the local authority. The local authority provides guarantees on rent and on the condition in which the house will be handed back to the original owner. The process is therefore relatively risk-free for owners and supplies them with a guaranteed income stream, while providing housing for the kind of people to whom the private sector—for all sorts of reasons—is often unwilling to rent, but who are nevertheless in housing need.
Current policy presses councils to decrease their use of that system, but in the current circumstances, many houses are coming on to the market for rent because people cannot sell them. In addition, the number of people going on to the housing registers is likely to increase because of the economic circumstances. It would therefore make sense to take on those unsold houses or flats, not necessarily by buying them but by using that kind of lease. Encouraging councils to do that would be helpful. It would reduce the flood of unsold houses on to estate agents’ books and would meet immediate housing needs, without requiring the Government to take on the capital asset of properties that might not be appropriate for a long-term base of affordable housing.
I congratulate my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) on securing the debate and on his brilliant speech. I agree wholeheartedly with the arguments that he made.
The housing situation today contrasts sadly with the high hopes of last year, when I composed my famous lines, “Bliss was it in that dawn to be alive, but to be MP for Hartlepool was very heaven.” We had hopes of a big building drive, a Minister in the Cabinet to push it forward and councils that were allowed to build. What has happened since? We have been through three Housing Ministers and the target of 3 million new houses by 2020—not enough, according to calculations by Shelter—has been demoted to an aspiration. Building is falling of a cliff and new starts are down dramatically. Private builders are not building because they are going bust and housing associations do not build as they, too, have been hit by the credit squeeze. They now face the problem that right-to-buy sales are drying up and revenue is not coming in. The buy-to-let market has collapsed along with the collapse of its main financier, Bradford & Bingley building society, and despite all the promises, councils have still not been allowed to build effectively.
To add insult to injury, the guide rent increase for this year and next is 6 per cent. on council rents. That is above the rate of inflation and well above the historic cost average of previous rent increases. That is monstrous. The Government are draining huge sums out of housing revenue accounts, and with the rent increase, those sums will get bigger. That money should go to housing, not to the Government. The second addition of insult to injury is the scheme floated in The Times on Monday. It is the insane idea of turning council housing into the ghetto of last resort. It suggested that secure tenancies would end, tenancies would be reviewed, and if people were somehow not worthy of the fatherland, or employment or whatever, they would be booted out to make room for people on the waiting list. We should make room for people on the waiting list only by building more houses, not by booting out existing tenants. It is a ludicrous scheme and I hope that my hon. Friend the Minister will wholeheartedly disavow it.
We will not get anywhere near the build targets that we need over the next crucial two years in the developing situation. We are meeting on a cold November day in the grip of a gathering recession, and the best answer to recession is to build. What can be built most quickly? Houses. They are not huge railway projects on the east coast line, or Crossrail—those things take years to organise and build, but houses can be built quickly. In the 1930s, house building was the major answer to a depression, perhaps even more important than the rearmament programme. The building of those estates put people back to work and solved the immediate problem.
The immediate problem now is that we need public housing to rent for those who cannot afford to get on the ladder, and for the increasing number of people who will be thrown out in repossessions over the coming year as negative equity grips the market. That public housing could come from housing associations—social housing—but it should also come from councils. In the Government’s rush to encourage ownership, there is one aspect of economics that we have not understood. We can have ownership, but unless we build public housing for rent pari passu with private build, the cost of private building goes up faster than it would otherwise. Other European countries, where there is a far higher proportion of rented housing, have not seen the insane price escalation that has taken place in this country.
We must also build housing for rent to provide for those who cannot get on the housing ladder. Otherwise, people get on to the housing ladder when they cannot quite make it. That is the sub-prime crisis in this country. Unless we build public houses for rent, people will be pushed into ownership when they cannot sustain it. That is what has been happening. We must build private and public houses pari passu.
It is crucial that we have a big building programme. Who can do that? As my hon. Friend the Member for Sheffield, Attercliffe said, it could be done by the housing association and we could improvise in all sorts of ways involving local housing companies. I am not keen on that, but it is an innovation and should be tried. Mainly, however, the move must come from local authorities and council house building. They can supply what is needed, provided that we finance them to come back into building.
That can be done in one of two ways. One is by letting local authorities keep their own money. Instead of Government draining £1.5 billion every year from housing revenue accounts for their own purposes, we could let local authorities keep those funds. We could let them borrow by paying adequate management and maintenance grants—which are 40 per cent. underfunded—so that they can borrow on a stream of revenue. We could do that.
The Government are reviewing council housing finance, but that will take until next year, and it will not be implemented until 2010. What is going to happen in 2010? There will be an election. We will have made ourselves odious in housing estates around the country but we are not doing anything about the predicament. Unless we take action by building council houses and regenerating the estates, the Government will have failed.
My hon. Friend is a long-standing champion of local authorities being allowed to build new homes. His argument was certainly political in the past, but does he agree that this is now also a pragmatic issue? We have talked about housing associations. Some may be able to respond if extra funds come in, but in the current circumstances some may not. Housing companies may be a possibility, but it is technically difficult to set them up and they are not an immediate answer. The pilots and the arm’s length management organisations will produce only a handful of properties. Allowing local authorities to borrow and use their resources is now the key to unlocking the problem.
May I say how happy I am to find myself in total agreement with my hon. Friend? What he says is exactly right. We should finance councils properly. We can take less from their housing revenue accounts—the fourth option—or pay a direct development grant for councils to build, which would not be all that expensive.
Councils need to be lured back into building. Only they can put private builders back to work, with contracts to build council housing. That is what is needed. We have a waiting list of 1.6 million who will never get a house. We have a huge waiting list in Grimsby and north-east Lincolnshire. Those people are not going to get anywhere because we are not building houses for them to move into. We should put the councils in a financial position to start building and let them trigger a building boom. Frankly, the only solution to our current difficulties is to build, build, and build again.
I shall try to keep within the time limit, Mrs. Dean, although I shall have to skip some of the arguments that I wished to expand on. However, I agree with much of what has been said, so that should be relatively easy.
We are clearly in a market downturn for housing, but I hope that it will be seen, at least in part, as a market correction. I hope that we will never again see a return to the ludicrous housing market that we have experienced over the past 10 years. Insane multiples of people’s salaries were being offered for mortgages, and people were targeted by the sub-prime market on the conscious and frankly immoral understanding that they could not afford to repay the loans that were being offered—and in which a 25 per cent. deposit was regarded as ludicrously large.
I slightly take issue with the hon. Member for Sheffield, Attercliffe (Mr. Betts), although I generally agree with him. Many years ago, when I first tried to get on the housing property ladder, the 90 per cent. mortgage was almost unheard of. Increasing multiples and increasing lending have fuelled house price inflation to a great degree. House price inflation has been based, at least in part, on spiralling personal debt. Indeed, my hon. Friend the Member for Twickenham (Dr. Cable) often pointed that out at the time.
The Select Committee on the Office of the Deputy Prime Minister, of which the hon. Gentleman and I were both members several years ago, made that point when considering the supply of land for housing:
“Many witnesses pointed to the complexity of the housing market. There are many factors, other than supply, which affect affordability of housing. It is important for the Government to avoid an over-simplistic reliance on one policy and to examine a range of strategies which might influence demand.”
It went on to say:
“The particular nature of the housing market means a simple supply and demand model cannot be applied to the housing market. With the multitude of factors affecting house prices it is very difficult to support an increase in housing supply simply on the basis of improving affordability.”
That, of course, was the question that was asked of Kate Barker. She was asked not to consider housing need as such, but to tell us how much of an increase in supply would be needed to affect affordability. She probably gave a legitimate answer, but the question was wrong and rather dangerous.
I draw the Minister’s attention to an article written by Merryn Somerset Webb, the editor-in-chief of Money Week, only the other week. He wrote:
“It is true that Brown’s targets will not be met, but that doesn’t mean that the shortage of supply is getting worse—mainly because there was no shortage of supply in the first place.”
I am sorry, but the Select Committee report—the hon. Member for Sheffield, Attercliffe will remember this—pointed out on the first page the fact that there were more homes than households. That is still true today. The problems to which hon. Members have referred are to do with localised patterns of supply and demand, and the differing balance of various kinds of housing. They are absolutely right. The lack of social housing and affordable housing is chronic, and the imbalance between family homes and flats is a problem. However, there has not been a lack of supply overall.
Merryn Somerset Webb continued:
“If there weren’t enough houses in the UK, why would Paddington Basin—home to hundreds of new build flats—be pitch black at night? Why would the centres of Leeds and Manchester be jammed with empty and utterly unlettable, let alone unsaleable flats? And how would the FT magazine have managed to find several almost entirely empty housing estates to base a cover story on last weekend?”
The Empty Homes Agency estimates that Britain has 840,000 empty homes. Even the Federation of Master Builders—one would have thought that it had a vested interest in continuing the myth of a lack of supply—puts the number of empty houses in the UK at around 700,000.
I am terribly sorry; I really do not have time, otherwise I would do so.
Even if we question some of the statements about supply, as some hon. Members might, serious social and environmental consequences will result from the Government’s strategy. One of them has been alluded to this morning.
About 8,100 new homes are planned for the urban area in my constituency. That plan is supported by almost all parties. If 40 per cent. of those houses were for social housing—I tend to agree with the hon. Member for Great Grimsby (Mr. Mitchell) that they should be overwhelmingly social housing for rent—every person on Cheltenham’s housing waiting list would have a home. The trouble is that that is not the total number. The regional spatial strategy pushes the number up to 13,800. As a result, 5,000 will have to be built on the green belt to the north of Cheltenham and 1,300 on the greenfield sites to the south. The consequences of that are clear for the wider housing market and for areas of housing deprivation and areas in need of regeneration.
Professor Ian Cole, who may be from the constituency of the hon. Member for Sheffield, Attercliffe, gave evidence to the ODPM Committee all those years ago. He said that
“it would be entirely misleading to view this in terms of ‘the North’ catching up ‘the South’: the disparities are still intense. The Barker recommendations, focused on easing supply constraints in high demand areas”—
like those in my constituency—
“would simply intensify these differences, with acute difficulties for labour mobility, the revival of vulnerable local markets and the capacity of the construction industry.”
The West Midlands regional assembly made the same point in evidence. It said that focusing growth on areas that are already affluent, already growing and already prosperous undermines attempts at urban regeneration.
Focusing on supply is a problem because, as a result, we ignore the real issue—the chronic lack of social housing. Historically, house building numbers decreased not because of the private sector, which was relatively consistent over the decades, but because of the collapse after Mrs. Thatcher’s intervention and the resulting inability of councils and other social landlords to buy and build social housing for rent. That needs to be tackled urgently. I entirely agree with other hon. Members on that point.
The environmental consequences are serious. I have considered the matter mainly from a constituency perspective. A huge proportion of our green belt is about to be bulldozed by developers. Of course, the developers are not considering the brownfield sites but are heading first for the greenfield sites. We are fighting one planning appeal after another, all on greenfield sites. The developers are not considering brownfield sites at all.
The Environmental Audit Committee’s recent report highlighted the acute risk that in this sort of market greedy developers will develop the greenfield sites first. That is happening. There is no shortage of enthusiasm among developers for providing houses around my constituency, but they are all on greenfield sites. The risk is acute. However, the Campaign to Protect Rural England says that the problem is nationwide. It estimates from the various regional spatial strategies that 27,000 hectares of greenfield land are under imminent threat. That is an area the size of Birmingham.
We should consider the climate change consequences of such a new build—developing an average new build house probably results in at least three to four times the carbon footprint of converting an existing property. We should also consider the loss of agricultural land and greenfield areas, which are loved and valued by, and good for, local people. Mind’s “Ecotherapy” report and reports by the Countryside Agency and others emphasise how important green spaces are to people. It all adds up to an environmental catastrophe. The Government have the power to reconsider the sequential test. Even if we agree that we need these houses, at the very least we should develop brownfield sites first and greenfield sites last. That way we will avoid many of the social and environmental consequences of current housing policies.
I, too, congratulate the hon. Member for Sheffield, Attercliffe (Mr. Betts) on securing this important debate. The fact that so many hon. Members focused on the lack of social housing underlines where the heart of the problem lies. More generally, however, the housing market is unfortunately in the middle of a perfect storm: falling house prices, a market downturn, and supply and affordability crises. Those are the difficult issues that we must unravel. The problem cannot be solved by focusing purely on social housing, because so much of the housing market interrelates. I am concerned that the Government’s primary focus has remained on private sector housing to buy, but no real attempt has been made to boost the supply of affordable housing to rent. Dealing with that will be critical to dealing with the wider problems.
Of course, the private sector is important, but it is in a freeze at the moment. Some of the Government’s actions do not seem to have helped matters. As has been mentioned, we have had the stamp duty holiday, which has made matters worse over the summer. Constituents of mine have had their exchanges fall through because the buyers have said, “There’s no way I’m going through with this when there could be an imminent announcement of a stamp duty holiday.” I have also received anecdotal evidence that home information packs are causing real problems. Some of my constituents are not putting their properties on the market. They are worried that they will not sell their properties and that they will simply be throwing away a few hundred pounds, because they will have to take them off the market. Although some estate agents have offered to cover those costs, that is only on condition of sale. Has such anecdotal evidence been gathered nationally to assess the impact of that uncertainty?
The Government’s response remains focused on shared ownership schemes, which are proving difficult. Constituents have come to me because they have found it difficult to negotiate their way around the first-time buyer and shared ownership schemes. In my constituency, where house prices are incredibly high and incomes very low, many people have failed to qualify. The emphasis has been on helping public sector workers, but such workers in Cornwall are relatively well paid. People on very low incomes, on the other hand, have gone through the rigmarole of being told that they are entitled, only to find out at the last minute that they are not.
Hon. Gentlemen are right that the key problem is that, effectively, lenders are withdrawing from the market and viewing the schemes as 100 per cent. mortgages, but there is no such thing anymore. They simply are not being offered. Rather than simply re-announcing investment available to those schemes, the Government need to take a long, hard look at whether they are helping people who want to buy in areas where affordability is in crisis. In Cornwall and elsewhere, buying a home remains completely out of reach. The Government need to bear in mind that informal withdrawal from the market. Simply saying, “The money is there,” does not mean that people will take up the schemes.
Let us consider the knock-on effect. In the past few years, many people have overstretched themselves massively. It is important to ensure that steps are in place to protect them, as they face difficulties repaying their mortgages. The recent court case that found that repossession orders after two missed payments were justified was very worrying. Do we need to give guidance to courts saying that repossession should be a last resort, or do we need primary legislation and regulation? What can we do to make it clearer that mortgage terms can be renegotiated to prevent people from having their houses repossessed?
What are the Government doing to regulate sale and leaseback, which is a resort that people often look to, but which they do not really understand? It is not properly regulated and could leave people in an even worse situation. What are the Government doing to develop schemes to staircase down? The focus remains on helping people to staircase up into home ownership, but there is no clarity about what can be done to help people to staircase down, which provides amazing opportunities for registered social landlords to pepper-pot, to prevent people from losing their homes and to increase the supply of affordable rented housing. What can the Minister do to drive forward that agenda?
My other concern about those who face such difficulties is the differing regional impact. A colleague told me that repossessions in Kingston are down. We expect the trend to be upwards, but that problem does yet not appear to be feeding through, which is surprising given that so much of the slump is focusing on the financial services sector. We would expect the London area to be hardest hit, but of course we are talking about people with relatively higher incomes and bigger reserves to fall back on. Perhaps the bump will come later. In Cornwall, however, we see quite a lot of distressed home owners and repossession orders in the courts. What is the Minister’s understanding of the regional impact?
What advice is available to people in difficulty? Demand is far outstripping the supply of support. Forty per cent. of citizens advice bureaux calls go unanswered, because they cannot cope with the number of people asking for help, although that is not just on housing matters—perhaps on rent arrears and so on. However, what can the Government do to ensure a clear route for those in financial difficulty, so that they can receive the necessary support and advice? So much remains dependent on the voluntary and charitable sector. It was struggling to deal with numbers before, but things look like getting worse.
There is a massive crisis in CABs—at least in rural communities, although I cannot speak for urban areas—especially in recruitment and funding. I hope that Ministers will consider that, because at the time when CABs are most needed, they are most threatened.
