Wednesday 3 March 2010
[Frank Cook in the Chair]
Home Energy Efficiency
Motion made, and Question proposed, That the sitting be now adjourned.—(Mr. Heppell.)
I am pleased to have the opportunity to raise the issue of home energy efficiency and fuel poverty. When I applied for the debate, there were a few key issues that I wanted to bring to the Chamber’s attention and to press the Government on, but I was inundated with a huge variety of information and lobbying from a great diversity of sources. I must apologise to some of those people who brought such issues to my attention because I cannot address them all, but perhaps other Members will. I shall concentrate on a few areas in which I have a particular interest or concern.
On the basic issue of fuel poverty, we should recognise that we are almost back to where we started from 10 years ago. We saw a dip in fuel poverty, but it has risen sharply and it is estimated that between 4.5 million and 5 million households across the United Kingdom are in fuel poverty, which is back to the same levels that we experienced 10 years ago. Being a Member of Parliament for a Scottish constituency, I must emphasise that the proportion of people in fuel poverty or suffering from the problems of high-cost heating is much higher. Statistics compiled by the House Condition Survey in Scotland show that 618,000 households in Scotland—27 per cent. of the total—are in fuel poverty, which is up 47 per cent. over the past five years. A third of those are in extreme fuel poverty, by which I mean that they spend more than 20 per cent. of their income on fuel.
Energy Action Scotland believes that even those figures are an understatement and that as many as 750,000 households could be in some degree of fuel poverty. Such statistics are central to the debate, but for every household in fuel poverty, there are others who are not technically in poverty but have real problems with heating their home and paying their bill, and they are equally interested in what the Government can do to deal with the situation.
I shall raise a few aspects of home energy efficiency and fuel poverty, and await the Minister’s reply with interest. Let me start with hard-to-treat homes. It is astonishing to discover what proportion of the UK housing stock is classified as hard to treat. Some 43 per cent. of households in England and more than 50 per cent. of households in Scotland are, in one form or another, hard to treat. They are mostly houses with solid walls or the early timber-framed houses, and flats and homes in multiple occupancy.
Under the carbon emissions reductions target, energy companies are required to promote insulation and efficiency, but evidence suggests that they tend to take the easy way out by, for example, issuing low-energy light bulbs rather than investing in significant insulation or alternative forms of heating. Hard-to-treat houses have pretty well been ignored by the energy companies. For many, the main way to tackle the problem is through external wall insulation, or external cladding, or, in some cases, internal cladding. By definition, such houses are hard to treat. Cavity wall insulation or loft insulation does not do the job. In addition, they need lower cost, carbon-free, low-tariff fuel systems, and for many, the packages are simply not available.
It is worth recording the fact that the social housing sector faces huge bills to tackle the problem. Dealing with the existing housing stock reduces the pool of funds available for providing new houses. A couple of examples have been brought to my attention. Aberdeen city council, which has been considering its high proportion of hard-to-treat houses, has recently upgraded 4,505 dwellings in multi-storey flats through a combination of cladding and combined heat and power district heating systems. The cost of the cladding was such that the council concluded that it could not clad them all. Effectively, it ended up installing more efficient heating systems, which heated the air as much as the buildings. Therefore, although such a system was beneficial to the tenants in that they could afford the heating, it did not solve the entire problem of the waste of energy.
Orkney council has also instigated a pilot scheme and spent £3.5 million on external cladding on a number of its houses. All over the country, local authorities and housing associations are independently tackling the problems without any real exchange of information or co-ordination, which is not the most efficient way to deal with the matter.
I welcome you to the Chair, Mr. Cook, and congratulate the right hon. Gentleman on obtaining this Adjournment debate. He will know that the Scottish Government home insulation scheme attached some criticism to the time it was taking to bring schemes to different areas of Scotland and to bring homes up to standard, as was the case with Northern Ireland in relation to the criteria used for how people apply for such schemes.
Does the right hon. Gentleman think it would be beneficial for the two regional Ministers to consult, and therefore exchange ideas, on how we could move the schemes forward and help in particular those suffering from cancer, who really suffer from the cold and need their homes to be insulated?
I take the point. As the hon. Gentleman will know, I believe in devolution, but I do not think that that means that we cannot co-ordinate effectively. The UK Government have a role to play in encouraging such co-ordination, particularly when it is about facts, information, best standards, value for money and cost-effectiveness. I completely agree with him, and the Minister will have his opportunity to address that matter. I will say only that the Government roll out schemes one after another, but it is difficult to find out how they co-ordinate them.
Let me finish on the issue of hard-to-treat homes. I have had a long and extended conversation with one particular constituent who is exercised by the issue. She is very aware of what is going on, and thinks that a lot of her neighbours do not realise how inefficient their homes are. She has had a thermal imaging take done on her house, which shows just how much energy is leaking, and her house is the same as all the others in the street. Her concern is that no one will tell her what is the best thing to do. She does not know what materials to get, there is no financial assistance or technical advice, and she has not been able to resolve her problems. She suggests a co-ordinated approach that applies the best technique and best advice, possibly reducing or abolishing VAT on the materials and providing certificated standards across the country. The Government should consider such issues rather than just accept the appalling situation in which half our housing stock is hard to treat and we have no co-ordinated response to deal with it.
Let me say as an aside—I do not want to dwell too long on this—that whenever we discuss the issue we should also consider the extra winter deaths that are directly attributable to fuel poverty. Such deaths have increased this year because of the cold winter. That issue never arises in Scandinavian countries because they do not have hard-to-treat homes. They have much better standards and efficiency, and I believe that we, too, should tackle the problem in a much more effective way.
Does the right hon. Gentleman agree that in rural areas such as Norfolk, where my constituency is located, an awful lot of retired people and pensioners have no choice but to use oil, because no other source of energy is available to them? They are penalised for living in a rural area and by the punitive costs that the oil companies place on them. Therefore, their poverty becomes worse.
I am very grateful for that intervention, because it precisely anticipates the next paragraph of my speech, which is about that point. People in rural areas who do not have access to mains gas depend on other forms of heating—mostly oil, but sometimes liquefied petroleum gas or some other alternative.
I was surprised by the figures on the issue. They might be incorrect and the Minister might have more accurate ones, but my information is that 1.5 million households do not have access to mains gas and 1 million of those households are in Scotland, which is a much more rural country. The rest are probably in Norfolk—I do not know.
The cost of heating fuel for someone who is not on the gas mains is, on average, a third higher than for someone who is on the gas mains. I have been a Member of the House for rather a long time and when British Gas was being privatised, I served on the Committee scrutinising the Bill that privatised it, which became the Gas Act 1986. I also got involved in a stand-up, dragged-out row with Sir Denis Rooke—not a difficult thing to do—on behalf of my constituents at the time, because the gas mains were not being extended. As a result of that row, I got significant gas mains extension in several communities across my constituency.
However, I predicted that the privatisation of gas—this issue is about not the ideology of privatisation, but its consequences—would pretty much stop the extension of gas mains to anything other than major new developments, which has happened, although it is somewhat unacceptable.
In that context, if the Government are unable to do more to ensure the extension of gas mains—I would add that, even if they do ensure that extension, a lot of properties cannot be put on the mains—I wonder whether they will specifically address the needs of those households that are not on the gas mains.