My hon. Friend underlines my point.
The concern is that events in the mortgage market are having a knock-on effect in the social and private rented markets. Some of the most distressed selling is in the buy-to-let market. Again, there is more uncertainty in private rented tenancies. Are the Government monitoring repossessions on the basis of whether they involve owner-occupied or buy-to-let properties? That might offer an explanation. One would imagine a surge in the supply of private rented accommodation, but rental prices do no appear to be falling. Is the Minister’s Department monitoring that?
The social rented sector is the key issue. Even if the Government were steadily hitting their target of 50,000 new homes a year, it would allow them only to keep pace with the problem. We could be facing a massive surge in demand for social rented housing, and it is not clear exactly how the Government will respond. Some 1.7 million people are on the waiting list, and in many places, the number of people on waiting lists is greater than the stock of social housing.
The Government’s announcements are not enough. The key problem is that social house building has reinforced the cycle. In the boom times, it reinforced the boom, but now we are in the bust, nothing is being introduced under section 106 of the Town and Country Planning Act 1990. Many registered social landlords depend on private sales to fund their social housing. That is also reinforcing the bust. We must break out of that cycle, and the Government have not done enough to do that. Figures were announced yesterday on the clearing house deal, which is supposed to help to free up affordable rented housing for social use in areas in which it is needed most.
Following a scheme that was announced in May, 1,531 homes have been purchased for social-rent use. If we consider the areas of greatest need, however, only 18 homes have been purchased for social-rent use. In all the areas in which the demand is greatest, the least is being done. That brings us back to the fundamental issue of what happens to housing revenue account subsidy. Tackling that is important, as is allowing councils to borrow. Councils are sensitive to the problems, but they do not have the flexibility to deal with them.
I have lots more to say, but I will close by highlighting the good work that is going on locally to tackle some of the problems. Councils such as Oldham are expanding their equity loan schemes to try to get empty properties back into use and to encourage the owners of those properties to get them back into use.
Forums are being set up with local mortgage lenders. Some councils are keen to get into leaseback and rent-back schemes and social mortgage schemes. Will the Minister tell us what his Department is doing to connect with local communities, which best understand their own needs and are proactive in proposing solutions? Should the Department not see its responsibility as supporting local solutions, rather than sitting on high and coming up with bigger packages that do not hit the intended targets? Areas of most critical need are not seeing the benefit of the measures. I hope the Minister will address those issues.
It is a pleasure to serve under your chairmanship for the first time, Mrs. Dean. I congratulate the hon. Member for Sheffield, Attercliffe (Mr. Betts) on securing this important debate.
We cannot look at this issue without analysing the Government’s lamentable record on housing—no one else has said that, so it is worth while mentioning it. The moral of the story is that the top-down approach has failed since 1997. Under Labour, about 148,000 homes have been built each year, compared with 171,000 between 1979 and 1996. Some 1.6 million people are on the social housing register. We have seen a rise of 54 per cent. between 1996 and 2006. In the hon. Gentleman’s own region of Yorkshire and the Humber, that number has gone from 173,000 to 270,000 in the past 10 years.
I agree very much with the sentiments expressed by the hon. Member for Great Grimsby (Mr. Mitchell): the number of homes built by local authorities is pitiful. It collapsed in 2006 to 283 units. Conservative councils, such as Dover, are taking the lead and building new council homes. As someone who has had a long-standing interest in housing, he is right to challenge the Government on the review of housing revenue and right-to-buy receipts. We will address that issue when we produce a housing Green Paper next year.
Considering the history of the situation, will the hon. Gentleman reflect on the fact that when right to buy came in—I think that there is a case now for suspending the right to buy for certain properties in certain areas where the pressure is enormous—we were given a commitment by the Government that 100 per cent. of the receipts from right-to-buy sales could be used by individual councils to improve their housing stock and replace the houses that were sold? That promise was not delivered by the last Conservative Government. If we are discussing failed promises, that was certainly a big one.
We are considering the record of the Labour Government in their 12th year. Frankly, we face this lamentable failure in housing policy following a period of benign economic circumstances. In 2007, 53 per cent. of dwellings were houses, which is down from 80 per cent. in 2001. I agree with the hon. Member for Truro and St. Austell (Matthew Taylor) that we must get the housing mix correct. The current situation comes about as a result of a top-down regional spatial strategy approach that dictates how many thousands of homes are forced into different regions. That point was raised by the hon. Member for Cheltenham (Martin Horwood) as well. Social mobility has seized up, too.
No, I am afraid that I do not have time.
The HomeBuy Direct scheme was initially considering 120,000 units. In the middle of last year, we were looking at 207. Home information packs have done nothing to add to the viability of the housing market. The Government’s own trials, which cost £5 million, have shown that they have largely failed to add to the viability of the wider market.
The dithering over stamp duty, which the hon. Member for Falmouth and Camborne (Julia Goldsworthy) mentioned, had a demonstrably negative effect on the housing market. One had only to talk to the National Association of Estate Agents to confirm such a view. Eco-towns are a prime example of the Government’s short-termism and a discredited failure. If such a policy were a pet budgie, one would take it to the vet and have it put down. The Minister for Housing is to pull the plug on the scheme and kill it off gracefully, as only she can. She is doing that after admitting that her predecessor misled the House on whether such projects would be built on greenfield or brownfield sites. The Government are still fiddling the planning process to squeeze out local decision makers—elected councillors—from such decisions. Where does that leave us?
Our Prime Minister, the great helmsman, announced some incredibly ambitious, but massively unrealistic, house building targets in June 2007. Were such targets an ambition or a policy? The Government are not singing from the same hymn sheet in that respect.
The Royal Institution of Chartered Surveyors expects the number of new-built homes to be fewer than 100,000 units. The Government’s limited attempts to kick-start the housing market, which we have supported, seem doomed to fail because they lack ambition. The HomeBuy Direct scheme will work only if the 70 per cent. that the homebuyers have to find is lent by lenders, but such buyers are considered sub-prime mortgage holders and they will have grave difficulty in securing that funding, and we will be no further forward.
The wider picture shows that just 33,000 loans for new properties were approved in September. The latest figure from the National House-Building Council shows that newly registered homes are down 68 per cent. in the 12 months to October 2008. Average daily sales are down 22 per cent. in the same 12-month period.
As other hon. Members have said, the Government have failed on housing supply in a decade of boom. Now that we are at the beginning of the bust, they are unable to meet demand. The housing market is seizing up and developments are collapsing. Therefore, what should we consider in the immediate term? The hon. Member for Cheltenham talked about the use of greenfield and brownfield sites. The Government are not doing everything that they can about the remediation of brownfield sites and are not assisting developers to get that tenure mix correct by helping them to develop such sites in a timely way.
If the Conservatives were in power, we would take direct action on stamp duty. We would scrap home information packs and regional spatial strategy housing targets because we are committed to localism. We believe that local people will deliver if they are given an incentive and provided with the infrastructure to make it feasible and viable to develop. There is not a great chasm between us and the Liberal Democrats in that respect. Moreover, we would consider new initiatives such as community land trusts. I am glad that the Government have moved closer to our position on that since we debated primary legislation earlier this year.
In addition, we must look at section 106 agreements, and we have to work with people locally. I agree with the hon. Member for Truro and St. Austell on that, and I commend him for his report. There were many ideas in it that we would seek to put into practice in government, although not all of them. He has done a good job, particularly in focusing on the crisis in rural housing.
The Government need to trust local communities and their elected representatives. We need incentives, infrastructure and the right type of housing in the right place. This Government have run out of ideas, they have run out of policies and soon they will have run out of time. We need a new Government committed to localism, with new ideas to revitalise the housing market fully. A Conservative Government would do that, as they have in the past.
It is a pleasure to serve again under your chairmanship, Mrs. Dean. I congratulate my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) on securing this timely and important debate. I agreed with virtually everything he said. His analysis was astute and knowledgeable, and his expertise in the housing sector came out strongly. In fact, the whole debate has been knowledgeable, and I have agreed with an awful lot of what has been said, with the exception of the remarks of the hon. Member for Cheltenham (Martin Horwood); I do not think that I agreed with anything that he said.
I was also disappointed with the hon. Member for Peterborough (Mr. Jackson). Given that we are facing immense difficulties and that hard-working families out there are frightened about their housing situation, I thought that his contribution was somewhat backward-looking and introspective, and I was not surprised that in the midst of the biggest global financial turbulence since the first world war and with a dire need to recapitalise the banks’ balance sheets, the Conservatives’ one tangible solution is to scrap home information packs. They will need a bit more than that to become a viable Opposition.
I am conscious of time. We could spend a great many hours debating this important issue, but I will focus on three matters. I will summarise the housing market challenge that we face, which has been eloquently articulated by my hon. Friend and others; describe how we will prepare for the upturn and support the construction sector and hard-working families who fear a housing shortage or repossession; and discuss the role of local authorities and the Homes and Communities Agency, and how the relationship between them will be key as we move forward through the current turbulence towards the upturn.
I will be up front. I am not going to shy away from the challenges that we face in the housing market. The Government recognise the massive challenges in housing due to turbulence in the global financial markets. As has been articulated well in the debate, house prices have fallen, people are finding it harder to get a suitable mortgage and house builders are experiencing very challenging business conditions. Housing associations, as a result of stresses on their business model with regard to section 106 agreements, are finding it difficult to provide the finance to build houses for rent.
Most people’s homes are worth far more than when they bought them, and mortgage rates are low by historical standards, but I do not want to be complacent about that and rest on my laurels, as it would be a wrong approach. These are undoubtedly difficult times for the housing market. Demand indicators have weakened and are forecast to remain weak. Buyer inquiries to the Royal Institution of Chartered Surveyors have fallen every month since the beginning of 2007, and unsold stock figures are poor.
The basis for current circumstances is exceptional instability in the international financial markets. That is where we have taken the most urgent and radical action. The Prime Minister and the Chancellor should be commended on their work to help to recapitalise the banks. They have taken extraordinary measures for extraordinary times. That should help to address the underlying lack of liquidity and credit that has created a more risk-averse approach to lending among financial institutions and frozen the mortgage markets. It will take time, as has been said, but the housing market will start to see the benefit. It is encouraging that thanks to political pressure, not least by my right hon. Friend the Chief Secretary to the Treasury, the Bank of England’s 1.5 per cent. cut last week has been passed on. There is still work to be done, but the Government are putting pressure on the banks in that respect.
Although the crisis is global in origin and nature, the Government are committed to taking direct action to alleviate pressures in the domestic housing market. This Government do not think that the current correction is a natural feature of free markets and that we should ride the storm. This Government are not a Government who say that the price is well worth paying or that if it is not hurting, it is not working. We are keen to ensure, and are committed to ensuring, that we take action and work day and night to address people’s fears about repossessions and housing shortages, and to put policies and actions in place to help to mitigate those risks.
If we are being candid about the crisis, surely the Minister will admit that it was his Government’s regulatory framework that allowed sub-prime lending to continue and presided over £1.3 trillion of personal debt, which is hugely greater than in most European countries and will exacerbate the difficulties in the housing market.
I do not want to get into that debate, but I seem to recall that the Conservative party argued that there was far too much regulation in the financial markets, and that the City of London was at risk of losing its status as the premier financial centre in the world as a result. The Conservatives cannot have everything, I am afraid.
House prices have risen in recent years as a result of benign economic conditions and people’s feeling of security in their jobs, but also as a function of the relationship between demand and supply. We have not built enough homes in this country for a generation. I take great issue with the hon. Member for Cheltenham. Supply is an important factor. It is not the sole factor, but it is important, and it is something that we need to address.
Does the Minister agree with what Kate Barker said in 2002? She said that
“you might start out with an intention to build X in an area and two years down the line what has happened in the market has suggested to you that X was too big and you should cut the target”.
People in this country are living longer, and the way that they live is changing. I suggest that as we face an economic downturn, greater stress on households may result in family break-ups, which will put even more pressure on housing. This is my key message: despite the short-term turbulence, which we recognise, acknowledge and are taking steps to act on, we need to have sight of long-term factors.
To echo the analogy used by my hon. Friend the Member for Sheffield, Attercliffe, we have been blown off course by global financial pressures, but the desert island that we need to get to—[Laughter.] That lovely Caribbean island where everybody has a decent home that is of good quality and has good infrastructure and facilities is key. That is why the Prime Minister has made it a key part of the Government’s agenda.
My hon. Friend made some extremely good points about confusion over shared ownership. In the case of shared ownership and shared equity, there are different products for different markets, but I understand what he said, and I will take it away and consider it to ensure that we can negotiate our way clearly through the shared ownership model.
I am keen not to lose skills in the construction sector as a result of the economic downturn. The Government have taken action, and we continue to reflect on it. For example, we have created an apprentice matching service in conjunction with ConstructionSkills, the Department for Innovation, Universities and Skills and the Learning and Skills Council to help to retain apprentices with employers or place them with new ones if redundancy is being considered. That service went live in September. We have also developed national skills academies for construction on larger building sites to ensure appropriate training.
I am afraid that, largely as a result of my having allowed interventions, I cannot address the fundamental points, particularly the one about allowing local authorities to build, which I would encourage and would like to see. However, the Government are pressing ahead with needed reforms to focus on the long term, despite the economic turbulence, and to condition the market and industry for growth. Our focus is now on stimulating market conditions, seeking new ways to deliver the housing that this country urgently needs and ensuring that a planning framework is in place to support a rapid market recovery when recovery comes. We must focus on the long term while addressing the short-term turbulence that we face.
Children of Prisoners
I think that this is the first time, Mrs. Dean, that I have spoken in a debate with you in the Chair, and I welcome the opportunity to do so. I also very much appreciate the fact that the Minister for Children, Young People and Families, who has been very busy in the last couple of days with the tragic case that has been in the media, has taken the time today to respond to the debate.
I am very aware that this is a cross-departmental issue, involving the Department for Children, Schools and Families and the Ministry of Justice. The Cabinet Office has also been involved, with its families at risk review. The joint review that was published about a year ago by the DCSF and the MOJ was a very important step in highlighting some of the issues that need to be addressed—issues that have been neglected for a long time.
When the children of prisoners have come up on the political radar, which is not very often, much of the focus has been on the MOJ side of the equation. The issue arose, for example, during consideration of the Offender Management Bill. The focus has very much been on the importance to prisoners of maintaining family relationships while they are inside prison, which has been proven to reduce significantly the risk of reoffending.
Organisations, such as Action for Prisoners Families, have led campaigns on facilitating prison visits, reducing the cost of phone calls from prisons and reducing the distance from their home towns that prisoners are placed—an issue that was flagged up in the Corston report, particularly in relation to female prisoners. Other organisations, such as Save the Children, have done a lot of good work in creating children’s visiting centres to make it easier for children to visit their parents in custody. That type of work is good, but I do not intend to dwell on those issues today, because they are very much the responsibility of the MOJ. Today, I want to look at this matter from the other side of the equation; from the child’s point of view, rather than the prisoner’s.
The statistics on the number of children who are affected by parental imprisonment shocked me when I looked into them. About 7 per cent. of British children will experience the imprisonment of a parent during their school years. It is estimated that about 160,000 children a year have a parent who is sent into custody. The Corston report says that 18,000 children a year are affected by a mother’s imprisonment and a third of mothers who go to prison have a child under the age of five.
To put those statistics into some kind of context, each year, more children are separated from a parent by imprisonment than by divorce. The number of children who have a parent in prison at any time is two and a half times the number of children in care and more than six times the number of children on the child protection register. Obviously, with rising prison populations, those figures are expected to rise.
I will not go into much detail on the issue today, but the impact of a sibling being imprisoned has been shown to be just as significant on a child in some cases as the imprisonment of a parent. That is something that we should also bear in mind when examining such statistics.
As for the impact on children of a parent’s imprisonment, it has been shown that a child whose parent is serving a custodial sentence has three times the risk of developing mental health problems. There is obviously a stigma attached to a parent being sent to jail and the child may feel ashamed of it. Alternatively, they may sometimes blame the parent for indulging in the criminal activity that led to them being sentenced, or they may feel rejected by the parent and feel that the parent has chosen to engage in that criminal activity, rather than putting their child’s interests first.