I congratulate the right hon. Gentleman on securing the debate and on his speech. However, the situation is even worse than he describes, because the gas companies hold the individual households to ransom, charging ridiculous sums for connection fees. That is so unfair, given that the connection fees for everybody else who is connected were all lost in the capital costs. Those people without connection are being forced to pay the total cost of connection.
I completely agree with that point. At the time of the privatisation of British Gas, I formed a good alliance with the gas regulator, who challenged British Gas over its assertion that it could not afford such connection costs. He said that, if he was not satisfied with the costings of British Gas, he would force it to absorb the costs itself and he did so. Unfortunately, such engagement does not appear to exist any more.
Therefore, I repeat my question to the Minister: why, for example, should the energy companies not be required to prioritise in their alternative energy, renewable energy and insulation programmes those people who are not on the gas mains? Furthermore, on the proposal to introduce micro-combined heat and power, which could be a benefit, why are the Government also proposing a tax break that will make micro-CHP less attractive for gas and oil-fired CHP systems, even though those systems double the efficiency of a house’s heating arrangements?
It seems to me that there are things that the Government could do to ensure that people in rural areas who are off the gas mains receive priority treatment from the energy companies, but there is no indication that the Government are prepared to do those things.
I am sure that that would improve matters. The hon. Gentleman will appreciate that we have a different arrangement in Scotland, but I am aware of the issue involving double glazing. Double glazing is not the most efficient measure that may be taken, but clearly it is a relevant factor. There is not much point in putting in cavity wall insulation and loft insulation if all the heat goes out of the windows.
I want to move on to a subject that is topical, given the cold winter—cold weather payments. They are a very specific mechanism for dealing with fuel poverty. However, the mechanism for delivering cold weather payments means that millions of people lose out on them. It is estimated that 1.7 million people who would be entitled to the pension guarantee have not applied for it, and because they have not applied, they do not achieve the threshold—the “gate”, as it were—and so they are not eligible for cold weather payments, which they would otherwise automatically accrue.
In my constituency, it is estimated that 1,600 pensioners would be eligible for cold weather payments, but they have not applied for them, and I am sure that other Members have similar figures for their own constituencies. I do not wish to labour the point, but it is simply a geographical fact that Scotland is colder than the average for the United Kingdom.
Said with feeling by my hon. Friend.
The cost of heating a house in Stornoway is 62 per cent. higher than that of heating an identical house in Bristol. Within the cold weather payments, no account is taken of that fact. Therefore, the contribution that those payments make to people who live in colder parts of the United Kingdom is reduced.
I can testify that, in my own part of the world, we have had snow on the ground pretty well continuously, with only the odd break of a couple of days, since before Christmas. We have also had frost pretty well every night, and indeed for most of the day, for most of the period since Christmas.
I accept that it might be colder in Scotland than in other regions of the United Kingdom, but does the right hon. Gentleman accept that wages for people in Northern Ireland are lower than for those in the rest of the UK, and that, therefore, a higher percentage of people’s wages is used to heat their homes? People have to choose between heating their home and putting food on the table. That is a great cause of concern within my constituency.
Of course I completely accept the important point that the hon. Gentleman makes, and that situation increases the incidence of fuel poverty, given the percentage of people’s wages that is being spent on fuel.
I want to give an example. I am sure that many of us are out pounding the streets and highways and byways of our constituencies at the moment, even more frequently than we are wont to do normally. I left my home on Saturday morning to do just that. The temperature when I left was -6° C and there was about 20 cm of impacted snow on the ground outside my house. By the time I reached the Aberdeen city part of my constituency, the temperature had reached 6° C and there was no sign of any snow—indeed, the crocuses were up and the daffodils looked as if they were coming out.
However, that area in Aberdeen city is the base from which the cold weather payment calculation for the inland western part of my constituency is determined. As I say, the temperature difference between different parts of my constituency is astonishing.
I make a plea on the issue regularly, but I again want to say something, quite specifically, about the weather stations that determine where cold weather payments are made in my constituency. The two most important stations are at Dyce and Braemar. Anybody who knows Scotland will know that Dyce is 3 miles from the coast and that Braemar holds the record for the lowest recorded temperature in the United Kingdom. However, one part of my constituency, around Alford, receives cold weather payments based on Braemar. Meanwhile, 3 miles up the road in Huntly, which is further inland and further up the hill so that there is more snow and lower temperatures, people have their cold weather payments assessed from the coast at Dyce. That is ridiculous and unjustifiable.
I simply say that the cold weather payments for that part of my constituency—the Huntly area—should be based on temperatures in Braemar, or temperatures somewhere else more appropriate than Dyce, possibly Aviemore. They should certainly not be based on temperatures in Dyce. That is my special plea, and I have to say that it is a very important point. If the Minister ever wished to come to my constituency, I could show him the temperature difference between different parts of my constituency with no difficulty whatever.
Thanks to a lot of pressure from Members in all parts of the House, the Government are in the process of introducing feed-in tariffs. However, I refer to the early-day motion tabled by my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) on that subject, which I have signed, as have many other Members. Fundamentally, the issue is that those people who have pioneered the use of generating capacity run the risk of being penalised for being involved in that area too early.
I want to press the Minister on the issue, because there is some suggestion that a review is going on to determine whether people who have already installed generating capacity that feeds into the grid should benefit from the new arrangements, rather than being penalised for being pioneers.
For example, I have a constituent who has told me that he installed a solar photovoltaic system in two phases—1.82 kW of capacity in July 2008 and a further 2.56 kW of capacity in July 2009. He has two issues. One is that the equipment he used was subject to microgeneration certification scheme approval guidelines. His concern is that the scheme approves only the most expensive systems. He was able to find cheaper systems that met European standards but not the certification standards, and he thinks that that is inefficient and unfair. Again, I leave the issue with the Minister.
My constituent’s second and more specific point, having made that investment, concerns why on earth he should not benefit from the feed-in arrangements. I know that my constituent would be extremely pleased and grateful if the Minister gave him some encouragement.
May I take the right hon. Gentleman back to UK-wide matters on the cost of energy? I wish to make three brief points. First, does he agree that the hundreds of social tariffs should be simplified and standardised, and that they should be more generous? They are very confusing and do not give everyone access. Secondly, we should end the obscenity of people on pay-as-you-go tariffs, with the poorest in society paying more per unit of energy. Thirdly, we must ensure that people without access to direct debits—again, the poorest in the country—have access to the discounts that are available.
Those are pertinent points, and I am sure that the Minister will take note of them. However, as I said at the outset, there are so many dimensions to the matter that it is impossible to cover them all in one speech—and I am now near the end of mine. Indeed, if I tried to cover all those points, I might get less useful answers from the Minister on the particular issues that I wish to raise.
None the less, the intervention by the hon. Member for Castle Point (Bob Spink) is pertinent. The situation is most confusing. Too many things are going on, and there are too many obligations. People who by definition are poor have to worry how the heck they are to access all those things, including whether they are getting the best deal and who they should ask for advice. Those are questions also for those who are not technically fuel poor, but who wish to improve the energy efficiency of their homes and to use greener energy systems.
I do not know whether other Members have tried this, as I have, but when one seeks information someone will say, “This is who supplies solar, and these people do wind, and these do heat pumps.” People then phone those suppliers, but of course they want to sell them the products that they market. What people really want is access to an objective, impartial energy audit that says, “Your house needs this in the way of insulation and would benefit from that energy mix. Here is a range of the people who can provide you with installation quotes and costs, and they work to approved standards.” If that happened, I suggest that people would then want to know what grants and long-term loans were available.
One scheme that seems to have been successful is the boiler scrappage scheme. Those running it say, “The phone is ringing off the hook with people wanting to replace their boilers and take advantage of the scheme.” I say in passing that it is regrettable that the scheme has not been extended to Scotland. I know that Scotland has the money and may be spending it differently, but I am not trying to make a party political point. However, given the scheme’s success, I suggest that the Scottish Government could usefully consider it.
If so, I am glad to hear it. The latest information that I have is that it is not available, but perhaps it will be, and I would welcome that. It is a simple scheme and it works. Devolution allows the Scottish Administration to do things differently, but I believe that if the scheme works we should use it. That is all I wish to say about the matter.
People also say that we should have smart meters, but smart meters are of value only if they tell people what is going on. They have to be able to record in real time, so that people can make active decisions. We should be clear when talking about smart meters that we need the whole package, not just half of it.
Home energy reports are of rather limited value—almost a gesture. They could be much more rigorously enforced. Indeed, if we are raising standards, the standard of home energy reports should rise with them. People should know their real value and, if they are below value, what should be done. That should be included in the negotiations on buying and selling houses—people should know what they have to do to bring the reports up to standard.
We are in the middle of the deepest recession in living memory. We face the huge challenges of hard-to-treat homes, fuel poverty and the need to develop and introduce greener forms of energy. I can think of nothing that would do more to stimulate employment, investment, economic growth and recovery than a major investment programme in that area. My concern is that the Government have failed to come forward with a comprehensive way to ensure that we deliver the materials and the installation capacity, and the carbon reductions and poverty reductions that should go with them.
I have no doubt that the Minister will refer to yesterday’s announcement. He will not be surprised to hear that, like so many announcements, it is a statement of good intent that sounds attractive, but when will the detail be available and when will anyone be able to use it? If people want to invest in energy efficiency and renewable energy in their home, they will want not only the best advice, but the right financial package to cover the cost of installing it and to give them savings at the same time.
I welcome the principle behind yesterday’s announcement by the Secretary of State, but I shall be much more convinced when I see the colour of his money and we hear details of how people can get hold of the money. I suspect that it will not be this side of the general election.
We are debating an important subject with many dimensions to it, and I am sure that other Members will wish to mention other aspects. I hope the Minister can answer some of the key points that I have raised.
It is a great pleasure to speak under your chairmanship, Mr. Cook. I congratulate my right hon. Friend the Member for Gordon (Malcolm Bruce) on securing this debate, which is on an important topic and is being held at an apposite time.
I agree with all the points that my right hon. Friend made, but I particularly endorse what he said about the effect that the location of the weather stations has on the cold weather payment. I am sure that Members from all parts of the north of Scotland have similar problems with the location of the weather stations; it leads to communities living in certain geographical circumstances that experience very cold weather being disadvantaged when it comes to the allocation of those moneys.
I hope that the Minister takes on board what my right hon. Friend said about the weather station in his constituency, and that he is willing to extend the principle. Perhaps he will don his snowshoes or his skis and tour the north of Scotland, to experience for himself some of the variations in weather that occur in geographically contiguous areas.
It was not in the highlands or in the snow, but I was in Aberdeen last month.
I am delighted to hear that. I hope that the Minister enjoyed his visit. He is welcome to visit the north of Scotland at any time, not least if one purpose of his visit is to consider the issues raised by my right hon. Friend.
This debate is taking place during a long period of severe winter weather. When I arrived home in Aviemore last Thursday, I found my home under 2 feet of snow. When I woke in Friday morning, almost another foot had fallen, which meant that I had to work from home. All the roads were closed and I could not fulfil my constituency engagements. As my right hon. Friend said, with snow on the ground in Aviemore and many other parts of my constituency consistently since 16 or 17 December until now, and probably for several weeks more, such matters are particularly important.
I wish to speak about a particular group of people—those who live in rural and remote areas. As my right hon. Friend said, many use heating oil or liquefied petroleum gas to heat their homes, as they are almost exclusively off the mains gas grid. That has a number of consequences. First, people are more likely to suffer fuel poverty. Secondly, more are likely to suffer extreme fuel poverty. Thirdly, they are more likely to have much higher energy costs, and they tend to live in harder-to-treat homes.
I bring some evidence to the debate. It is based on a survey that I carried out with my right hon. Friend the Member for Ross, Skye and Lochaber (Mr. Kennedy) last autumn. We focused specifically on the rural parts of my constituency and his—Badenoch and Strathspey in my constituency, parts of rural Inverness-shire, Ross-shire, and Skye and Lochaber in my right hon. Friend’s constituency. The evidence demonstrates that fuel poverty is felt more extremely in those parts of the country.
We found that 15 per cent. of people spent more than 10 per cent. of their household income on energy bills. Of those people, 21 per cent. spent more than 20 per cent. of their income on energy bills, which, as my right hon. Friend the Member for Gordon said, is the definition of extreme fuel poverty. For 49 per cent. of those people, the main source of heating was heating oil. Ten per cent. were using LPG, some were using electric heaters and a few were on mains gas. Over the past year, 70 per cent. had seen their bills rise and 43 per cent. had struggled to pay their energy bills. Various points were raised about energy sources. It was interesting to note how few people received help through social tariffs and how few had tried to switch suppliers.
Does the hon. Gentleman agree that a weakness of the CERT—carbon emissions reduction target—scheme is that the lack of transparency means that energy companies do not have much incentive to prioritise groups that are in fuel poverty? Too often, they go for the early easy wins, which are homes that are easier to heat.
I agree with the hon. Gentleman. In many stone-built houses without double glazing, the energy-saving light bulbs that have been sent through the post are piling up, when different sorts of help would make a bigger difference. He is right about the transparency and support in CERT schemes. That is also a problem with social tariffs, which can be hard to understand and to get information on because of the complex systems that vary from company to company. Those things militate against people receiving the help to which they are entitled.
I wish to raise a number of issues with the Minister in relation to hard-to-treat homes where heating oil or LPG is the main energy source. The first point is about regulation. There are obligations on major utility suppliers, such as gas and electricity companies, to engage in schemes such as CERT, to provide support and to offer social tariffs. There is no such regulation of heating oil providers. There is also a major gap in the access and involvement of statutory consumer bodies such as Consumer Focus, which take up and pursue issues.
Does the hon. Gentleman agree that there is great concern within communities about the price of heating oil? When the market price rises, the consumer price immediately goes up. However, when there is a reduction in the market price, the price that people pay for oil to heat their homes is not reduced at the same speed. There is a demand for transparency in that regard.
I am grateful for that intervention, which made one of the points I was intending to make. That trend applies not just to the oil sector, but to gas and electricity. Companies are quick to increase the price but not as quick to pass on reductions. Certainly in my constituency and across the north of Scotland, small providers in the heating oil sector do their best to pass price reductions from the major oil companies on to their customers as quickly as they can. The lack of will is not with the local providers, but with the major oil companies from which they receive their supply.