As a knock-on effect, the children of prisoners may be subjected to bullying or teasing—particularly at school, but also in the local neighbourhood—especially if the crime that the parent committed has affected people who live in close proximity to the family. That situation is obviously worse if there has been significant media coverage of the crime, which is an issue that I have wrestled with for some time. Obviously, there is a public interest in reporting the names and other details of offenders. However, if we read in the newspaper, for example, about a father of several children who has been convicted of downloading indecent images of children from the internet, we have to imagine the impact that that story has on a child. Although it is part of the punishment that the person who committed the crime has their deeds reported in the press, one wonders about that person’s children having to go to school the next day, when everyone has read what their father has been up to.
There are other impacts on the children of prisoners. Children whose parents have been in prison are much more likely to display antisocial or delinquent behaviour, and they are also much more likely to end up serving a custodial sentence themselves. In 2006, a study showed that 48 per cent. of boys whose fathers were in prison ended up being convicted themselves as adults, compared with 25 per cent. of boys who were separated from their father between birth and the age of 10 for other reasons.
Obviously, there will also be an impact on the family. I hope that people will forgive me for generalising and tending to talk about a context in which the mother stays at home and the father goes to prison. In such circumstances, the mother will obviously be distressed and may suffer emotional problems that have a knock-on effect on the children. The family is also likely to experience financial problems. If the father was the main wage earner in the house, the family may find that they have to claim benefits, move home or school and perhaps go on to free school meals.
If a single parent is imprisoned or if both parents are imprisoned, there is a real issue about who takes responsibility for the child. In a debate in the House of Lords last year, Lord Judd said that, when he visited Holloway prison with the Joint Committee on Human Rights, some prison officers said that prisoners had told them that they had left their children unattended.
Such children are sometimes taken into care or the other parent sometimes takes over responsibility. Quite often, however, informal arrangements are put in place: grandparents, friends or other relatives of the prisoner might look after the children. I am told that, when a warrant is executed for someone’s arrest, the police have to notify social services that children will be in the home and social services must bear that in mind and ensure that suitable arrangements are made. However, that does not apply when someone is arrested in the course of committing a crime or in various other circumstances.
I have some concerns about such informal arrangements. In my constituency, a significant number of women are addicted to hard drugs and have children of primary school age. Quite a few of those women are involved in on-street prostitution. If a woman in that situation is given even a short sentence of imprisonment, her child might well end up living with an unsuitable boyfriend, or perhaps even her pimp; it is quite likely to be someone else who is a drug addict and who does not have the child’s best interests at heart. Furthermore, if the child is, for example, a 13 or 14-year-old girl, I do not need to say what kind of concerns that would raise.
There is no systematic way of checking that the arrangements that are put in place when a parent is imprisoned are suitable for the child, which raises a number of issues. For example, who has parental responsibility for the child? If the child has an ongoing medical condition, is the person looking after them able to meet their health needs? Are they aware of the treatment that the child needs? Could they give authorisation if the child needed urgent medical treatment?
There are also financial issues, such as who gets the child benefit. If the child benefit is not passed on to the person who is caring for the child, will that person have the financial resources to meet the child’s needs?
With regard to visits between the imprisoned parent and their child, will the carer be able to maintain that contact? For example, if the carer is a grandparent, they might feel that contact with the parent is not a good idea, particularly if the parent is seen as a bad influence on the child. Alternatively, grandparents may not have the financial resources or the transport to ensure that such visits happen.
There is also an issue about what children are told when a parent goes into prison. It is estimated that about a third of such children are not told anything at all about where their parent has gone. Another third are lied to—for example, they are told that their father is working away from home. Quite often in those circumstances, however, the children will find out what has happened through school, media reports or word of mouth in the local community. Obviously, if children have not been told that their parents are in prison, they will not be taken to visit them, and they will lose contact with them.
As the joint review by the MOJ and DCSF identified, we simply do not know who the children of prisoners are, where they live or who is looking after them. The children’s schools do not know, the prisons do not know and the local authorities do not know. There is no reliable information out there and no statutory support.
The Government have done some good work, however. This issue was flagged up in a couple of questions in the Every Child Matters consultation, but it did not make it into the White Paper. Perhaps the Minister will comment on that. The families at risk review also flagged up this issue as an indicator to look out for.
The Sure Start children’s centre practice guide gives the best guidance that I have seen on the need to personalise services for the partners, children and families of prisoners, and there is also some ad hoc good practice out there. Holloway prison has a first night in custody programme, through which it ensures that the well-being of children is checked and that mothers are reassured. That programme is flagged up when women are taken into prison.
There are no systematic mechanisms for informing schools that a child’s parent has gone into custody. In one survey that I looked at only two schools had been informed by agencies and those cases involved children who had been taken into local authority care. However, some 70 per cent. of schools were informed by parents or indirectly. In-school support for children in such circumstances varies dramatically. If children have already been excluded from school, they could drop out of the system altogether, because nobody knows where they are or what their circumstances are.
What action should be taken? The starting point is the Ministry of Justice, which should consider the impact on children whenever an adult is arrested and put into police cells, is remanded in custody or is facing a prison sentence. I am told that there is guidance telling Crown court judges that they should consider the impact on a child of issuing a custodial sentence, but that there is no similar guidance for magistrates. Given that 55 per cent. of immediate custodial sentences are imposed by magistrates courts, that guidance needs to be addressed. There is an issue about whether reports are always commissioned from the probation service about the home circumstances of prisoners or potential prisoners and the impact on their children.
We do not give deferred-start custodial sentences in this country, but perhaps we should consider doing so. They are quite common in the United States. If someone needs to make complicated family arrangements or to find a carer for their children, their sentence could have a delayed start, so that they could put those arrangements in place.
Prisons need to do more to protect children’s interests. What they do in that regard depends completely on prison governors and the prison regime. For example, it is not compulsory for them to facilitate visits. As I have mentioned, the cost of phone calls from prisoners to their children is very high. There are some good initiatives, such as Storybook Dads, in which fathers read stories on video tape or cassette for their children, but there is no consistent programme across the board to ensure that children are taken into account.
It is important to identify which children are affected and who is looking after them. Local safeguarding children boards have a role to play in that and in mapping what services are available locally. One good thing that we have done in recent years is to flag up the needs of young carers in the system within schools and other agencies. We could learn lessons from that approach in relation to identifying the needs of prisoners’ children. For example, some young carers feel a sense of stigma about their situation if they are caring for a parent who is mentally ill, a drug addict or an alcoholic. There are lessons to learn about not waving a red flag and pointing it out to everyone that such children are young carers or have difficult family circumstances.
I agree with the joint review’s conclusion:
“The focus should not be on creating a new strategy but rather personalising and developing the existing offer to children and families and embedding this in existing cross-government work”.
As I have said, the Sure Start children’s centre practice guide is a good example of that. It talks about working with children on addressing issues of self-esteem and reducing anxiety. It also discusses the provision of child care when the mother is visiting the father in prison and helping parents with their changed financial circumstances.
We need better co-ordination of voluntary sector help, to which funding is relevant. The sector plays a big role in running visitor centres, and the Action for Prisoners Families helpline receives about 1,200 phone calls a month. The voluntary sector also has a role to play in advising parents and carers on what to tell children about the imprisonment situation and on how to deal with the upheaval.
Schools have an important role to play, but there is a question about how much a child’s situation should be flagged up. When my right hon. Friend the Secretary of State for Communities and Local Government was at the Home Office, she wanted to work with offenders’ children to address the likelihood that they might become offenders, but we do not want to give them the impression that they have been tarred with the same brush as their parent or that they are being blacklisted.
One thing that came through powerfully in the Howard League for Penal Reform report, “When big brother goes inside”, was that children did not want their teachers to know that they had a brother in prison. They thought that it was not their teacher’s business, or that they might be pitied, or that their teachers would think that they were cut from the same cloth as their older brother. So there is concern that targeting could affect children in a bad way, rather than ensuring that they get the help that they need. That issue could be addressed across the board, rather than being specifically addressed in school.
Schools need to be made aware of what is happening, but perhaps the relevant children should not be taken to one side. There has been some suggestion that this issue could be addressed on a whole-class basis, with the whole class being told how to deal with children whose family members are in prison, but I can imagine a child sitting there thinking that the eyes of the whole class are on him or her. So, although it is important that these issues are flagged up, it should be done as subtly and sensitively as possible.
It is a pleasure to have you in the Chair, Mrs. Dean. I congratulate my hon. Friend the Member for Bristol, East (Kerry McCarthy) on securing the debate and on choosing this subject, which she addressed in a characteristically rounded and common-sense way. I am particularly grateful for her focus on the needs of the children whose parents are in prison, rather than simply on the adults. As she rightly says, this aspect is easily missed in everything that we are doing to focus on vulnerable families.
My hon. Friend is right to point out that there are many sensitive issues to consider in relation to information sharing, but we must address them. They should not be reasons not to take this work forward. The Government and I recognise the need to ensure that the approximately 150,000 children who have a parent in prison receive the support they need. Our Every Child Matters commitment means just that: every child, particularly the most vulnerable, matters.
There is no doubt that children with a parent in prison are among the most vulnerable. They are vulnerable in the here and now because of their family circumstances, and they are also vulnerable because of their future prospects and where they might end up. That is compounded by the fact that such children are, for reasons that we understand, much more invisible than other vulnerable children. They are spread through the school system and there is no easy way of identifying them, as there is with children in care or disabled children. That needs to be addressed.
Let me tell my hon. Friend what we are trying to do through universal services to raise awareness and make this group of children a priority. I shall also tell her about a specific initiative that places the needs of this group firmly at the heart of what we are doing. We have given local authorities significant funding for vulnerable families, targeted family support and family intervention projects. In that work, children whose parents are in prison have been identified as a priority group. In schools, which she has mentioned, there are initiatives such as the provision of parent support advisers. The training for those people will identify such children.
There is now significant funding through the voluntary sector, which is often in the best position to identify such children and work with them. Through the children, young people and families grant programme, the children of offenders have been identified as a priority group. Similarly, the work that we are doing to support better parenting is identifying offenders’ children as a priority group. Some good work has been done on that. Middlesbrough local authority is using some of that resource to fund contact between children and parents in prison, as well as parenting programmes in prison. We are aware that we need to raise the consciousness of local authorities, schools and voluntary organisations, in their Government-funded work with families, of the need to identify this group of children as a priority.
I wish particularly to tell my hon. Friend about the “Think Family” initiative, which is about improving the life chances of families at risk. It is really important to ensure that individual children with parents in prison are identified properly at local level. Whatever happens after that in individual cases, there needs to be a much better link between adult services, which will be the first to know that the parent is in prison, either through the criminal justice system or other sources, and children’s services.
Linking adult and children’s services and ensuring that information flows between them is a problem more generally. That is why, in a report published by the Cabinet Office earlier this year, we identified that the next big step in the progressive improvement of local services, particularly for children, was to ensure the integration of children’s services in social care, education, health and so on. The next important step is to ensure that professionals providing services locally think about families as a whole. Families do not split themselves up, saying, “Adults are here, children are there.” They live as families including adults and children. The need for a step change in the flow of information and joint work between adult and children’s services is therefore really important.
As a result of that report, my Department is funding 15 family pathfinders to develop and test the best way of implementing a “Think Family” approach to vulnerable families. They will identify some of the barriers to securing better information right across family services, and they will help with the early identification and intervention that is so important. Children of offenders, and specifically of prisoners, have been identified as a priority group for those pathfinders. They will consider what problems there are with information from the criminal justice system or adult services being passed to children’s services, so that the children thus affected can be identified. Effective multi-agency teams working with a family will be based around a key worker, who can co-ordinate and communicate with the various services involved, whether for adults or for children.
The “Think Family” system change is required at all levels of local services, not just in identification and intervention, but in planning and commissioning. That perspective must suffuse service provision. A lot has been done through the children’s trusts to achieve joining up, but moving to a system with really close integration between adult and children’s services is also very important. That is why, building on the “Think Family” pathfinders, the youth crime action plan included a commitment to fund every local authority by 2011 to set up a crime prevention family intervention project alongside the “Think Family” reforms.
My hon. Friend rightly identified some of the excellent work in Sure Start children’s centres, where under-fives whose parents are in prison can be identified. The work going on there is important. It is often practical, for instance in helping families to make arrangements in preparation for a parent serving a sentence and to book visits and keep contact going. Of course, because of the work of the children’s centres, it also involves identifying the vulnerabilities of the infants and under-fives in families affected. I think that she mentioned the work done by the Fortune Park children’s centre, through its link with Holloway, in running classes there and so on.
I listened carefully to what my hon. Friend said about the initiatives that she would like in the criminal justice system: a much more routine and automatic flow of information into children’s services when a parent is imprisoned or held in custody, and an assessment at an appropriate time of the implications for the children. I will take it upon myself to ensure that I work with my colleagues in the Ministry of Justice to take that forward. I shall do so immediately today, by writing to them.
My hon. Friend has raised an extremely important issue, and I will take it forward. I look forward to talking further to her about it. I am aware that she has been selected to ask a question on the Floor of the House at 11.30 am, and she has asked me to finish a little early. Otherwise I would have said more, but I hope that you will allow me to conclude now, Mrs. Dean.
I am pleased to lead this afternoon’s debate on proposals for a British day. If I may say so, the debate is not before time. Almost every nation, country, territory and, indeed, people throughout the world is proud to celebrate its identity by establishing a special day of celebration, so why not the people who inhabit these great British islands? The idea of a day set aside for a celebration of Britain merits serious consideration and now is the right time to have this discussion.
If we were to establish such an occasion, 2012 would be the right time to do so, being the year of the diamond jubilee of Her Majesty the Queen. What a perfect year that would be to launch a British day. Let us have the debate; let us consider all the options, so that all British people can celebrate their identity with pride.
Much as I am a strong advocate of a British day celebration, I do not claim that the idea is mine alone. The Minister for the Cabinet Office stated:
“I think a clear majority of people support the idea of a national day of celebration”
and that it should be a
“celebration of what we like and love about living in this country.”
In addition, the Prime Minister himself stated, while he was serving as Chancellor of the Exchequer in January 2006, that we need
“a united shared sense of purpose”.
He argued in favour of having a national day, asking:
“What is our equivalent for a national celebration of who we are and what we stand for?”
In 2007, the then Secretary of State for Communities and Local Government, the right hon. Member for Bolton, West (Ruth Kelly), argued in favour of a British day, stating:
“The point of it would be to celebrate the contribution that we all make to society.”
Furthermore, it was a key recommendation of the citizenship review commissioned earlier this year by the Prime Minister, under the former Attorney-General, Lord Goldsmith. As recently as this year, the Prime Minister further encouraged these ideas, saying a national day would be
“a really good thing to do”.
Sitting suspended for a Division in the House.
Those words caught the imagination of much of the population and even television programmes dedicated hours to the concept. GMTV launched a week-long debate about a national day, the results of which were overwhelmingly positive. However, I am sad to say that the sentiment appears already to have been forgotten and carelessly cast aside by the Government. When I asked a question about the possibility of a national day for Britain, the answer I received was far from satisfactory. The Minister stated, disappointingly,
“there are no plans to introduce a national day at the present time.”—[Official Report, 21 October 2008; Vol. 481, c. 243W.]
That was hurriedly corrected by the Government, who stated that that was not what they meant and that plans had merely not yet come to fruition. We shall have to see.
Just to correct this point for the record, my written answer to the hon. Gentleman said exactly what has subsequently been said. There was no correction. If the hon. Gentleman reads what he has just said in the Hansard report of these proceedings, he will see that the two comments that he has mentioned are completely compatible; there is no contradiction between the two. There was no subsequent correction of that answer. That remains the exactly the position.
I represent the border constituency of Shrewsbury; my seat ends on the Welsh-English border. Since devolution, the Welsh Assembly is increasingly starting to introduce very different laws and legislation. My hon. Friend’s proposals for a British day would help us, on both sides of the border, to remember that, no matter what administrative differences we may have, we are all still one people and will be so for ever.