Does the hon. Gentleman agree that one difficulty with the pricing of fuel, including gas, is that it is traded at least four or five times through commodity dealing before it reaches the shores of the United Kingdom, whether in Scotland, Northern Ireland or elsewhere?
On this important point, does the hon. Gentleman agree that the situation is even worse than has been stated because many energy companies forward-buy their oil or gas at a fixed rate? Therefore, when prices rise, they do not necessarily go up for the companies straight away; often it takes up to six months. However, they are quick to increase prices for the consumer. The regulators need to take more firm action to make this matter transparent and to stop it.
I am grateful for that intervention. I am sure that the Minister heard the point and will respond.
Some smaller heating oil companies in my constituency endeavour to help people struggling with their bills, for example by allowing them to spread payments regularly over weeks or months so that they do not have to pay huge lumps of cash up front when the oil tank has to be filled up every couple of months. My constituents have had to fill their oil tanks more frequently over the past two or three months because of the severity of the winter conditions. After Christmas, the road conditions made it difficult for oil companies to get oil to people’s homes and there was a serious risk of shortages. I am grateful to the Government for acting to lift some of the working-hours regulations to address that issue. Many companies would like explicitly to provide social tariffs in this sector to people in the most difficult financial circumstances, but are unable to do so because of their relationships with large oil companies and the lack of regulation.
My second point about such households concerns access to home insulation and other energy efficiency measures, to which my right hon. Friend the Member for Gordon rightly devoted a large portion of his speech. As such help is delivered partly through electricity and gas companies, those who have an unregulated oil provider have less access to such help to improve their homes.
I have investigated the systems that have been put in place in Scotland, such as energy helplines. Although in theory there are measures available to help people in older homes that use heating oil, in practice they are hard to get. One organisation I talked to could give only one example of someone having an air-source heat pump installed as an alternative to oil, but could give hundreds of examples of people who had received a bit of loft insulation. I am not decrying the importance of loft insulation, but the people I am describing tend to need more expensive measures that are just as necessary, if not more necessary, because of the circumstances in which they live.
The hon. Gentleman is touching on an important point. In parts of the UK, particularly Northern Ireland, advantageous schemes are unveiled by devolved Ministers. Sometimes, as advantageous as the schemes are, the people who could benefit most from them, namely the lower socio-economic groups, are unaware of the advantages. Unless such schemes are promoted more vigorously, the people who are supposed to benefit are also the ones who are least likely to avail themselves of them.
I would state the point in a different way: many of the schemes sound good, but are difficult to access for the people who need them most, who are often those living in older homes, for whom the schemes would be more expensive. They are difficult to access partly because of the information and the lack of awareness of what is available, but partly because the way in which the schemes are administered often means that the priorities are more to do with volume than with helping the people with the greatest need. I would like the Minister to address that issue.
My hon. Friend will have been to many presentations in this House by energy companies, where they offer all kinds of new technology but point out that the costs are disproportionately high. Does he agree that if the Government got their act together and put all of the schemes together, the market would be unlocked and a whole new industry created, which would reduce costs and benefit everybody, whether poor or better-off?
I am sure that my right hon. Friend is right. An extension of the principle behind the boiler scrappage scheme to other technologies over a fixed period would provide an incentive, which would encourage industries to flourish and the training of technicians. That would make a big difference to the availability of such support.
Before I move on to another issue, I should say that I would be interested to hear the Minister update hon. Members on the status of the renewable heat incentive. I have big concerns about a scheme that is based on adding to the costs faced by those people who already have the highest costs—people who use oil, gas and coal—to fund improvements that are necessary to reduce those costs. The financial burden of those sorts of improvements should not fall most heavily on people who are already facing the highest costs. The Government were consulting on and considering that issue, so I would be grateful for a status update and an assurance that the Government do not intend to place extra financial burdens on users of heating oil and LPG, whatever the environmental merits of the schemes that will be paid for.
I also want to ask the Minister one or two questions on another form of fuel that can help to deal with such issues and provide an alternative to healing oil: wood fuel. Wood fuel is renewable, available and, very often, local. For example, in a housing development where I live in Aviemore, a district heating scheme warms 100 homes and is fuelled by a wood fuel boiler that uses wood material sourced from the sawmill 7 miles down the road. That has reduced costs, had significant environmental benefits and is an example of the sort of thing that could be done more often with wood fuel.
A very good European co-operation programme is going on between people in Scotland and other European countries. It has been set up by an organisation called Highland Birchwoods, which is considering how the use of wood fuel can be encouraged and how wood fuel boilers on a domestic scale can be pushed forward.
I would be grateful for the Minister’s help on the issue of the VAT regime on wood fuel. Hon. Members will know that VAT on fuel is charged at 5 per cent. As wood has a wide variety of uses, however, suppliers of wood fuel face a VAT charge of 17.5 per cent. at wholesale level. The Government provide very little information proactively to suppliers of wood specifically for fuel uses—whether to providers of pellets wood chip, or anyone else who might be taking wood on a wholesale basis and converting it into wood used specifically for fuel—about how to reclaim the VAT difference.
In my constituency, for example, log suppliers have in good faith understood that they were required to charge VAT at 17.5 per cent. on logs when, in fact, they should have charged 5 per cent., which would have made a big difference to relative costs, principally to the consumer. Government should try to make clear the VAT rates on wood fuel and ensure that information about how to reclaim the difference is made easily available to small suppliers. That would make a big difference to promoting wood fuel.
More skilled technicians who can install wood fuel boilers as part of a domestic or district heating scheme are also needed. I commend to the Minister the work being done at Inverness college in my constituency to train up such technicians. As the technology becomes available and is more widely promoted, and the supply chain for domestic wood fuel builds up, it is important to ensure that there is a network of people who can install the technology.
I shall end on the same point with which my right hon. Friend the Member for Gordon concluded. We are just coming out of the depths of the worst recession that this country has experienced for 60 years, and there is a significant need to create jobs. We have the opportunity to move the economy in a more environmentally sustainable direction. However, we need to ensure that any changes operate on the basis of the overriding principle of fairness that I certainly believe in and that is so well established in this country.
An effort to enhance support for measures to tackle fuel poverty—particularly home energy efficiency and home insulation—and to bring people in remote and rural areas who use much more heating oil and LPG within the reach of those measures, would have a dramatic impact on jobs, on the financial burdens on families who are struggling to make ends meet, and on ensuring that our society is fairer. For all those reasons, I urge the Minister to take any steps that he can to ensure that people in remote and rural areas who rely on off-gas-grid heating sources are given a much higher priority than they receive currently in the Government’s thinking.
I apologise, Mr. Cook, for your not being informed that there was a change in the Liberal Democrat spokesperson for today’s debate. I congratulate my right hon. Friend the Member for Gordon (Malcolm Bruce) on initiating the debate at this most opportune time and on raising a number of issues that affect my constituency and that of our hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) as much as they affect his.
The problem affects not only rural and remote areas, but urban areas. Indeed, the difficulty of dealing with energy inefficient homes is particularly acute in the private rented sector, where the cost of improving the efficiency of a home falls on the landlord, but the benefits accrue to the tenant and to the country as a whole through the reduction in carbon emissions. Particularly in houses in multiple occupation, the incentive to invest and contribute capital is sometimes not supported as well as it could be by the current systems.
First, I shall discuss families in fuel poverty and their difficulty in budgeting for fuel costs. Such families are faced not only with variability in the weather—we have just experienced one of the coldest winters for many years, when people needed to use more energy and to produce more heat—but with the incredible volatility of energy prices. As a consequence, it is very difficult for them to budget for their energy needs. People in fuel poverty spend more than 10 per cent.—or, if they are in extreme fuel poverty, more than 20 per cent.—of their income on fuel. Fuel takes up so much of their income that any changes in that amount have a disproportionate effect on the money that they can spend on other things.
The Government have a duty to consider that matter in some way. I know that the Minister cannot influence the weather, although he may wish to do so in the future if he ever gets the opportunity again, but providing some stability in energy prices so that people can budget much better would be to their advantage and would reduce the impact of fuel poverty. There are ways in which that can be done, for example, social tariffs, to which I may return, but first I shall pick up some of the points that my right hon. Friend the Member for Gordon made, particularly about hard-to-treat homes.
The people who live in such homes often suffer from a triple whammy because their homes are not only an older type of property, with solid walls and other types of construction that make it difficult to improve efficiency, but they are off the gas mains. The people who live in such homes suffer many accumulated problems of fuel poverty. An issue that perhaps has not been discussed very often is listed buildings. Double glazing was raised in another context, I think, but it is often not allowed in listed buildings because of the planning process, so one form of fuel efficiency is often ruled out for such buildings. However, many innovative builders and carpenters are designing double-glazed windows that reflect the architectural traditions of listed buildings and could be used, so perhaps the Minister could intervene with his colleagues in the Department for Communities and Local Government to see whether something could be done along those lines.
My right hon. Friend mentioned external and internal cladding, but one can imagine the planning difficulties that would be incurred if people set about altering the appearance of listed buildings. That is one problem that has not been addressed to any extent. I live in a listed building—perhaps I should have declared an interest—and recently had to apply for planning permission to install solar panels. Although that process has been eased recently, it certainly was not an encouragement to involving myself in that type of improvement.
Households that are off mains gas can experience problems. Households in my constituency use not only oil, LPG and wood, but coal, because many of my constituents live in old mining communities and for a long time benefitted from free coal because they worked in the coal industry. Not many of those families still benefit from that, but the widows of former coal miners still have coal delivered on the street outside their house and have to get their sons or nephews to cart it round the back so that it can be used. There is a range of fuels, but all are much more expensive than mains gas. Indeed, in a little village in my constituency, Garth, I came across a group of elderly people living in local authority accommodation who had decided to switch off their LPG supply because its sheer cost made it impossible for them to heat their homes. The homes were poorly insulated and they were putting their health and lives at risk as a result.
What can be done? My right hon. Friend mentioned extending the gas mains, which really would be a long-term solution for fuel poverty for so many people. However, as the hon. Member for Stroud (Mr. Drew) pointed out, the cost to individuals of having the gas mains extended is often beyond their means, and the investment would probably not produce a return in their lifetime, or even that of their children if they live in the same home after them. Will the Government consider either encouraging or subsidising gas companies to achieve a greater reach for gas mains? As I said, that would be a long-term solution to the problem.
I thank the Minister for that comment, which indicates that the Government recognise the value to the fuel-poor of being on mains gas.
I would like to refer briefly to a concern about LPG supply that I raised with the Minister during Energy and Climate Change questions. Following my predecessor’s work on competitiveness in the LPG industry and pressure I put on the Office of Fair Trading, it conducted an investigation into the competitiveness of the LPG market and found several practices that made it difficult for families to change their supplier because of the need to change the bulk tank and other fittings associated with the supply. Regulations have now been brought in that ensure that customers can now shop around between suppliers and get much better deals.
The community in another village in my constituency, Llanspyddid, were able to get together and reduce their energy costs substantially by getting competitive quotes from different companies. My concern is that that is available to those in the know. One thing that the Department of Energy and Climate Change could do is publicise the fact that people can shop around for their LPG supply. I do not think that the companies are proactively competing against one other by advertising better prices, and certainly any improvement arises only when the customers are proactive. Any raising of awareness or advertising of the possibility of changing supplier will make a real difference to people on LPG supplies.
My right hon. Friend the Member for Gordon and my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey both referred to cold weather payments, and we certainly all have our stories about those. The weather station that serves the Ystradgynlais area is situated in Swansea, which makes it sound as though it is by the seashore. Certain parts of the Swansea valley area are by the sea, but parts of it are back up in the mountains in mid-Wales—Coelbren, for example, is about 1,500 feet above sea level and is very exposed. Cold weather payments are not triggered for those living there because the weather in Swansea is more benign and tropical.
We have been campaigning to have the weather station moved to Sunnybridge, which is often on the weather map as the coldest place in the UK. That would be much more beneficial in our area. I was talking to a Gurkha the other day who said he had trained in the Arctic, which was cold but dry, in the jungle, which was wet but warm, and in Sunnybridge, which was cold and wet, he needed a high degree of personal organisation to survive. I recommend it as the site for the weather station that should be consulted in those matters.
I will finish my remarks by referring to social tariffs and the ability to switch between suppliers. I remember participating in a debate in this Chamber on a similar topic, during which we discussed the ability to switch supplier. Of the several Members present in that debate—more than are present today—my hon. Friend the Member for Twickenham (Dr. Cable) and I were the only ones who had not switched, and we concluded that it was an age thing, as we were brought up in a time when we received energy supplied by a nationalised company and did not shop around among other companies. It would be interesting to know which people do and do not switch by age band, and which of those people have access to IT equipment, which makes switching much easier. I am sure that we have all heard horror stories from constituents who have attempted to switch and then found that they were billed by two companies at the same time. All those deterrents make people cautious about whether they would benefit from switching.
Social tariffs are very complex. I looked recently at a few quotations from companies, and they have different standing charges and different prices for the first 100 units and for the rest of the units, so it is difficult to put those details together and know whether a particular tariff would benefit the consumer. If there were some standardisation of the quotes for tariffs, that would make the process much easier, and people would be able to switch with much more confidence and receive greater benefit.
On social tariffs, and further to the point made by the hon. Member for Castle Point (Bob Spink), who is no longer in his place, I have figures for an average household consumption of 4,200 kW of electricity per year. Paying by standard credit, that would cost £977; by direct debit, £902; but by prepayment, £1,049. The people who use prepayment tend to be the most vulnerable: they have more difficulty budgeting for their fuel costs, yet are penalised the most.
The sharing of data between the Department for Work and Pensions and the electricity companies on those who should qualify for social tariffs would be beneficial. There has been some talk of smart meters, and I am advised that there are super-smart meters that automatically change the supply to the most advantageous supplier for the customer’s circumstances.
This is a subject that we all have experience of in our own lives, but our most vulnerable constituents have the most difficult experiences. I have read the Government’s proposals for green loans, as well as the Conservatives’ proposals. They have many good ideas, but we need to implement them and prioritise them, so that the most vulnerable and needy in our communities—the ones who suffer from ill health and are at risk of premature death—get the greatest help.