Indeed. I am grateful to my hon. Friend for making that important point. Under devolution, we have different administrative authorities, which makes it even more important that we celebrate our Britishness and do not allow the devolved Parliaments and Assemblies to downgrade the importance of being British. Representing a border constituency between Wales and England, my hon. Friend will know that it is even more important that we rekindle and focus on things that unite us and keep the British idea alive.
Sadly, it looks as though proposals for a national day have gone the same way as many other policies proposed by the Government; it has been quietly dropped into the quagmire. It seems that this proposal has fallen victim to Government procrastination and indecision. It would be fruitless to waste any more of the valuable time of hon. Members dissecting the Government’s lacklustre attitude towards this issue. I hope that we shall be reassured by the Minister at the end of the debate. Let us focus instead on what could be done if the political will allowed it.
What lies at the heart of the discussion is what it means to be British. We must examine what opportunities there are for all of us to celebrate a national day, as so many other countries do. We should begin by examining what happens in countries that share a similar culture and history. The obvious examples are New Zealand, which celebrates Waitangi day on 6 February, Australia, which celebrates Australia day on 26 January, and Canada, which proudly celebrates Canada day on 1 July every year.
Any celebration that we choose to adopt would naturally focus on everything that makes our country and the British people special and unique, recognising all that binds our people together by cherishing our history and traditions, our culture and way of life, our monarchy, royal family and constitution, our democracy and love of freedom and our natural tolerance and generosity.
A national day should be much broader than a celebration of only the United Kingdom. Instead, it must be an all-encompassing occasion for every person of British origin or ancestry, not only here in these islands but elsewhere in the world.
According to the British social attitudes survey only 3 per cent. of Scots now say that they are British and some 80 per cent. define themselves exclusively, or almost totally, as Scottish. If it became clear and apparent that Scotland wanted nothing to do with this British day, would the hon. Gentleman and his party just foist it on the people of Scotland?
I will come to that issue a little later on. I do not accept for a moment that the vast majority of people in Scotland want nothing to do with being British. People in Scotland are proud of being Scottish, and rightly so, as I am proud to be English. We have a dual identity. It is right that people in Scotland should celebrate being Scottish and celebrate St. Andrew’s day, as we do St. George’s day, but we are all British. We carry a British passport. Scots, English, Welsh and Northern Ireland citizens serve in Her Majesty’s armed forces. We have the same flag. We speak the same language, and our culture and our history are tied together. Anything that undermines that would be catastrophic for all British peoples.
We must include the whole of the United Kingdom, and we must consider our overseas territories and Crown dependencies, because they too are British. We must consider people in communities across the world that have been built by people from England, Scotland, Ireland—both north and south—and Wales who sailed the oceans to build new countries and whose descendents are, today, still immensely proud to call Britain the mother country. Such an occasion would also give expatriate communities and our armed services stationed abroad a focal point for celebrating their British identity in whatever corner of the globe they may be. We are a nation that loves to celebrate. The British people have so much to be proud of, especially our rich heritage and historical achievements.
Patriotism is a good thing. I am sure that we all remember that, in 2002, huge crowds turned out to celebrate Her Majesty the Queen’s golden jubilee and took part in the street parties and special events across the length and breadth of our nation and overseas. What a great occasion that was and how it lifted our spirits! I also remember that we were told in the run-up to the golden jubilee that it would be a flop and that people would not join in the celebration. However, as the Minister will recall, when the great day arrived, the crowds were there and the genuine jubilation was palpable for all to see and enjoy, including in Scotland.
The same can be said of the recent celebrations over the Ashes victory and the Olympic parades of this summer. Such sporting spectacles are a prime opportunity to observe the pride and patriotism that the British public possess in abundance. If further evidence were required, one need look no further than the annual fortnight of tennis mania that descends on our nation during the Wimbledon tennis championships every summer. Clearly, our people have a lot of passion for their country, and sporting events are often a vehicle for demonstrating that passion.
I congratulate the hon. Gentleman on securing this important debate. I am glad that he included the whole United Kingdom. He will be aware that the term “British” includes English, Scottish, Welsh and Northern Irish subjects, but he mentioned a Britain day, and Britain includes only England, Scotland and Wales. It is important to ensure at all times that Northern Ireland is included in any proposal, and I am sure that that is his intention.
I am delighted that the hon. Gentleman made that point. He is 100 per cent. correct, and that is the point of what I am saying. I am not talking about a United Kingdom day, because I want it to be a day that celebrates all things British. He is correct in saying that Britain is England, Scotland and Wales. Northern Ireland is not part of Britain, but it is part of the United Kingdom.
I have referred to the overseas territories and Crown dependencies, which are also British, but not constitutionally part of the United Kingdom. We should have a broader celebration for British people, whoever they are, wherever they are and whatever their ancestry, provided that they have links with Britain. It should be an all-encompassing celebration, and I would certainly ensure that it included the wonderful people of Northern Ireland who have been so loyal to Britain and the Crown over many centuries. They should certainly be included in any British celebration.
I referred to sporting events, and who could not feel proud of our country’s achievements when our victorious Great Britain Olympic team paraded through the streets of our capital, draped in the Union Jack and decked out in red, white and blue? Sport is only one area in which people’s respect for their country can be observed. An example of a more sombre and reflective occasion is Remembrance day, which is rightly held in great regard by all British people. One need only look at the success of the Royal British Legion’s poppy appeal to understand exactly how much people respect our history and those who put their lives on the line to defend our way of life. Only yesterday, when I and many hon. Members were standing close by the Cenotaph in Whitehall at 11 o’clock, I could not help being moved by the sight of the large crowds who had come to pay their respects to those who laid down their lives for Queen or King and country.
Clearly, we are a people who are justifiably happy to celebrate our nationhood, and I doubt whether it will surprise hon. Members that we are not alone in that. The sentiments of pride and patriotism that people in this country have are echoed around the globe. Almost every country in the world has a day set aside to allow its people to celebrate its own unique culture, history and traditions. This week alone marks the national days of countries as diverse as Angola, Cambodia, Burma and northern Cyprus. Last week, there were celebrations in Dominica, Micronesia and Panama, and there are national days next week in Latvia, Monaco and Oman. Everyone has a special day set aside to celebrate their national identity, except the people of Britain. The people of all nations have a desire to celebrate their identity, and we, too, deserve to be given the opportunity to display our pride in who we are and what British values truly represent.
I want to ensure that the purpose of my argument is not misunderstood. I am not proposing a new public holiday, a day off work or anything in that vein. That is a secondary discussion, which may take place, but not today. I am raising the principle of a British day of celebration, and I hope to spark a debate on the subject, eventually leading to a decision by the Government. The concept, whatever form it takes, should be a fluid and organic process. It should evolve from the grass roots, where individuals, families, organisations, schools, Churches and faith groups, clubs and communities come together to celebrate those things that they consider most important to them and central to their Britishness. After all, one of the best things about being British is our richly diverse people. Britishness should not be redesigned or relaunched by Whitehall or the Department for Culture, Media and Sport, or any other Department, but should be something that lives in all our hearts.
For people from the Shetland islands to the Isles of Scilly, Anglesey to Ayrshire, Dundee to Devon, Swansea to Southampton, Londonderry to Lincolnshire, Yorkshire to Yeovil, in each and every one of our historic counties and cities, and in all our territories across the seas from the Isle of Man to the Channel Islands, and from the Falkland Islands to Gibraltar, Montserrat to St. Helena, Pitcairn to Bermuda, as well as in lands far away where people can proudly trace their British ancestry, such as Australia, New Zealand and Canada, the islands of the Caribbean, parts of Africa, India and Hong Kong, and very far away places such as Norfolk Island, where people have a deep-rooted link to Britain and still sing “God Save the Queen”, even today, and not forgetting communities of Brits who live, work and serve in lands far and wide, this will be an opportunity to join in celebrating all that is British. It should be not simply a United Kingdom day, but a day for all those who identify themselves as British and want to acknowledge and celebrate their treasured identity.
What could be the focal point of this celebration of our Britishness? The concept should stay with us throughout the year, but a good time to celebrate would be around the weekend of Her Majesty’s the Queen’s official birthday in the middle of June. The Sunday following the trooping the colour ceremony could be named Britannia day, with a national service of thanksgiving held in a different city every year and with churches holding similar special services throughout the country and elsewhere around the world where British communities and those of British descent live and work.
Special activities, events and celebrations could be encouraged on that day in villages, towns, cities, islands and counties throughout our green and pleasant land with voluntary organisations, churches, youth groups and sports clubs organising their own unique events based on a British theme. Local authorities and public services could also play an important part in facilitating those celebrations. Schools could lay the ground for what I hope would be a spectacular weekend of parties, pageantry and patriotism by giving pupils a greater understanding of the importance of celebrating both the Queen’s official birthday and the new day for Britain. There are all sorts of possibilities for a Britannia day with activities all over the country. I believe that it would be a magnificent weekend that would strengthen and reaffirm our sense of Britishness.
It is a privilege to have this debate today, because the issue is important and needs to be addressed if we are to prevent British traditions and identity from being eroded or even hijacked. In recent years, the number of people who identify themselves primarily as British has declined. Instead, more and more people are arguing that their identity of Scottish, Welsh or English takes precedence over the notion of being British. In England, 39 per cent. of people said that they were British, which is down 9 per cent. from the previous year. In Scotland, as the hon. Member for Perth and North Perthshire (Pete Wishart) said, just 3 per cent. of people said that they considered themselves to be only or mainly British, which is down from 9 per cent. three years earlier. As I have said, I doubt whether that is really what they believe, but those are the figures in the survey.
According to John Curtice, who is professor of politics at Strathclyde university, the evidence shows that most people are still content to define themselves as having a dual nationality:
“There is no doubt that in Scotland and in Wales, national identity is ahead of British identity. In England, the two are in competition with each other. But in all three countries, a lot of people recognise both.”
The values of Britishness are clearly still very much alive and therefore vital to vast swathes of our population. However, we need to cement the bonds of our identity and it is important to give people legitimate opportunities to discuss and debate this important issue.
As I have said, a British day cannot be an occasion that is imposed from above. Individuals and communities within society as a whole must be the driving force. Support for our British identity is dependent upon the people coming together to share in their celebrations, and we must offer the guidance and support to create those opportunities. Empowerment is at the core of the issue; we should give people the power and ability to rejoice in themselves and in what they believe is important to the rich tapestry that makes up the great family of British people.
In an era when the notion of Britishness may appear to some to be ambiguous or even outdated, the core values of tolerance, respect, pride and patriotism, which form its foundations, live strong in the hearts and minds of the people of our nation. Most other countries acknowledge the need for such celebrations and celebrate their nations with immense pride, passion and enthusiasm; so should we. In so doing, we would give all our people the opportunity to celebrate all things British.
It is a great pleasure and privilege to take part in this debate. I congratulate the hon. Member for Romford (Andrew Rosindell) on obtaining it because, as he has eloquently stated, we should discuss this subject. I shall begin by daring to refer to the perhaps ill-chosen words of Anne Robinson, who famously said about Welsh people, “What are they for?” Hon. Members will be pleased to know that that is not a sentiment with which I agree. However, before we rubber-stamp British day in any shape or form, we should clearly establish what we want such a day for. As the hon. Gentleman said, we should not impose such a day from above in a uniform fashion.
I shall discuss some of the background to why the debate about a British day has been so interesting and important in recent years. I and members of the former Select Committee on Education and Skills, which conducted an inquiry on citizenship education, discovered that a significant number of people do not think that we should try to define or argue about Britishness. The hon. Member for Chesterfield (Paul Holmes), who is in the Chamber today, was present when that inquiry took place. Such people are concerned about what some people might conclude from such a debate. I remember having a vigorous discussion with the representative of the British Youth Council, who appeared before the Select Committee to talk about that issue.
I do not agree with the view that the matter should not be discussed—in fact, there are compelling reasons why we need to debate what it means to be British. Some of the issues relating to identity are shared globally by other countries and some specifically relate to the United Kingdom. Of course, these matters are related to—although they are not the same as—concerns that all hon. Members have had in recent years about participation in the electoral process, particularly by younger people.
Those concerns also relate to the changing nature of Britishness. That is a simple statement of fact; it is not something that we can say is a good or bad thing. The nature of Britishness has changed, particularly in the past 20 to 30 years. We are now a multi-ethnic, multi-faith society in a way that we were not, even 30 years ago. We live in a post-devolution Britain with all its intriguing complexities and tensions. Whether some Members like it or not, we live in a Britain that is intimately connected to the European Union. A new role and relationship for the monarchy is being carved out and debated. The heir to the throne is openly talking about whether he wishes to be defender of the faiths as opposed to simply defender of the faith of the Church of England. Incidentally, the wonderful historical fact that that wording was originally given to us by a Roman Catholic monarch is not often commented on.
On top of that, all hon. Members have a generalised concern about the sense of atomisation and the lack of social and community cohesion. As Trevor Phillips and others have pointed out, that is not just an issue that affects the new ethnic communities in the United Kingdom; it is a big issue that affects traditional white working-class communities as well, because a range of social and economic changes have taken place in past 20 to 30 years. In addition—this was one of the reasons why I pressed my colleagues on the Select Committee to carry out an inquiry on citizenship education—there has been ongoing soul searching about the implications of the events of 7/7 and what they mean in terms of the need for us actively to strengthen a sense of community cohesion.
A range of factors have propelled the issue of Britishness to the fore. I pay tribute to the Government and, indeed, to the Minister here today, who has taken a leading part in the process, for recognising that and taking forward the subject for discussion. The hon. Member for Romford referred to comments the Prime Minister made in 2006 when he was Chancellor. I was privileged to be present at the Fabian Society seminar, in which he made various comments, and I shall quote from those later.
In addition to the Select Committee inquiry, Lord Goldsmith has carried out a citizenship review and, importantly, within the former Department of Education and Skills, a report was published by Keith Ajegbo. That report discusses some important points about how, if we are to talk about how we became the sort of people we are today, we must do so in a broad and pluralistic way. In his report, Ajegbo echoed what we said in our Select Committee report when we talked about how the sense of Britishness or arguments about Britishness should be covered. Our report states:
“Such coverage should rightly touch on what is distinctive in the inheritance and experience of contemporary Britain and the values of our society today. But it should not be taken to imply an endorsement of any single explanation of British values or history. Indeed, it should emphasise the way in which those values connect to universal human rights, and recognise that critical and divergent perspectives, as well as the potential to have alternative and different layers of identity, are a central part of what contemporary Britishness is.”
Again, I agree with the hon. Gentleman’s comments that celebrations of Britishness or a British day cannot be imposed from the top down. Governments might provide a framework—whether it is a public holiday or not—but the celebrations cannot be imposed from the top down. I would not want to see that done from the top down, because the sense of citizenship or Britishness—the two are not entirely interchangeable—is learned best when learned in the community, through voluntary activities, schools and discussion. We may want to have a set of symbols and values that cement those discussions, but the impetus should always come from below.
Some of the most interesting discussions that I have had on the question of citizenship, which I took forward after our Select Committee inquiry and which related to the subject of Britishness, have been in my local schools and colleges in Blackpool, where I have talked to large numbers of young people about their sense of identity. What I have learned from that, and what I am sure many other hon. Members who have delved into this issue in their constituencies have learned, is that people often find their sense of identity through engaging first with their local communities—through their families and extended relationships. They then relate that to the broader regional or national identities with which they choose to identify themselves. If we are to have a Britishness day, there are a number of different levels at which we need to think about that and how to celebrate it. There is that extraordinarily successful television programme “Who Do You Think You Are?”, which incidentally Keith Ajegbo said we should try to replicate in terms of activities at least once a year in this country. We can see that that is a key motor for this debate.
There is no single form of Britishness. Let us consider how Britishness was defined historically. As Linda Colley and various other historians have said, it was defined often in antagonistic ways—I am thinking of the Acts of Union of 1707 and 1801. Englishness has often been defined against other things. In the middle ages, we defined ourselves, I am sad to say, initially against the Scots, the Irish and the Welsh. We subsequently defined ourselves against the French and ultimately against the Spanish. That was associated with the myth of divine providence:
“God blew and they were scattered”,
as it said on the armada medal. Englishness, liberty and Protestantism were the holy trinity that took Englishness forward in the 16th and 17th centuries. It was only later that the Scots and the Irish were co-opted into Britishness as part of the project of imperial expansion. I am not saying that we should repudiate that. I mention it merely to underline the fact that Britishness and the sense of Britishness has always been a process of constant reinvention. If we are to have a British day or a Britain day, it must be a pluralistic day and recognise the inheritances of all the people who now live in this United Kingdom today.