I congratulate the right hon. Member for Gordon (Malcolm Bruce) on securing the debate. He has an excellent track record and is widely respected in the House for his knowledge of the subject and the wider agenda. This has been an excellent debate, albeit the contributions have come from one party and from outside England; nevertheless, some sensible ideas and analysis have been offered by the right hon. Gentleman and the hon. Members for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) and for Brecon and Radnorshire (Mr. Williams).
As well as the points about heating oil and the difficulties of the most vulnerable, and some excellent comments on the potential of wood fuel, with which I thoroughly concur, the right hon. Gentleman’s opening remarks were absolutely spot-on. He said that, sadly, after 13 years of Labour Government, it is groundhog day on fuel poverty. In absolute terms, we are back to where we came in, despite the money that has been spent and the progress that we thought had been made. It is depressing that we are back at the bottom of the tall mountain that we have to climb to overcome fuel poverty.
Simply business as usual is not an option if we really want to crack the problem and make progress on a far greater scale and to a far more ambitious timetable. That is why my party proposes a completely new and radical approach to fuel efficiency. The measures to date have not been up to the scale of the task, not for lack of good will on the part of the Government, nor for a lack of interest in the agenda, but simply because their policies have not been up to it. I am therefore grateful to the right hon. Gentleman for providing an opportunity to set out in a little more detail how we would tackle the twin challenges of carbon emissions and fuel poverty that domestic energy efficiency throws up.
As Members know, carbon emissions from the UK’s housing stock are some of the worst in Europe. Without urgent action to reduce emissions, we will struggle to stay on track to satisfy the targets implicit in the Climate Change Act 2008 and the recommended emissions reduction trajectory laid out by the Committee on Climate Change. Moreover, fuel poverty is a ballooning social justice crisis throughout the UK. The average gas bill has increased by 169 per cent. since 2003 and the average electricity bill has nearly doubled. Ofgem predicts that energy bills will rise by another 60 per cent. by 2015 and, with 40,000 people pushed into fuel poverty by every percentage point rise in fuel costs, it is clear in the statistics that we have a serious problem indeed.
It is also clear that there has been systematic failure in this Government’s efforts to tackle the problem with the policy toolkit that they have had available. As right hon. and hon. Members have said, there have been too many schemes. They have often been well meaning in themselves, but the sum total of the parts is not a coherent and ambitious whole. There have been too many stop-go initiatives, too much talking and not enough action.
The Government had promised that, at the turn of 2010, no vulnerable household would be left in fuel poverty, yet current estimates suggest that nearly one fifth of UK households were still spending more than 10 per cent. of their income on energy—the key definition of fuel poverty—at the same time that British Gas announced a surge in profits. The Government have relied for too long on falling wholesale energy prices to reduce fuel poverty and have not taken any real, concrete steps to tackle the challenge on a much larger scale. The average fuel bill is now a shocking £1,300 per year, yet competition in the sector is a fraction of what it was when the industry was privatised, nearly 20 years ago.
For off-grid gas customers, the problem is particularly acute, as has been mentioned. Heating oil and electric heaters compare poorly with even fairly old gas heaters in terms of value for money, and off-grid properties tend to be less efficient and harder to insulate as they are often older, single-skinned rural buildings, or, in the case of my constituency, static homes. There is an urgent need to address energy consumption in those often vulnerable households.
Rising bills have been compounded by other Government failures. The value of the winter fuel payment has decreased in real terms. When instigated, it covered one third of the average bill; now, it barely covers one fifth. In addition, the Government have slashed the budget for their Warm Front programme. Whatever concerns we may have about the programme’s effectiveness, the bottom line is that the budget reduction from £1 billion to £810 million this year will lead to 50,000 fewer vulnerable households receiving assistance from that programme this year.
Yes, but, as I understand it, the money announced in the pre-Budget report was exactly that—it will not do anything to help vulnerable people this winter. To put the figures into context, the Treasury collected £9 billion of VAT receipts from UK utilities and £1.2 billion from domestic fuel customers last year.
Rising bills have been fuelled by the Government’s lack of a credible energy policy. Allowing utilities to sweat assets and the failure to bring a greater strategic focus to infrastructure renewal have left the UK a net importer of gas with a looming energy crunch. That, combined with only 14 days’ gas storage, leaves the UK vulnerable to spikes on the spot market, gives utilities a fig leaf for raising electricity bills, and is a particular threat to off-grid consumers.
The solution to many of those challenges is simple, straightforward and pays for itself: greater energy efficiency. In the home, that means energy saving and insulation. Some 33 per cent. of the heat lost from an uninsulated house is lost through the walls. One could save around £90 on energy each year in an average home by insulating wall cavities alone. That would save about £720 million of energy a year, or 9 million tonnes of carbon—enough to power 1.8 million homes for the same period.
Despite the clear economic and social advantages of increasing energy efficiency at scale, we are not moving at the scale and pace that is needed. That is why, a year ago, the leader of my party announced an energy refit programme, the Conservatives’ green deal, that would establish a new model with a far greater sense of ambition for delivering energy efficiency throughout the UK—a new way of tackling this embedded social and economic problem. Under the Conservatives’ approach, households would get instant access to measures to make energy efficiency improvements, the cost of which would be paid back, not by the householder, but by the owner of the property who pays the electricity bill over 20 years through a surcharge on bills, just as transmission charges, for example, are currently levied on an electricity bill. That would guarantee immediate savings, so homeowners would see not only an improvement in their quality of life, but an immediate saving. With a street-by-street roll-out in partnership with local authorities and by targeting vulnerable households, that policy will also bring together the dual priorities of reducing fuel poverty and reducing carbon emissions, but on a far more meaningful time scale than has been achieved by the Government over the past 13 years.
When we first set out the principle of our energy efficiency measures, they were then routinely rubbished by Labour Ministers. The Secretary of State for Energy and Climate Change dismissed as a
“a bad combination of…reheated and…uncosted”
policies. They pooh-poohed the figure of £6,500, saying that it could not be afforded, yet the beauty of our scheme is that there would be no overall charge to public funds. The scheme will be privately financed by banks and investment funds; I have met many of their representatives and they are keen to enter this new, exciting market. But one year on, it is no surprise that the Government have realised that they simply cannot go forward with their own policies and have produced, I am glad to see, something that is remarkably similar to the Conservatives’ programme, with a few tweaks at the edges. Imitation is the sincerest form of flattery, but it is disappointing that it has taken the Government 13 years to do that. Now in their death throes, in their last weeks in Government, they have finally had to admit that their policy has not worked and they need to come up with something else. However, that is welcome in so far as it means that, in the new Parliament, there will be much greater consensus on the way forward on tackling this urgent problem.
I am concerned that the Government have not really had a genuine change of heart and that this is just a political ruse. Their policy is undermined by its being twinned with renewable energy and renewable energy feed-in tariffs. Burrowing into the Government’s statistics, their own anticipated forecast and target is that by 2020 only 1.6 per cent. of our energy will come from decentralised energy sources supported by feed-in tariffs. If that fact is married to the “Warmer Homes, Greener Homes” strategy, that is a pathetically unambitious and impoverished figure that shows that that is not a genuine adoption of the agenda but is merely a political manoeuvre to try to parry a radical proposal from the Conservatives. I am sorry that the Government are not really, in their heart of hearts, keen to embrace this agenda, but I welcome any moves towards it.