When the Prime Minister spoke at the Fabian Society seminar, he quoted George Orwell and talked about how George Orwell—I agree entirely with him—ridiculed the old left for its attitudes towards patriotism. Orwell said something very important about patriotism: he said that the difference between patriotism and nationalism was that a nationalist was someone who thought his country was always better than anybody else’s, whereas a patriot was someone who loved his country and who, because he loved his country or she loved her country, could understand how other people could love their countries. I would not want to see any celebration of Britishness that did not take that into account.
We have too many examples in our history of mountebanks who have taken Samuel Johnson at his word—he famously pronounced:
“Patriotism is the last refuge of a scoundrel.”
One thinks on this occasion—the 90th anniversary of the end of the first world war—of Horatio Bottomley and his famous set of tricks with John Bull, which ultimately put him in prison. In the famous story, the Home Secretary came in, saw him sewing mailbags and said, “Ah, Bottomley—sewing?” and he said, “No, Home Secretary, reaping.” I do not want us to reap, in the things that we might do for a Britishness day, things that would give succour to people in the British National party and elsewhere who would sow division and hatred. If we are to have a Britishness day, we have to take on board all those issues.
The sense of community is something that we would want to press. I am attracted by the ideas proposed for a community day by the National Council for Voluntary Organisations, the TUC and the National Association for Voluntary and Community Action. Many of the things that the hon. Member for Romford talked about could be incorporated in that. If people want to call it a Britishness day as well, all well and good. I come from a seaside town, where we rely quite heavily on half-term visitors, and it would be nice to have an extra public holiday at about that time of year that would increase our visitor numbers. I mean that seriously.
My right hon. Friend the Member for Birkenhead (Mr. Field) has talked about associating such a day with Remembrance day, and I can see the advantages in that. Anyone who laid a wreath last weekend could not fail to be moved by the fact that that is a core part of our Britishness. The essential point about a Britishness day is that whatever it is, whatever we do and whatever we associate it with, it should energise and celebrate, not divide.
I, too, congratulate the hon. Member for Romford (Andrew Rosindell), right down to his Union Jack cotton socks, on securing the debate. I half expected to see the Union Jack come billowing out and to hear the strains of “Rule, Britannia!” as he was delivering his speech. I recognise his passion for the subject, but it will come as no great surprise to him that I do not share his passion for a Britishness day. That is true of the vast majority of Scottish people.
It has already been said twice, by the hon. Gentleman and by me, that only 3 per cent. of Scots now recognise themselves as British. Some 80 per cent. consider themselves exclusively Scottish, or perhaps partly British with that. That is not a very good place from which to start a debate such as this, especially when Scotland is such a large constituent part of his Britain. If such a day is not wanted, that should be respected. I hope that there would be no attempt to foist it on the people of Scotland, especially as it would not work. The fact is that since the Scottish Parliament was established, the idea of Britishness has started to wane from the psyche of Scottish people, and as Scotland moves forward to become a normal independent nation, all vestiges of Britishness will go.
However, the hon. Gentleman is right in one respect: we have to celebrate what unites us and what binds us. That is why we in Scotland have St. Andrew’s day and Burns night. Next year—2009—will be the international year of homecoming in Scotland. We will appeal to our diaspora around the world to come back to Scotland and attend one of the mass of significant events that we hold in Scotland. We will do more than that: we will make a plea for people to come back and stay in Scotland, to contribute to our national culture and economy. That is the type of thing that we want to do and the type of agenda that we have in place—to unite around what binds us historically, culturally and through our heritage. That is the way to do it.
I encourage the hon. Gentleman to stop thinking about Britishness day. What is wrong with Englishness day? I see a rise in a good, positive Englishness, which has been reclaimed. I very much welcome that. The day that the Union Jack comes down off this House and the St. George’s Cross goes up is the day that our two nations will have arrived at a 21st-century relationship. I very much look forward to that day.
We have heard much about Britishness today. I have never felt British in my life. There are occasional pangs when you see Team GB in the Olympics and you are bombarded with Britishness, Britishness, Britishness by the BBC, but I have never felt British in my life. I do not even know what Britishness is. I know what Scottishness is; I know all the things that define me as a Scot. I know what Englishness is. I can see that clearly when I study some of the great events in English history. I have no idea what Britishness is. I look forward to hearing someone’s description of it. I listened carefully to the hon. Member for Romford and to the very considered remarks of the hon. Member for Blackpool, South (Mr. Marsden), but I am no clearer on what Britishness means.
I do not think that the British people know what Britishness is, either. Last year, the BBC did an exercise in which it asked its listeners to decide what day should be Britishness day. Thousands upon thousands of the British people replied to that. I was quite surprised. The day that they decided on for a national British day holiday, by an overwhelming majority, was the day on which the Magna Carta was signed. The Magna Carta is a significant historical document, but it is not a British significant historical document. It was signed in June 1215—492 years before there was even a sense of Britain, with the signing of the treaty of Union in 1707, so the British people do not even know what Britishness is. That is where we are in the debate. At the time of Magna Carta, we were still knocking lumps out of each other in the Scottish wars of independence, so I would suggest that that is not an auspicious date on which to celebrate Britishness day. There we have it. We must recognise that there is a difficulty in understanding and appreciating what Britishness is.
Of course, people will want to foist this day upon us. As the hon. Member for Romford noted, the idea of a Britishness day holiday was suggested by the Prime Minister. He did not arrive at that idea through some sort of altruistic design, or because he wanted to give us an extra holiday and celebrate Britishness around the nation. He put forward the idea of a Britishness day because he is a Scottish Prime Minister representing a Scottish constituency. We now have a Scottish Parliament, and the Prime Minister recognises that there is a problem. He is aware of the agenda of the right-wing press—the Daily Mail, the Daily Express and, it must be said, some Conservative party members—which thinks that it is totally wrong for a Scottish Prime Minister to be in charge of the United Kingdom. We have all seen the comments about what the Daily Mail and the Daily Express usually describe as the “ruling Scottish elite.”
The Prime Minister had to address that issue because it was a problem for him in terms of being accepted by the vast majority of voters in the UK. Therefore, he came up with the idea of Britishness, by wrapping himself in the Union flag and saying that his favourite sporting moment was when Gazza scored that goal for England against Scotland. He had to do that to try to impress on the people of England that he would be Prime Minister for the whole United Kingdom.
I am grateful to the hon. Gentleman for giving way. Having watched that goal, I ask him to reflect on the suggestion that the Prime Minister might have selected it simply because it was one of the most miraculous goals ever scored.
I do not know what goes on the Prime Minister’s head, but when he made that comment, the tartan army and all Scottish football supporters baulked at the suggestion. The Prime Minister may have been impressed by the goal, but it was not a clever thing to say in terms of his support for the Scottish national team. We are having this debate not because of any great desire within the political class to have a Britishness day, but because this is a problem that the Prime Minister wishes to resolve.
I believe that there should be a proper relationship between England and Scotland, but the way to do that is not by having a Britishness day. I want to celebrate my national days in my country. That is right and proper and there would be big problems if a Britishness day were to be imposed upon the Scottish people. The English should celebrate St. George’s day.
My last point is about what unites Scotland, England and the rest of the United Kingdom—the social union. That is important and we must recognise it. We need a proper, mature relationship between England and Scotland that reflects and respects our 300-year journey. I have time for that and I have full respect for fellow Scots who still refer to themselves as British—that is fine and totally legitimate. We have a shared social union that has carried on for 300 years, but we do not have political constitutional arrangements in place to reflect it properly. That is what we should be moving towards.
Is that not exactly what I said earlier? Any proposal for a British day—whatever it is to be called—would not be a United Kingdom day but would encompass all people from the British isles and all those descended from the people of these islands, wherever they live in the world. I understand that the hon. Gentleman does not agree with the concept of the United Kingdom, but should he not separate that from the idea that all of us, himself included, are people who come from the British isles? Surely he can see the difference.
The hon. Gentleman is on steadier ground with that proposal and I have no great problems with it.
There is a great social union between Scotland and the rest of the United Kingdom, particularly England. However, I disagree with the idea that we should suddenly put out the Union flags. I say candidly to the hon. Gentleman that the Union flag barely exists in Scotland any more. There is an obligation for some councils and Government buildings to display the Union flag, but otherwise, it is never used voluntarily. If the hon. Gentleman is ever in Scotland he will see that.
We must ensure that the social union is remembered and factored into the relationship between our two nations. A Britishness day will not achieve that. We must move our two nations towards mutual self-respect and a new constitutional arrangement that reflects the aspirations of both our nations. That is the way to foster good relations between our two countries.
I add my congratulations to the hon. Member for Romford (Andrew Rosindell) on securing this timely debate. For the past two years, I have been involved in this issue on behalf of one of my constituents, Bruno Peak, who is passionate about bringing about a Great British weekend, rather than just a day. Both he and I have met with the Prime Minister’s advisers and with my right hon. Friend the Member for Birmingham, Hodge Hill (Mr. Byrne), when he was Immigration Minister. This idea could capture the imagination of a lot of people.
Many comments have been made today extolling the virtues of the past and stating why we should celebrate Britishness—except obviously for those made by the hon. Member for Perth and North Perthshire (Pete Wishart). I would like to concentrate on a comment made by the hon. Member for Romford when he mentioned the idea of a weekend. We can talk about whether that should be in June or at a different time—that is up for debate. However, we must first clarify whether the Government like the idea of celebrating a Great British day—or indeed weekend—and will push forward with it.
A document has been presented to the Government by my friend and constituent Bruno Peak. I shall read some extracts from it that extol the virtues of having a Great British weekend and promote the view that such an event would help in other areas:
“It is widely recognised that local and regional events involving the community can act as a catalyst for economic development and urban regeneration that generates positive effects on tourism, infrastructure and city-town renovation. Such events also contribute to social benefits variously called psychic benefits, community self worth, civic pride and quality of life. This applies especially to national holidays and the celebration of historic events, such as the Trafalgar weekend of 21st to 23rd October 2005, when the nation commemorated the 200th anniversary of Nelson’s victory over the French in 1805.”
It goes on to mention the Queen’s golden jubilee weekend in June 2002 and the millennium celebrations in 2000, both of which Bruno Peak was heavily involved in organising. The document continues:
“The Great British weekend could be held over any weekend to make the most of the celebrations, the social and commercial opportunities they offer, as well as assisting the tourism industry. Individuals and families would use this opportunity to invite family and friends from around the UK and the world to attend their events. Local authorities twinned with towns and cities abroad could ask representatives from them to join their festivities over this weekend or day. If the celebration worked well and received ‘good press’, it may well build in the long term and generate benefit by getting some outbound visits replaced with domestic breaks, through visiting friends and relations traffic, as ex-pats come home, with friends and family of other nationals living in Britain coming to visit.
Over a number of years, the Great British day or weekend could boost inbound spending by up to l per cent. and reduce outbound spending by 1 per cent.”
That would equate to UK plc receiving about £18 million more from inbound visitors, with a potential £46 million from domestic residents spending their money inside the UK rather than overseas. It could therefore provide an overall boost to the economy of up to £64 million. At this time, that would be a welcome boost to many places in the country, certainly seaside resorts such as that represented by my hon. Friend the Member for Blackpool, South (Mr. Marsden), and my own constituency of Great Yarmouth.
The document continues by saying that the Great British day, or weekend, would become
“an annual event and the biggest weekend of celebration the nation has ever undertaken. The event would have a wider impact on the community in enhancing the accumulation of social capital than any other public holiday. Indeed, the Great British weekend and its thousands of associated events would provide an ideal opportunity to strengthen individual social ties to friends and families and to fellow British citizens.
Many studies recognise the benefits of public holidays both in terms of economic and non-economic pay offs. For instance, public holidays generate benefits in well-being and on leisure because it is a time when most people can enjoy things together. Leisure time is very important and can help enhance family life, especially if they also have the opportunity of meeting up with family and friends on an annual basis.
The Great British Weekend would encourage civic celebrations and events throughout the whole of the British isles. “People would attend these events with family and friends. For those who choose not to attend public events, large numbers of them will spend the day with their families and friends.
The Great British Weekend would provide the opportunity for people to get together, to keep in touch, and increase the time and frequency they spend with others within and across their social networks, thus strengthening the quality and bonding of family life. The celebrations over The Great British Weekend would not only include community events over the three days but would bring together a large number of voluntary organisations and workers and associations from different social and economic backgrounds to prepare, implement and manage events.
Participation in such unpaid voluntary work is a significant indicator of social capital and the involvement in voluntary activities and associations also has a positive impact on the accumulation of social capital. Indeed, such groups and associations function as 'schools of democracy', in which co-operative values and trust, are easily diffused. This is because participation in voluntary activities increases face-to-face interactions and helps to create a setting for the development of trust, which is so important in the world we live today. Consequently, voluntary engagement contributes to the building of a society in which cooperation is facilitated.
Many citizenship ceremonies and the announcement of the winners of the UK Citizen of the Year Awards could take place over the Weekend. These ceremonies and events would boost civic pride amongst participants, enabling them to share the common social norms and attitudes toward the nation and providing them with a sense of civic pride and belonging to the community they come from, and will be living in, once they become a British Citizen.
By attending, and being involved in the organising of events over The Great British Weekend, people are informed about and will feel part of being British, sharing the common social norms and attitudes toward the nation and obtaining a sense of belonging to the community.
Well-informed citizens have a better knowledge of public affairs, laws and practices of the country they are living in, giving them a greater confidence in their ability to influence public choices. The loss of the sense of community and a lack of belonging generates negative attitudes by individuals and groups towards their nation.”
All in all, the idea of a British day or weekend is excellent. It is one that the Government should embrace, despite some of the views that have been expressed today. We heard that only 3 per cent. of people in Scotland feel British; I believe that we have to get back the British identity, so that people know that we are a united and unified country. Other countries were extolled by the hon. Member for Romford for celebrating national days. I believe that we should move with all haste, perhaps in 2012. The Government need to make a move.
I congratulate the hon. Member for Romford (Andrew Rosindell) on securing the debate. It was been most interesting, especially for me, as I was an historian in a previous career before being elected to Parliament.
The hon. Gentleman identified a number of key points for a national day that resulted from the recommendations of the citizenship review. Indeed, countries such as New Zealand, Australia, Canada and a string of others have such a day. At the heart of the discussion that he said was necessary is what it means to be British, and I shall return to that question.
Among the things offered by the hon. Gentleman as definitions of Britishness included sport—the Ashes, the Olympics and Wimbledon. However, although the TV schedules would lead us to think so, not everyone is fixated on sport. Remembrance day and the monarchy were other suggestions, and I shall return to those.
The hon. Member for Blackpool, South (Mr. Marsden), a former colleague on the Select Committee on Education and Skills, was an historian—he had a proper job before becoming a Member of Parliament. He offered a thoughtful and erudite contribution, as I would expect from an historian. In particular, he pointed out that any such event would not have to be imposed from the top and be not a divisive but a pluralistic event that recognised the complexities of British society and the various mixtures that make it up. Otherwise, it could be counter-productive and against our intentions.
We heard a plea for Scottish independence and the separation of the two nations, although I am not sure what the Welsh or the Scots think about being lumped in like that. We also heard a good exposition of the fallacy that something such as Magna Carta, which came top of the poll, was a defining British event. However, it was nothing to do with Great Britain or the United Kingdom, or any of the other tags or descriptions; it long predated the appearance of such a political unit.
We historians could make a long argument about Magna Carta being an important event, but much of it is symbolism. As I used to tell my classes, at the end of every part of Magna Carta—when dealing with the freedom of the individual and saying that the Englishman’s home was his castle—it should have had a few words in parenthesis saying, “but not if you are poor” and “if you are a peasant, this does not apply to you.” We can analyse these great historical events, and come up with all sorts of interpretations. We also heard an appeal for a great British weekend or something similar to boost tourism, at the same time as developing the idea of Britishness.