I want to give the Minister time to reply to the many points that have been raised, but in so far as we see any consensus in the Chamber today, there is consensus on business as usual not being good enough. We are not making the progress that we need to make. We need fresh ideas, new thinking and a far more ambitious time scale on implementation. We need to embrace new technologies as well as new financing models. I look forward to hearing what the Minister has to say. Ultimately, the only way that we are going to get to grips with this agenda to do justice to the fuel-poor as well as to our carbon transformation is to sweep away this tired, end-of-life Government.
I congratulate the right hon. Member for Gordon (Malcolm Bruce) on securing an important debate on a important subject, and on his thoughtful, constructive approach to it, which was in stark contrast to that of the previous speaker, who turned it into a party political argument.
In respect of the point made by the right hon. Member for Gordon partway through his speech—that real people really die in the cold of winter if we do not get this right—eradicating fuel poverty is an important challenge to Government. That is my responsibility in this Government and I take it seriously.
I prepared what I think is a brilliant speech to respond to the debate, but I did so before I heard hon. and right hon. Members speak. It would be a much more constructive use of my time, certainly to begin with, to try to answer the points that were raised, so that is what I intend to do.
The right hon. Gentleman mentioned the trend in fuel poverty. Back in 1996, 6.5 million households were in fuel poverty. By 2003, partly because of benign global prices, partly because of the system of regulation of energy companies and partly because of the first successes of some schemes that I may have time to mention later, that figure decreased to 1.5 million, which is a huge change. Then came four years of incredibly high price rises. The hon. Member for Bexhill and Battle (Gregory Barker) mentioned that huge growth in prices in quite a short time. However, no hon. or right hon. Member has said that there was something that the British Government could do about worldwide oil prices and their knock-on effects on energy prices around the world, but clearly that blew us off course in eradicating fuel poverty in this country.
The result of all that is that the 2007 figures—frustratingly, for me, those are the latest official statistics—based on all the information having been collected and assessed, show that 4 million households in the United Kingdom are in fuel poverty. Doubtless, prices continued to rise after 2007 and, although there was a fall-off more recently, which I might mention in a while, the figure is probably higher, not lower, as we speak. I take seriously my responsibility for trying to get that figure down again, rather than have it go up, despite what happens to global prices.
I acknowledge what the right hon. Gentleman said at the outset about certain properties. My hon. Friend the Member for Stroud (Mr. Drew) also mentioned what happens when we have taken all the quick wins and insulated all the lofts and cavity walls. That has been done to great effect over the past 12 years—perhaps I will be able to provide some statistics later—and by 2015 we aim to insulate every loft and cavity wall that can be filled, provided that the owners and occupiers of properties permit the work to be done.
When all those easy wins have been achieved, we are left with the harder-to-treat properties, many of which, as the right hon. Member for Gordon said, have solid walls with no cavity. It is incumbent on us to find the solutions to deliver sufficient energy efficiency measures to those properties to bring them up to a good standard of energy efficiency.
In the past, as the right hon. Gentleman said, the answer has been a fairly cumbersome system, usually external wall cladding, which sometimes, although I should stress not always, leaves quite a visual impression on a property that most people do not like. Developers have been working hard on modern forms of external cladding that are much easier on the eye and, crucially, on clever technologies and innovations in technology for internal-wall cavities that can be created with a modest loss of space inside the property, which is key to consumer acceptance of the technology. I do not know whether the right hon. Gentleman has visited BRE’s research centre at Watford, as I have, and seen some of the work that is going on to develop such technologies, but that work is in hand.
The right hon. Gentleman mentioned the Government’s strategy that was launched yesterday. When I say “HEM” from now on, that stands for the household energy management strategy. He is right to ask for all the details of that strategy and when it will take effect. The point about the strategy—given sufficient time, I will mention the works that we are doing up to 2012—is that it is our view of what happens from 2012 to 2020 to improve properties, especially those that have so far been regarded as hard to treat.
The right hon. Gentleman asked about local authorities working independently and not being co-ordinated or given the tools to do the job. HEM gives local authorities a central role in co-ordinating our activities to tackle fuel poverty and make properties more energy efficient. He referred to a woman who said that what she really needed was accurate advice from someone. HEM provides the solution of a new cadre of certified and well-trained advisers who can provide independent advice on all the options.
In the meantime, I do not want to diminish in any way the excellent advice given by the Energy Saving Trust, which is funded by my Department and provides a national system of call centres to provide advice. On the internet, through our branded website, actonco2, people have access to accurate and independent advice from the Energy Saving Trust.
The right hon. Gentleman asked about watching out for cowboys, whether installers or those who offer products, and it was suggested that there should be a reliable system of certification. In the HEM strategy, we discuss how we intend to provide a reliable system of certification. I hope that he can see how the strategy in each area will be valuable, although I acknowledge that, as he said, it will come into effect in coming years and is not in effect today.
The right hon. Gentleman made an important sally on the significant issue of properties that are off the mains gas grid, most but not all of which are in rural locations. I shall start with his request for statistics. He said that 1 million properties in Scotland are off the gas grid. If so, my figures are not sufficiently accurate, so I must be careful. According to my statistics, in 2007 in Scotland, 278,000 properties were off the mains gas grid, which is 12 per cent. of the total. In the same year in England, 2.6 million were off the grid, representing 13 per cent. of the whole. In Wales, 230,000 were off the grid, which is 19 per cent. of the total.
The picture in Northern Ireland is very different. There is effectively no mains gas grid, and 621,000 properties are off the grid, which is 88 per cent. of the total. I hope that those statistics are helpful in showing the scale.
The right hon. Gentleman asked what we are doing to help people who are off the mains gas grid to keep the cost of keeping their homes adequately warm at a reasonable level. I mentioned the drive by the regulator, Ofgem, to incentivise the energy companies to extend the mains grid to 20,000 more households that are in fuel poverty during the current five-year price control round. That is one measure.
Under schemes such as CERT—the carbon emissions reduction target, which is the obligation on energy companies to deliver energy efficiency measures—there is no reason why properties off the mains gas grid should not be helped, but I take to heart the point made by the right hon. Gentleman that the Government should direct energy companies to do more work in such areas, because, as my hon. Friend the Member for Stroud said, they too, driven by volume targets for reducing carbon dioxide emissions, have taken the easy wins, which are often in concentrated areas such as urban areas. Perhaps they have not given the necessary attention to that in the past. Under HEM, as we continue the obligation on energy companies, we intend to take more power to give directions on the sort of work that we want done.
As an example of how we are already flexing our muscles, we recently consulted on extending CERT from 2011 to the end of 2012. In the consultation, we asked for people’s views on directing the energy companies to do more of their work as energy efficiency measures—no more free light bulbs posted to people’s homes—and to aim more of its work at a super-priority group, which we intend to define as those most in danger of being in fuel poverty to have more work done to their properties under CERT. That is an example of the more activist approach that the right hon. Gentleman urges on me.