How do we define Britishness? We heard that the national groups—the English, the Welsh, the Scots, the Irish and the Northern Irish—have distinct approaches and attitudes to sport, as to everything else. However, more recent groups now form part of our society.
In Sheffield, where I grew up, and in Derbyshire, where I have lived for 30 years, and also in Lincolnshire, Poles and other eastern Europeans have a strong presence. They first came here at the start of the second world war. Indeed, members of the Polish Parachute Regiment trained at Hardwick hall just outside Chesterfield. They were based in Lincolnshire before flying to participate in battles such as Arnhem. Many of them settled and married locally. After the war, we had an influx of Poles and eastern European refugees fleeing Soviet dictatorship in eastern Europe. Many came to places such as Sheffield, Derbyshire and Lincolnshire because they had contacts among those who were in the armed forces during the war.
We have other groups. Sheffield and Chesterfield have people from the Caribbean and the Asian subcontinent, formerly parts of the British empire. The recruiting message after the second world war—a junior Minister by the name of Enoch Powell was involved—was that those who had fought for the mother country in the greatest war, the war to end all wars, should now come to work for the mother country. They were invited and encouraged to work in the national health service, British transport, the steel works in Sheffield and other jobs across the board. Those people all form parts of our culture and our Britishness. We cannot divide the nation into English, Welsh, Scottish and Irish.
What events or characteristics should we choose for the British day or the British weekend? A number of things have been suggested. We heard that a number of former colonies, including Angola, have a national day. However, those countries are recently independent; they were born and achieved independence on a specific day, and it was often the result of bloody contests and struggles. They have a clear recent event that can be treated as their national day—the start of their nation. For many, the event is within living memory. That is clear cut.
We heard of countries that became independent in rather happier circumstances. I think of New Zealand, Canada and Australia. Those countries have a clear-cut event, but do we have a similar event to lock on to for Britishness? As an historian, I wonder whether we should go back to the first unification of the British tribes, when the Romans conquered the country. Should we go back to the conquest of Romano-Britain by the Anglo-Saxons from Denmark and Germany?
We should not make things too complicated. If the hon. Gentleman were to check, he would discover that most embassies and high commissions have national day celebrations to which local people are invited. They always use the Queen’s birthday weekend as a British day. I suggested that we could consider many days, but why not stick to that weekend? We already have the great pageant of trooping the colour on the Queen’s birthday. Sticking to that weekend would make things simple, and we would not get bogged down in a multitude of options that would cause conflict and argument.
I thank the hon. Gentleman for that observation. I have two comments. First, as has been suggested by a number of hon. Members, this is more complex than simply rallying around a royal day or a day for the monarchy. It has to be more pluralistic and representative than that.
As an historian, I spent many years teaching A-level students in particular, but also younger pupils, to beware people bearing false facts and saying, “Well, it’s as simple as this—and there are no other views.” As we have heard, there are many different views about history, nationhood, Britishness and so on. Should we look to the Vikings who part-conquered the country but left a very strong trace in the DNA of people in Scotland, the north of England, including Yorkshire, and in coastal areas? Should we look to the Normans, who conquered us in 1066? Should we look to 1649 and the end of seven years of civil war, when parliamentary democracy triumphed over an attempt to impose a dictatorial, absolute monarchy? That was an important event in British history. Should we look to the 11 years of the republic that followed the civil war, or to 1660 and the restoration of the monarchy? We all have different opinions. History is not a nice, neat, simple, linear process ending at a point that everyone agrees on.
Should we look to the Glorious Revolution of 1688? Again, that is not so simple. The revolution was glorious, because it avoided another seven years of civil war, such as the one from 1642 to 1649, but it was not quite so glorious in Ireland, where all the conflict and fighting took place culminating in the battle of the Boyne. However, it was glorious on the mainland, because we got away with almost no casualties. Near Chesterfield is Revolution house, which at the time was a small remote cottage on the moorlands, where the Duke of Devonshire and others plotted their illegal rebellion against the legal King of England to replace him with a Dutchman, William of Orange, who then fought his battles with a Dutch army against a mainly French army at the battle of the Boyne in Ireland. History is a bit more complicated than simple labels, such as “the Glorious Revolution”.
Should we go for the traditional drum-and-trumpet history that the Victorians espoused and look to great battles, such as Trafalgar and Waterloo? Those are slightly further back in history now and so perhaps not quite relevant enough to be national unifying events. Should we use traditional events, such as the signing of the Magna Carta and the Glorious Revolution, which we have already mentioned, or the Bill of Rights of 1689, which we desperately need to update? On the other hand, some people say that we should celebrate things such as the Chartists and suffragettes, who brought democracy from 2, 3 or 4 per cent. of rich landowning men to the whole population, regardless of wealth or sex. That was probably the most important step in British history.
The USA was not mentioned in the list of countries with national days, because as one of the most patriotic countries in the world—admirably so in many ways—it does not need a single national day. It recognises that it has a very mixed community. Consider the events that it does have: the third Monday in January marks the birth of Martin Luther King; the third Monday in February marks the birth of George Washington, although it is more generally known as President’s day; the last Monday in May is memorial day, which started with decorating the graves of civil war casualties; and the fourth day of July is independence day. However, as the Americans fully recognise—the election of President-elect Obama perhaps sets the seal on this—the glorious independence day and the declaration of independence, which said that all men are born equal, should have had “unless you happen to be non-white or female” in brackets at the end. In that respect, it is similar to the Magna Carta. But things have moved on. The Americans also have labour day, which is rather like our May day, Columbus day, veterans day and thanksgiving day. They have a sequence of events celebrating different seminal events in the development of that great multiracial, multinational nation that is the USA. Perhaps we could learn something from that.
At lunch time, I had the great pleasure of spending an hour and a half in the company of 14 soldiers from 3 Para, who are just back from a tour of duty in Helmand province. I told them about this debate and asked them what they thought about a Britishness day. I spoke to them in two or three small groups. The first response was, “Yes”, but almost immediately they started saying, “But what would it be?” They said, “We should certainly have a St. George’s day, because the Welsh, the Scottish and Irish have their national days, but we in England do not have that.” Then they said that we should focus on a national day that would be unifying and all-embracing, rather than divisive and separate. They suggested a national day centred around Veterans day or Remembrance day. Yesterday, France and the USA celebrated their veterans days.
We have Remembrance day. I attended two very moving Remembrance day ceremonies in Chesterfield and Staveley. Such ceremonies are seeing record attendances. After all the fears a few years ago that as old soldiers die out people would stop attending Remembrance day events, the crowds are getting bigger, certainly in Chesterfield and Staveley. The latter one was a record—they could not fit everybody into the church, which has never happened before, certainly not since VE-day. Some 500,000 people have signed a Downing street petition saying that we should have a national day focused around Remembrance day or Veterans day. Such events could be much more unifying and would include the English, Scots, Welsh and Northern Irish, who all fought in various wars for this country.
Such a day would also include more recent participants and immigrants, such as Fijians, one of whom was a recent winner of the Victoria cross for fighting in the British Army. The Gurkhas and other such groups would all be included as well. Let us consider the unremembered history. Earlier this year, in Delhi, I saw a huge memorial to the Indians who fought with the British armed forces in France in world war one and world war two. Such a national day would be all-embracing, not divisive, nor would it fall foul of different national divisions and racial groupings.
Finally, would such a day fall on a bank holiday or a weekend? The hon. Member for Romford said that that is a debate for another time, which is fair enough. However, we have fewer bank holidays than the rest of the Europe. I cannot help but think that if we said to the British public, “This is so important that we should have a national day, but not so important that we want to roll it into one of your weekends,” they might feel a bit short changed.
I sincerely congratulate my hon. Friend the Member for Romford (Andrew Rosindell) on introducing this important debate. As usual, with his brilliant patriotic fervour, he has given us many of the reasons we want to celebrate our Britishness. As ever, I agree with him, and I am pleased that thousands of people in Romford also agree with him—the Union Jack is certainly to be seen there.
If one thing comes out of this debate, it is that Britishness means different things to different people—that applies to everyone not only in this Chamber, but in the country. Clearly, it is impossible to define how we should celebrate Britain and Britishness. The hon. Member for Chesterfield (Paul Holmes) illustrated that very well indeed. Being British does not have to be the same for every Briton. Surely, the essence of being British is that we are free, diverse and individuals. We live in a free country and are free to be whatever we want. That is the freedom that we have fought for, and it includes the freedom to decide how we wish to be patriotic.
We could mark our national pride in many ways. As Members have said, there is St. Andrew’s day, St David’s day, St. Patrick’s day and St. George’s day. During the Queen’s birthday, the jubilee and other celebrations we focus on the royal family—not the people, but the institution that they embody. That is the focus of our national celebrations.
Then, of course, there are the sporting events, when we all become fervently concerned to celebrate our team, whoever they might and at whatever time. Just about the only thing on which I and the hon. Member for Perth and North Perthshire (Pete Wishart) will probably ever agree is that the Calcutta cup at Murrayfield on 8 March was a great day—for those who do not understand, we shall leave it at that. At sporting events, we are passionate about who we are and what team we are part of, be it Scotland, England, Northern Ireland, Wales, Britain or the Commonwealth. The same applies to party, family, town and village. We feel part of a whole. That is what makes humans such social creatures.
When we try to define how we should celebrate our Britishness, it becomes difficult. The last night of the proms is a brilliant celebration of Britishness in all its forms. The right hon. Member for Barking (Margaret Hodge) disagreed with me, and it is her right to do so. It is more important that the right hon. Lady and I can fervently disagree on such an issue than that we should be made to agree and to appreciate the same angle on Britishness.
It occurred to me yesterday, as we were observing the two-minute silence, that almost everyone in Britain, and British people throughout the world, were, at that very moment, celebrating the freedom that millions and millions of people have died for over the centuries. Appreciating and celebrating freedom is what brings us together as British people. It is very good that we are having this debate today, because I believe that yesterday at 11 o’clock was the point at which the nation came together. People came together not just to remember the dead but to celebrate freedom, and what generations had fought for.
I want to be brief because I want to give the Minister enough time to reply to this excellent debate. Although he has not made any silly speeches about Britishness, some of his colleagues have. Some have come forward with gimmicks about Britishness and why it matters, which undermines the whole concept of Britishness. I want to ensure that the Minister has time to dispel our fears about his colleagues and give us a lead as to what the Government are thinking in that respect. I am sure that he will not come forward with any more gimmicks.
I agreed with the hon. Member for Blackpool, South (Mr. Marsden) when he quoted George Orwell on the definitions of nationalism and patriotism. Orwell was right, and it is patriotism that we are discussing, not nationalism. I remind the Chamber that when the BBC conducted a poll about who is the greatest Briton of all time—many people participated in the poll—the person who won was Winston Churchill. It did not matter whether he was Scottish, English, Irish, Welsh, from New Zealand, or Australia; he was the man who led our country against the greatest threat in recent times to our freedom. That brings us back to the issue of freedom. People voted for Winston Churchill not because he was Conservative, English or an Edwardian gentleman, but because he led us against the common enemy who threatened freedom That is what matters.
I am sorry that the hon. Member for Perth and North Perthshire has no idea what it is to be British. I respect his position and I know that he means it, but it is a pity that he does not understand it. I have to remind him that although he and his party have a certain view, less than 50 per cent. of the people of Scotland voted for the Scottish National party and against the idea of Britain when they had the chance to do so. Now that they have a Scottish national Government, even more of them will vote for the Union and not for separatism.
Obviously the hon. Lady is not aware of the remarks made by the Leader of the Opposition when he came to Glasgow on Friday. He acknowledged quite candidly some of the problems with the Union. In referring to Britishness day, he said that he was totally opposed to any mechanical solution to the problem.
My right hon. Friend the Leader of the Opposition is a fervent Unionist. It is one of the best things about him. He made a very good speech in Glasgow and has made many such speeches. He is not jingoistic about Britishness, and he respects what it is to be Scottish—perhaps not at the Calcutta cup but at other times—and that is very important as we take our whole country forward.
As I said, what is important is the fact that we are a free people, that we are individuals, and that our freedom has been fought for and defended over the centuries. It is everyone, and not just the white middle-class men of Britain, who live in a free, equal and fair society. That is what we have to celebrate in being British. I congratulate my hon. Friend the Member for Romford for bringing the matter to our attention—not just today, but every day.
I, too, add my congratulations to the hon. Member for Romford (Andrew Rosindell) on securing this important debate and on his passionate celebration of what it means to be British. We heard important and thoughtful contributions from my hon. Friends the Members for Blackpool, South (Mr. Marsden) and for Great Yarmouth (Mr. Wright) and the hon. Member for Chesterfield (Paul Holmes), who carefully set out some of the issues to do with the definition of being British, and we heard a strong exposition of Scottish nationalism from the hon. Member for Perth and North Perthshire (Pete Wishart). Finally, we heard a very deft analysis of the importance of being British from the hon. Member for Epping Forest (Mrs. Laing).
This has been an exciting and stimulating debate. It has been vigorous, diverse, pluralist and tolerant. In other words, it has been quintessentially British. I want to talk about the matter on two levels. Before I come to the question of the British day itself, I want to talk a bit about the principles that underpin it. It is important that we understand why the matter is so important, and why the hon. Member for Romford should be congratulated on bringing it forward.
Our national identity matters. It is crucial to our sense of belonging. The sense of who we are runs through so many of the great issues that we confront as a nation. More than our national identity, it is our British identity that is important. It really matters.
As an institution, the Union is crucial to shaping and defining so much of what is important about residing in these islands. Over hundreds of years, the Union of nations—no matter what its historical origins—has demanded a tolerance and an openness to others. That has accustomed us to plural identities that lie at the heart of being British. All of us have separate identities, which stem from class, gender, ethnicity, sexuality and so on, and they are plural. We have plural national identities in this country to an extent that is quite different from anywhere else in the world. That is one of the things that makes us unique. It is the Union itself that makes us unique as a country.
It is intrinsic in the nature of the Union that we have these multiple political allegiances, and they are plural political allegiances. In this country, we can be comfortably Scottish and British, and I will come to my own set of statistics in a moment to prove that point. We can be Geordie and British or Bengali and British. We are accustomed as a nation to having such plural political identities. That British identity is different from our English identity, our Scottish identity or any of our other identities. It different partly because it is quintessentially plural. Therefore, I submit that it is inherently inclusive. That is something that we should value and cherish in this modern world. Unless we remember that pluralism of identity, it is very difficult to make sense of all the statistics that have been bandied about. They all seem to point in slightly different directions. They do not make sense and do not cohere until we remember that most people conceive of themselves as having those plural identities.
In January, the Ministry of Justice commissioned Ipsos MORI to carry out a survey to explore what sources of identity gave people a sense of belonging. We can all agree that that sense of belonging is very important and is an anchor for us in turbulent modern times. What gives people that sense of belonging? We asked 2,000 people who were demographically representative, and all the rest of it, how strongly, if at all, they felt a sense of belonging to various things, including Britain, England, Scotland, Wales, their local area or neighbourhood, their region, their age group and their religion or faith. The results are on the Ministry of Justice website for those who want to explore them further. I am sure that the hon. Member for Perth and North Perthshire will dissect them with great interest.
Some 45 per cent. of respondents said that they felt a strong sense of belonging to their faith or religion, 69 per cent. to their ethnic group, 70 per cent. to their age group, 78 per cent. to their local area or neighbourhood and 80 per cent. to Britain. In addition, 82 per cent. said that they felt a strong sense of belonging to England, 91 per cent. to Scotland and 95 per cent. to Wales. Of course, there are variations within the sub-groups from those national figures in relation to Britain. For example, 81 per cent. in England felt a strong sense of belonging to Britain, compared with 87 per cent. in Wales and 70 per cent. in Scotland. Interestingly, for all the focus on the Union, the figure for Scotland is virtually identical to that for London, where 71 per cent. of people felt a strong sense of belonging to Britain.
I was just about to do that very thing: 70 per cent. of those in Scotland felt a strong sense of belonging to Britain. What emerges strongly from all those figures is the strength of the British identity as a source of belonging across age, gender, region and ethnicity. For example, 75 per cent. of black and minority ethnic respondents said that they felt a strong sense of belonging to Britain.
Our British identity is important, and it is resilient. Despite all the talk about the growth of national sentiment in England, Scotland and Wales, 54 per cent. said that their sense of belonging to Britain had stayed the same over the past five years, 16 per cent. said that it had become stronger and only 28 per cent. said that it had become weaker. Everyone is welcome to look at the figures on the Ministry of Justice website. There are no significant variations across age, gender, region or ethnicity. The figures are important and show the continuing resilience of British identity.
With great respect to the hon. Gentleman, they are not so different. They are consistent with survey after survey on the strength of the British identity. He might need to go back to the surveys and look at the exact questions asked. That is always the case with surveys. I said specifically what question we asked—it was about a sense of belonging—and that there were plural identities. The number of people who feel exclusively British is relatively small, and I am quite prepared to accept that it is very small in Scotland, but that is not about being British. The very nature of being British is that it is a plural identity. What matters is that for the overwhelming majority of people in this country and in Scotland, being British is an important source of their identity. I will never persuade the hon. Gentleman of it, but I ask him to listen to the people in Scotland on the matter. The figures are up on the website, and I shall be interested to continue the discussion with him.
The debate about a British day is part of a much wider debate about how we can foster a greater sense of national identity, cohesion and citizenship. They are important issues. We live in turbulent times with all the phenomena of globalisation buffeting us, and we are going through difficult economic times, partly as a result of such phenomena. It is important that everybody feels a sense of belonging and of being anchored and rooted, so that we are not buffeted too much by the storms. That is why this agenda has been so important to this Government.
We are taking a lot of measures on the matter. I pay tribute to my hon. Friend the Member for Blackpool, South, who has been much involved in citizenship education. It is an important part of what we are doing. We introduced citizenship ceremonies, which were much mocked at the time—people were sceptical and cynical about them—but anyone who has seen one taking place knows how immensely valuable they are and what a sense of belonging they can generate. They emphasise the value and significance of becoming a British citizen.
Engaging young people in what it means to be a British citizen is enormously important. The introduction of compulsory citizenship through education for 11 to 16-year-olds in 2002 enabled young people to explore their identity and work out for themselves what it means to be British. All who have contributed to this debate agree, I think, that that is something that cannot be imposed by Government. Government can foster, encourage and enable, but essentially, it is something that people put together for themselves. They must decide what it means to be British. Inevitably, there will be differences of view. The hon. Member for Chesterfield described at some length the things that could be involved in making such decisions.
We have set up a youth citizenship commission, which will report to the Prime Minister next spring. Lord Goldsmith’s valuable review of citizenship, which was published in March this year, has contributed significantly to the debate. There is much in the review that is significant and of great interest, and we are considering the proposals, appropriately, in the context of our wider reforms.
The hon. Member for Epping Forest mentioned gimmicks. I am not sure whether I am correct in my interpretation of what she was referring to, but symbols are enormously important. The Union flag is an important symbol of what it means to be British, and the Government believe that it should be regarded as a source of pride for every British citizen. It should never be co-opted by any party or sect, particularly by the right-wing parties that have so poisonously sought to co-opt it for their cause. That is why, following consultation, we have lifted restrictions allowing public buildings to fly the Union flag only on certain appointed days. We think that that is important.
A number of people have suggested that we should have a British day. The hon. Member for Romford thoughtfully set out a range of options and addressed a lot of the issues arising from the suggestion. I am grateful to him. Clearly, he has drawn—
I am grateful to the Speaker for selecting this debate. I give special thanks to the Financial Secretary, bearing in mind that there has probably been a surfeit of scrutiny of financial issues, what with recent debates in Westminster Hall on international regulation, a debate yesterday on bank lending and one on the economy in the House on Monday. It is a sign of just how concerned hon. Members are about financial issues. Bearing it in mind that the Financial Secretary no doubt has many things to deal with at this difficult time, I am grateful that he is here.
I wish to declare some interests. They are already in the register, but it bears repeating publicly that I am employed by Tokai Tokyo Securities Europe Ltd, on behalf of which I deal with clients such as the World Bank and Scandinavian local government financing agencies. I should also mention that I am a prospective Royal Bank of Scotland pensioner, as long as the fund holds up, and that I hope that NatWest will continue to provide me with credit, so I have an interest.
In these times of instant media and instant judgment by talent shows and telephone polls, Treasury Ministers also face immediate, “X Factor”-style judgment of their performance in what happens in the markets, because of how our very transparent and liquid credit default swap markets now show—
Sitting suspended for Divisions in the House.
I was referring to credit default swaps, which are measured in basis points, so 15 basis points would be 0.15 per cent. The premium charged for insuring UK Government debt on 1 August was 15 basis points, the equivalent of £15,000 on £1 million of debt. That is the same level as that which was chargeable on the American debt at that date. However, since then, and in terms of today’s trading levels on CDS at five years, the UK now stands at 59 basis points or £59,000 for every £1 million, whereas the USA has gone up to only 35 basis points. The UK has moved from being third equal in terms of credit quality as charged by the markets to sixth, behind even Belgium. That should not be taken as a fundamental worry, but it is a sign of the challenges that the UK faces during the credit famine.
In the time remaining, I want to talk about the impact of the credit famine on Croydon and about the efficacy of fiscal and monetary policy. I have mentioned in previous debates not only the desire to rescue the banking sector, which the Government have done effectively and with great robustness and rigour, but the fact that the banking sector should be repaired to ensure that there is not a second damaging rescue process.
If time allows, I shall say a little about the practice of giving Government guarantees to banks for the issuance of debt and about the reform process that will be considered at the meeting in Washington at the weekend.
In Croydon, there is much that we can be proud of in the economy. In dealing with the challenges, we should thank the Government for the local enterprise growth initiative money that has been provided. It has been important in dealing with the challenges when businesses face difficulties. Even in these difficult times, Croydon Business has been able to support the creation of 70 new businesses.
I have spoken to a number of businesses about how they are experiencing the credit famine, and it may be helpful to give a feeling of what is happening in a strong suburban economy such as Croydon’s. I shall do that partly out of care and concern for Croydon and partly because it might be instructive. Only one company was willing to speak openly, but it is a company that is well placed to comment. The company is called Frost Group Ltd and is run by Jeremy Frost. It is an insolvency practice based in Croydon and is therefore well placed to be able to give a judgment on how to set about saving the livelihoods of Croydon people. It is encouraging to report that, without attribution, many companies were willing to say that the banks were behaving better than they were six months ago.
Many companies that face real cash shortages and cannot expand should go for insolvency. The reality is that, in terms of previous business practice, people who were willing to seek insolvency but who wanted to be able to pursue a business at a later stage had a lack of confidence that they would be able to do so, because they felt that there was no prospect of money being offered in the future.
Another complication reported by Croydon businesses is that, in previous recessions, they would perhaps have to deal with only one banker. However, given the exuberance of the credit markets in the last economic boom, many of those small businesses have to deal with three or four different banks. There are therefore great complications in being able to keep such businesses going, because of the inability of banks to work together to reach a satisfactory resolution to the problems.
The Frost Group also reported unfortunate examples of gross stupidity on the part of British banks in their lending to some local companies. A company with only a £2 million turnover was readily offered £250,000 as a lending facility. There was no hope of that money being paid back. In many ways, the response was that a lot of smaller businesses were also reliant on a mixture of borrowing against their own businesses and personal financing—even to the extent that smaller micro-businesses used credit cards to fund their activity. It is good that the House has looked at the idea of creating a maximum rate for credit card debt. That is something that the Japanese Diet did effectively last year—I think it capped the rate somewhere around the rate proposed in the House.
I should also like quickly to consider the issue of fiscal policy compared with monetary policy. An interesting article in last month’s International Monetary Fund publication, “World Economic Outlook”, considered the arguments against using fiscal policy as a means of pursuing a rescue from the current difficult market environment. It suggested that there are obvious risks in terms of the mistiming of public sector investments in the economy. Ultimately, that approach could be compromised by the cost of the debt that the Government are issuing being adversely impacted by the amount of public expenditure that takes place.
Despite the fact I have a point to make later about the policy of guaranteeing bank debt, I strongly feel that it would be wrong to accept such advice. Unfortunately, the economic downturn will be so significant that there is probably no risk of bringing on a great deal of public expenditure on capital projects in some kind of upturn. More importantly, as the Financial Times recently stated in its Saturday editorial, in current circumstances, with the credit market so badly damaged
“monetary policy may remain ineffective”.
We need only look at what happened in Japan with the complete failure of monetary policy to stimulate the economy. It was completely impossible to force banks to lend when they knew that asset prices would only fall further. We should also look at what has happened in the US with the stimulative effect of the moneys in the $800 rebate that was available from May. Although that was somewhat obscured by the increase in oil prices, there can be a great deal of confidence that it had a positive effect.
It is very good news that the Government are being so positive about the fiscal stimulation of the economy in their approach. However, given that, as the Prime Minister stated in the House today, so many Governments are pursuing such capital expenditures, we should bear it in mind that there must be a finite number of engineers around the world who can help by, for example, building a motorway in New Zealand, supporting $568 billion-worth of capital expenditure in China or, indeed, building an Olympic village and stadiums in London.
As I said, some people will say that, ultimately, fiscal policy will be damaged by the amount of debt that is issued by Governments. I think that that cannot apply in the case of the UK, bearing in mind how low UK debt-to-GDP ratios are, but I have a concern about how the Government have readily agreed to provide guarantees to our banks to issue debt. The rates at which those issues are being launched in the market are over LIBOR. The rates are coming down as investors see the very great value offered on the table. However, that can be as much as 85 basis points—0.85 per cent.—higher than would typically be payable if the Government were issuing gilt debt themselves.
Even when one takes account of the transfixing up-front payments that the Government are receiving from banks for that issuance, it is possible to postulate that perhaps up to 40 basis points a year are being lost. If the full £250 billion-worth of a three-year issuance is made, that could cost as much as £3 billion extra on top of the cost of normal gilt issuance.
That was a matter of comment on Bloomberg yesterday in the “Chart of the day”. It was about the distortive effects that the bank guaranteed debt is having. It strikes me, bearing in mind the number of Back Benchers who keep lobbying Treasury Ministers to impose their will on the banks, that it would be easier to impose that will if the Government were issuing more gilts and then lending that money directly, rather than giving a free passport for the approach to the market.
I am coming to the end of the time available to me, so I shall have to pass by the issue of the Washington meeting, but I will turn to another. I am grateful to the Financial and Exchequer Secretaries to the Treasury and the Chancellor of the Exchequer for responses to questions that I have asked here in Westminster Hall and in the main Chamber about the dangers of the Government being pushed into a second significant rescue of the banks. In many ways, the vigorous action that the Government took in dealing with the financial difficulties has given great confidence to financial markets, but if we have a second significant leg down in the markets and the Government find it necessary to provide yet further bail-outs for the banks, the Government’s political credibility will be questioned and, far more importantly, financial markets will lose their faith in the ability of Governments to hold the ring in financial markets.
After all, over the weekend, we saw AIG—American International Group—having to come back for a second rescue in the United States. Today, we have seen that the Paulson plan, which is admittedly based on taking bad assets off financial institutions, has had to be changed because of just how severe the situation now is in the US. So difficult is it that the remaining $350 billion of the $700 billion spend is to be spent on buying distressed car loans and credit card loans. That is a sign of the real dangers for Governments in a second significant financial crisis.
I believe that the banks are in such a poor state that we need to follow the policy that was pursued in Sweden in 1992 and is being followed in Switzerland with UBS of trying to remove those bad debts to clean the banks’ balance sheets of them, such that banks are confident once again of being able to offer credit to one another. I am grateful for the answers that I have received that the short-term liquidity scheme has been the means of being able to do that, but that does not strike me as a medium-term solution that will provide banks with the confidence to deal with one another and to start lending again to the excellent Croydon businesses that I mentioned at the beginning of my speech.
I welcome the information given to us by the hon. Member for Croydon, Central (Mr. Pelling) about the effects on his constituency of the unprecedented turmoil in global financial markets. The Bank of England’s financial stability report suggested that the global banking system has undergone its biggest episode of instability since the start of the first world war—that is the scale of what we are going through. The Government’s priority is financial stability and we will do whatever is necessary to ensure that. It is encouraging to hear that firms in Croydon are seeing improvements in how the banks are behaving, compared with six months ago.
A number of factors came together to set the stage for these problems, and no doubt economists and historians will debate exactly what those were far into the future. However, the factors certainly included low interest rates and investors’ consequent search for higher returns, the use of increasingly complex assets and a lack of transparency about what they contained, and the bonus-driven pursuit of short-term profit in global financial institutions.
Investors were overpaying for risky assets, a bubble had formed, and as American sub-prime mortgages defaulted—one in five people are behind with their payments—the prices of assets linked to those mortgages fell. The shock was huge, and quickly transmitted across other countries and to other asset classes. Having paid too much for the assets, financial institutions now have to revalue them, booking losses of more than half a trillion dollars in the process. That collapse became the catalyst for a global financial crisis.
The Government are taking decisive action to tackle the problems. On 8 October, after consulting the Bank of England and the Financial Services Authority, the Chancellor of the Exchequer announced specific, comprehensive measures to ensure stability in the financial system and to protect depositors and businesses who rely on that system. The hon. Gentleman referred to a number of elements of that programme, which include providing sufficient short-term liquidity by increasing the amounts available to the Bank of England special liquidity scheme to in excess of £200 billion. He also mentioned new capital for UK banks and building societies, and efforts to ensure that banks are willing to lend to each other with confidence—freeing up inter-bank lending—by offering a temporary Government guarantee for eligible new debt issued by banks.
The hon. Gentleman suggested that instead of recapitalisation, we could have used the “bank for bad debt” proposal.
It is helpful to have that clarification. Our judgment is that recapitalisation will have the desired impact. The problem with the “bad bank” idea is that it is difficult to put a value on what are sometimes called toxic assets. The people who know the value of those assets are the same people who want to get rid of them, so how can the Government decide what is the appropriate price to pay? In contrast, recapitalisation allows banks to absorb future losses due to toxic assets, while ensuring that taxpayers share in any upside, which we hope will follow.
The troubled asset relief programme in the US is open also to UK banks that operate in the US. That will help to create a market in toxic assets and, in due course, make valuations easier. However, it is worth noting that this year’s Nobel prize winner for economics, Paul Krugman, said that
“the British Government went straight to the heart of the problem—and moved to address it with stunning speed.”
He favourably contrasted what we have done in the UK with the approach taken in the US. He rightly acknowledges that, since we announced those measures, other countries have followed Britain’s lead.
The Government are implementing a comprehensive set of measures. On 13 October, the banks participating in the recapitalisation scheme and the Government announced steps to strengthen those banks’ capital positions through their own actions and, when requested, through support from the Government’s recapitalisation and credit guarantee schemes. In total, we are providing £37 billion to RBS and, following their merger, to HBOS Lloyds TSB.
At the conclusion of his remarks, the hon. Gentleman made some interesting points about the international nature of the crisis and the need for countries to work together to resolve it. I agree with him about the importance of that. We are therefore working with other countries, through the Financial Stability Forum, to strengthen the oversight of capital, liquidity and risk requirements; to increase transparency; to change the role of credit rating agencies, because problems there were a big part of what went wrong; to make regulatory authorities more co-operative and responsive to risks, including the establishment of international colleges for each of the largest global financial institutions; and to develop work by the Financial Stability Forum on the pro-cyclicality of the financial system.
The international community needs to take action to prevent further contagion and to support vulnerable emerging markets. A number of steps have already been taken by the IMF, and we need to ensure that it has the resources and instruments that it needs.
We also need to put in place a process to strengthen the legitimacy and governance of the Financial Stability Forum. The number of countries represented on the FSF is small, and we want to strengthen the links between the FSF and the IMF so that they are able to foster the international co-operation needed to promote global macro-economic and financial stability. We need to reaffirm our commitment to meeting global challenges despite the financial turmoil, including maintaining aid flows to meet the millennium development goals; moving rapidly, I hope, to a conclusion of the Doha trade round; and combating climate change.
As the hon. Gentleman knows, on 22 October it was announced that a summit of G20 leaders would be held in Washington later this week to address the global credit crisis. Last weekend, I attended a conference of G20 Finance Ministers and central bank governors in Brazil, where all these issues were debated ahead of the Washington conference. I agree with the hon. Gentleman that this week’s event will be important.
We should be grateful to the Minister not only for throwing himself around the world, but for coming to Parliament to be held accountable. Will he have time to comment on the merits and demerits of giving the banks guarantees to issue debt, rather than the Government doing the borrowing and then lending the money on to the banks?
All that I want to say at this stage is that, as the hon. Gentleman said, the facility being provided is being taken up. Some welcome unfreezing is taking place as a result. I am sure that he welcomes that as much as I do. That is one reason why we have seen the improvements on the position a few months ago that he mentioned. I assure him that we will follow closely how it works in practice. If changes need to be made, we will be willing to make them.
I conclude by saying that this is the first great financial crisis of the global age. Its effects are being felt across the world, and in many cases they will be lasting. Banking will surely be different in future. The roles of Government and regulators are being redefined. However, new opportunities are certain to emerge from the crisis; we should be confident that the UK is able to seize those opportunities. The Government will support the system to get us through the problems in the best possible shape, and to do it in a way that is fair to everyone in Britain.
Local Government (Gloucestershire)
I am delighted to open this debate, albeit rather later than expected—it must be a deliberate attempt to prevent us from discussing vital matters of local government reform in Gloucestershire. However, undaunted, I shall have a go, even in these twilight hours. I promise to give the Minister an easy time, because he is a cipher for good information on what we might want to do in Gloucestershire. I also welcome my hon. Friend the Member for Gloucester (Mr. Dhanda), who, if he catches your eye, Mrs. Dean, might want to say something later.
I am a long-term advocate of unitary authorities and would like two in Gloucestershire, but even if we do not get two, the debate still needs to be had. Gloucestershire is in a vulnerable position: all the authorities surrounding it have gone unitary. I congratulate them on making that move, but it puts us in a difficult position, because we are now alone and encircled. It is therefore time that we had a debate about this matter.
I bear the scars from the Banham review. I declare an interest in that, for the past 21 years, I have been a Stonehouse town councillor, and I am also a former Stroud district council and former Gloucestershire county councillor. I have seen local government in all its forms, and I am a great believer in it. However, I should like to think that I am also a believer in progressive local government that can represent people better in my area.
I am not alone in my support for unitary local government, and I am pleased to see that others have gone before me. I refer to Andrew North, the chief executive of Cheltenham borough council, who had the guts to say at the end of August that he believed that unitary local government was the way forward in Gloucestershire, even though it was not his authority’s view. I read with some sadness that he feels abused by others who do not think that the time is right for that debate. I congratulate Mr. North. I do not know him well, but he was right to raise the issue and to say what he believed in.
This is a good time to be having this debate. Gloucestershire might have missed the boat this time, but is there a trigger mechanism whereby we can consider bringing forward unitary authorities? There is a debate about Cheshire, Devon and Bedford and so on, where people are looking to move towards unitary local government. If we have missed the boat, what can we do in Gloucestershire? That is not to say, “What should councillors do in isolation?” We know what the problem is in Gloucestershire. That is why I said that I bear the scars from the Banham review. The county council, on the one hand, and the district, city and borough councils, on the other, fought themselves—I was among them—to a standstill. Each argued its corner.
We have to be more magnanimous and consider what is best for the area. From figures in areas that are going unitary, we know that money can be saved and that there is better government to be had. I therefore hope that a debate can take place. Sadly, although Stroud district council has considered the issues, there seems to be something missing from Gloucestershire. Even though leading councillors there wanted to go along the unitary route, there seems to be no mention of it on council websites. It has fallen off the map, and I want to put it fairly and squarely back on it.
I feel strongly that we have lost out because we do not have unitary local government. I will also say in passing that I feel quite strongly about the redoubling of the Swindon to Kemble railway line. One of the problems there was that Gloucestershire as a whole ended up looking both ways. It should have looked at the prime railway line—the Stroud Valley line—that needed redoubling, and I know that my hon. Friend the Member for Gloucester agrees with me. We have ended up with the North Cotswolds line, which is far less important. It is also the line that is represented by the Leader of the Opposition. I mention that merely in passing. That is an example of us not doing the right thing at the right time.
I have four examples of areas in which unitary authorities—or a unitary authority—in Gloucestershire could have done better. Unsurprisingly, the first one is waste. Sadly, Gloucestershire has seven authorities with seven waste plants. I hear that we may be moving towards a waste authority, but we have heard that before. The issue is highly pertinent: today, the county received the go-ahead for the £92 million private finance initiative credits, which will allow it to try to resolve its waste problem. However, my hon. Friend and I feel that the county is going in the wrong direction, because it is considering building an incinerator in my constituency, which I am not terribly pleased about. Again, if we had clarity over how waste collection authorities and waste disposal authorities worked, we could move in the right direction and listen to our local populations.
Last Thursday, we had an important meeting at Quedgeley in my hon. Friend’s constituency. Just like the problems in Gloucestershire, there is no strategy, no joined-up thinking, let alone action, and no coherence in how we are taking things forward. Therefore, waste is a wonderful example of how unitary local government takes the responsibility for the collection and the disposal of waste. Even if it is working with other authorities, it is able to command and to exercise proper responsibility, and that has not been happening in Gloucestershire.
My second example is concessionary bus fares. I would challenge anyone to come to Gloucestershire from outside and be able to explain exactly what is going on. We welcome what the Government have done and the money that they have put in, but authorities in Gloucestershire are quibbling over the money that they have received. Part of the problem is that we have different systems. Cheltenham has a different system from Gloucester and from the rural areas outside. A pensioner in my constituency catches a bus in Dursley in the south of my constituency before 9 o’clock. If he gets to Gloucester before 9 o’clock, he has to get off the bus, because there is no joined-up thinking or action. We have a dispute with Stagecoach over what money is being paid in Stroud district. We need a uniform system in which pensioners and other people who are entitled to use concessionary bus fares know what the system is and do not face the silly bureaucratic rules that damage the effectiveness of the system.
My third example is planning. Again, my hon. Friend and I bear the scars of that. We tried to oppose the idea that Stroud district came up with—I think it is still a mad idea—of plonking 1,500 houses south of the city of Gloucester. That number has now been increased to 1,750. Those houses will not be built, because of the current problems, but the plans have had a huge impact. Subsequently, the regional spatial strategy came up with the idea of using the next-door site of Whaddon, which is also in my constituency but south of the city, as a future site. We have had a private argument about whether the RSS should have done that. However, the decision was wrong. It showed three authorities doing three different things: Stroud district council proposing the site, Gloucester city council opposing it and the county council sitting on the fence, saying, “We’re not really in favour of it, but there’s no alternative.” Having talked to MPs and leading councillors, the alternative was to look at some element of dispersal. Many rural areas in my constituency suffer from a lack of affordable housing, yet that was not considered.
The problem is that the councillors just blame the Government, via the RSS, and my hon. Friend the Minister knows that, because he was in the firing line for that particular debate. That is wrong, as it is an abdication of responsibility by local government in the first place. Local government members sit on the RSS and in the regional assembly that created the RSS. If we had taken the right decisions locally, we could have moved forward in respect of the coherence of local government.
I agree. I have done it myself; people take one hat off and put another one on. It becomes increasingly ludicrous to pretend that one person can play two different roles; it would be much better if one person played one coherent role, so I totally agree with my hon. Friend on that.
Very quickly, my fourth example is something that I feel passionately about: the relationship between health, housing and social care. Housing is allocated within the districts. Health is in the domain of the primary care trust, which is now unified. That unified trust has done a much better job than the three primary care trusts that existed in the county. Social care lies with the county council.
I could wax lyrical, although I will not because of the shortness of time, about the way that that division impacts badly on the voluntary sector. I am a trustee of Care and Repair, which is a home improvement agency. A simple example of the problems that are created relates to the work of occupational therapists. Occupational therapists work for each of those authorities, and they often end up not knowing which of them should do a particular job, because of the way that the responsibilities are divvied out. More importantly, it cannot be good that those professionals are asked to work in that way.
So what are the advantages of a unitary authority? I have given four clear examples of where we could see improvement. The advantages to me are that we could clarify the strategy of local government, the delivery mechanisms, the responsibility and the accountability. Parish and town councillors should have a greater role. As many hon. Members know, I am a committed devolutionist. I believe that we should offer more responsibility to the first level of government, because it is often the best and most appropriate. I see that type of devolution as a real gain, and I know that I have the support of many of my parish and town councillors who want clarity in this area.
What we need to hear from the Minister today is how we can start the process in Gloucestershire. How can the people of Gloucestershire, rather than politicians and other people in established positions, have a view on this issue? The Government’s preferred aim is to move to unitary local government, at the speed of whoever happens to be the slowest on the train. In Gloucestershire, we are among the slowest, but we want to go a bit quicker and find some form of coherent local government—better local government and government fit for the 21st century.
I want to make one brief point about the savings that could be made by introducing unitary authorities.
The Government have been introducing a raft of unitary authorities around the country. In Shropshire, I believe that the savings made are of the order of £12 million. Cheshire is a local authority with six district councils and a county council. Its population of about 600,000 people is very similar to that of Gloucestershire. Cheshire is being divided into east and west, which is similar to the plan for Gloucestershire which my hon. Friend the Member for Stroud (Mr. Drew) has described. In Cheshire, people are anticipating savings of £16 million a year.
I know that my constituents are very interested in what they could do with that kind of money. First, they feel that taxpayers could benefit, because there would be the option to return some money to our taxpayers. There is also the option to do more in terms of flood defences, if that kind of money is available each year. Also, there are major projects, such as making the railway subway in the city of Gloucester disability-compliant, by putting in a ramp where we have steps at the moment. Such projects always seem to get left behind or fall through the gaps between different local authorities.
Big projects like that could come about. I have run surveys on this in my constituency, and I have had more than 200 responses, with 70 to 80 per cent. of people consistently saying that they want to reduce bureaucracy and take out a tier of local government. They want unitary authorities. I believe that Andrew North, the chief executive of Cheltenham borough council, is a brave man, who should be congratulated on what he has done. He has opened up a debate in Gloucestershire.
It seems a long time ago now, but I opened the parliamentary day with your good self, Mrs. Dean, and now I am closing it, somewhat later than expected, with your good self.
It has been a real pleasure to listen to my hon. Friend the Member for Stroud (Mr. Drew), and I congratulate him on securing the debate. I am pleased that my hon. Friend the Member for Gloucester (Mr. Dhanda) caught your eye, Mrs. Dean. He was a fine ministerial colleague, and I pay tribute to the impressive way in which he represents his constituents in this House and elsewhere.
I know that my hon. Friend the Member for Stroud is passionate about this issue and that he has raised it in the House several times. He spoke in a Whitsun Adjournment debate in 2006, when he set out his views favouring a two-authority unitary solution for Gloucestershire, but acknowledged the merits of having a single unitary authority for the county, if necessary.
The debate takes place at an extremely significant time for local government in general and in relation to local government process. It is important for local government in general because of the economic situation. I think that everyone in the Chamber would recognise that local authorities have a role to play in helping us through the current situation. The problems underline the need for active government and an active public sector to protect the most vulnerable in society, correct flaws in the market and exert leverage to secure the proper role and contribution that is required from our private sector.
I believe passionately that local authorities are best placed to understand the needs of their local communities and to bring together public sector partners and business to tackle problems. They have a new leadership role in the sub-national review of economic development and regeneration, as well as the ability to determine local priorities and bring together partners within local area agreements, with the flexibility of funding that that entails. Local authorities therefore have the opportunity to help their local communities to mitigate the effects of the current situation and to lay the foundations for sustainable long-term recovery.
This is an equally important time for the process of local government restructuring. We are fast approaching 1 April 2009, when new unitary authorities will replace the existing two-tier structures in their areas. We have already heard that Gloucestershire is not part of the current round of restructuring, but the points that my hon. Friends have made are pertinent to the objectives of the restructuring process generally. Before I address the important issues that they have raised, I shall provide some background to the current round of local government restructuring.
As part of the wider debate about governance and the future of local government in England in the 21st century that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs initiated when he was a Minister in this Department, a ministerial dialogue and round-table events were held to discuss these specific issues in early 2006. Interestingly, the second of the county dialogues took place in Gloucestershire and involved local authority members and officials from both tiers of local government as well as a range other local government stakeholders. Those events provided local government and its stakeholders with a genuine opportunity to discuss options and to put forward their views on the subject to central Government. It was not a debate about local government reorganisation per se, but the events took place in the light of changes occurring across the public sector spectrum.
Anecdotal evidence indicates that the ability of some local authorities to shape their communities, improve economic prosperity and provide high-quality services to local people can, as my hon. Friend the Member for Stroud has so eloquently demonstrated, be complicated by the two-tier structures in some shire county areas. In some cases, those arrangements have caused confusion and hampered the delivery of cost-effective services that addressed the needs of local people. We have heard examples of such cases today.
Having listened to the views that were expressed by all parties concerned at the time, the Government finalised their position in summer 2006. In October 2006, they published the local government White Paper, “Strong and Prosperous Communities”, and the accompanying “Invitation to all councils in England”. In issuing that invitation, the Secretary of State sought from local authorities proposals that would either enhance existing two-tier local government working arrangements, by creating pathfinders, or establish new unitary local authorities.
The invitation was about seeking proposals for new local government structures that local people could better relate to and engage with, and that could better provide the leadership necessary to promote the social, cultural and environmental well-being of places. It was about seeking structures that could provide the stronger strategic leadership necessary to promote economic development and regeneration. As I said, that strategic leadership is even more important in today’s economic climate.
That original invitation outlined five criteria for successful proposals: strong, strategic leadership, effective neighbourhood empowerment, value for money and equity in public services—my hon. Friend the Member for Gloucester raised that point—affordability and a broad cross-section of support from partnerships and stakeholders. Throughout the process, those have been our criteria against which proposals have been judged. More importantly, they will form the basis of the judgment that local people will make about their new unitary councils and those who lead them.
It was left to individual local authorities, or groups of local authorities, to respond to the invitation as they saw fit. I understand that by the closing date of 25 January 2007, the Secretary of State had received five outline pathfinder proposals and 26 outline unitary local government proposals. For whatever reason—I do not know the local circumstances—there seemed to be no appetite for local government reform among any Gloucestershire authorities, and they chose not to respond to the invitation.
I am coming to the key point that will respond to my hon. Friend’s question.
At present, as my hon. Friend is aware, we have no plans for any further programme of invitations to councils to submit unitary proposals. However, we recognise that in some specific cases there might be areas where circumstances are such as to warrant a focused and targeted invitation to the councils concerned. Legislation allows for that, particularly the Local Government and Public Involvement in Health Act 2007. I should make it clear that, as the Government explained in debates on that Act in the other place, such circumstances would be exceptional. For us to issue such a targeted and focused invitation, councils would have to make a very good case and present compelling arguments as to why there needed to be a move to unitary local government at that particular time. It would need to explain the special circumstances of the two-tier area involved and why it should be treated specially and subject to an invitation to the councils concerned to make their unitary proposals.
I shall be blunt: it would be wrong of me to encourage councils in general to work on unitary proposals, but in direct response to my hon. Friend’s question, if we receive representations from a council wanting us to consider issuing an invitation to it and its neighbouring councils, we are legally obliged to consider that and to decide whether to do so. I hope that that clarifies the matter and helps him.
Local government has a vital role to play in shaping and leading the communities that it serves. It is the sphere of governance that is closest to the citizen, and I think that my hon. Friend agrees that as such it is best placed to hear and address the needs of local residents, and to understand and provide the local services that communities need. As I hope I have demonstrated, the leadership that it provides is essential to the economic, social, cultural and environmental well-being of places and communities.
Local government in all its forms, whether unitary or two-tier, is vital in creating and shaping successful places where people want to live, work and play. In the absence of structural reform in Gloucestershire, I would encourage all the local authorities and local partners there to work together with commitment and creativity to serve the needs of their residents to the best of their abilities, as my hon. Friends the Members for Stroud and for Gloucester have tonight.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Six o’clock.