Very recently, in September, we launched CESP, the community energy saving programme, which is the next step on from CERT and our publicly funded programme, Warm Front. Under CESP, we ask energy companies, local authorities and community groups to form local partnerships and go house by house, street by street, to improve the energy efficiency of every property, whether hard to treat or not. CESP has been a good forerunner of what we expect the landscape across all those schemes to look like post-2012.
Two of the first schemes announced by British Gas were in Glasgow and Dundee in Scotland, but they are urbanised areas. My ambition, as a Minister with a keen interest in rural communities, is to see some CESPs formed in rural areas. There is no reason why they should not be, if energy companies and local authorities form partnerships in such parts of the country.
I urge right hon. and hon. Members who have taken part in the debate to go back to their local authorities and to use their contacts with energy companies to ask why there is no CESP in their area. That is another example of what we can do for such areas.
The feed-in tariffs that will start in April are an incentive for people in rural areas to consider microgeneration as a source of energy, and now as a source of income as well. In 2011, there will be a renewable heat incentive, which will be hugely significant, especially in rural areas and for people off the mains gas grid to take their energy from renewable sources of heat, and to receive a reward from the Government for doing so. That is a strong message to people, as is that about microgeneration.
The right hon. Gentleman asked what efforts are being made to promote microgeneration. This Government had the first ever microgeneration strategy in 2006. We are renewing and refreshing it to deliver an up-to-date microgeneration strategy. There is a certification scheme for the goods and services under microgeneration, and grants are available for people under the low-carbon buildings programme to fit some forms of microgeneration to their properties. There are already encouragements for microgeneration.
First, will the Minister answer my question about the range of products available under the microgeneration certification scheme? My point was that they are more expensive. Secondly, will there be some sort of retrospective allowance for people who have already invested in microgeneration to benefit from feed-in tariffs?
I will deal with those points. On the range of products, when we go from no certification to certification—there is already a certification scheme for microgeneration—it takes time to build up sufficient products and sufficient people with the skills to carry out the installations, but we are determined to drive that forward. On a different point, the right hon. Gentleman said how important it is that there are certification schemes to avoid the cowboy scenario. We need to do the work, and I am keen to do so.
I had not quite finished explaining what we want to do to help people who are off the grid. The social price support, about which several Members spoke approvingly, means that there would be money off the bills of fuel-poor households for their electricity. Generally speaking, people have an electricity supply wherever they live, so off-mains gas grid customers will have the benefit of social price support if they are in danger of fuel poverty.
For those who must pay for heating oil or liquefied petroleum gas and have difficulty with the up-front cost of bulk buying, National Energy Action is carrying out work at the request of the Department of Energy and Climate Change to see whether there are ways—for example, through credit unions—to help people with up-front costs. That could be a significant development.
On feed-in tariffs, our judgment is that people who decided to fit renewable energy sources before we announced the scheme based their decision on the scene as it was at the time. They may have received a grant from the low-carbon buildings programme, but they did their own calculation, so we do not feel too guilty about the fact that the system is to drive more investment in future, not to reach back to reward those who based their judgment on the situation at that time.
The right hon. Gentleman also asked about the location of weather stations and cold weather payments. The Department for Work and Pensions reviews the locations every year and takes into account the representations made by hon. Members and the public. I remember statements by that Department of changes that it had made in response to representations. I urge right hon. and hon. Members to make their representations.
I have so much more to say just in reply to right hon. and hon. Members’ questions, but on the issue of confusion, no one has mentioned Consumer Focus, the consumers’ champion. I am keen to support it so that everyone talks about its role—its help is very significant.
Isle of Wight NHS Primary Care Trust
I am grateful to have secured this debate on the Isle of Wight NHS primary care trust and its regulatory burden, and I welcome the Minister who is going to respond.
As hon. Members are aware, nationally set targets and inspections are seen by the Government as the best way of ensuring high-quality patient care in a primary care trust. Too often, however, such targets are counter-productive; visits by patients to hospitals and doctors are important, not visits by inspectors. Targets are regarded as a burden to be shouldered rather than a catalyst for best practice, and national priorities get in the way of effectively responding to local needs.
The NHS is a national organisation, but health care is delivered locally whether in the surgery around the corner, the hospital in the larger town or the ambulance anywhere, any time. The population of the Isle of Wight is in excess of 130,000 people, and less than half that number would usually support a district general hospital. Let me be clear: there are no road or rail links to the mainland. Patients transferring off the island are dependent on the weather, so St. Mary’s hospital in Newport is essential. When health care in the south-east was reviewed four years ago, it was recognised that the island’s health service needed to be organised in a different way. Established in October 2006, the Isle of Wight NHS primary care trust is a single organisation that combines the commissioning function and the provider function for all health care on the island. That is unique in the NHS in England.
On the mainland, ambulance, hospital, mental health, community, learning, disability and primary care services are the responsibility of separate trusts. On the island, however, they all fall under the remit of the Isle of Wight NHS PCT. For patients, the merits of such a unitary approach are borne out by the evidence, which suggests that fewer patients are referred to secondary care on the island and that more patients return to their homes following hospital discharge. Care for those with long-term conditions is of a very high standard.
In a recent survey, 82 per cent. of islanders said that they were satisfied with the local NHS; 90 per cent. were satisfied with the local ambulance service; and 92 per cent. were happy with their GP. Indeed, in the Care Quality Commission’s 2009 annual health check, the Isle of Wight was one of only three PCTs in the country to receive an “excellent” quality rating.
I can speak personally about the outstanding quality of care because in 2006 I suffered a stroke. My recovery—and the fact that I am standing here today—is testament to the hard-working doctors and nurses on the island, and I would like to pay tribute to the dedication of all health care professionals on the Isle of Wight. Without them, our unique system of health care would not be possible.
Through working in partnerships, the PCT delivers a comprehensive and cost-efficient service, but its unique nature has not been recognised in the national inspection regime. We have a single Isle of Wight NHS organisation that should be recognised with a unified set of inspections and targets. Instead, however, each part of the whole is held to account as though it were autonomous, and is monitored separately. Although that may be right for other places, such an approach is not valid on the island and leads to an unhealthy level of targets and inspections being imposed on a single health authority. That disproportionate regulatory burden threatens to undermine the benefits of a joined-up approach.
The island’s PCT receives up to 70 external visits from 20 different regulators or monitoring bodies. No other PCT or trust is subject to such intervention. Furthermore, for 2010 and beyond, the Care Quality Commission has proposed 13 special reviews for NHS trusts, and it is likely that all of those will apply to the Isle of Wight’s PCT. It could get to the point where it becomes necessary to employ people full time simply to satisfy the demands of bureaucracy. That represents money that could be better spent on the front line.
In his response, will the Minister tell me why such a level of visits is necessary, and why they cannot be more effectively co-ordinated? Nationally, each individual trust is subject to separate targets. For example, acute trusts currently have 10 existing and 14 new national priority targets to reach. Mental health trusts have 12 national priority targets while learning disability trusts have five. Ambulance trusts have four existing and six new national priority targets, while primary care trusts have 14 existing and 24 new national priority targets to meet.
Although I do not agree with such numbers, for the sake of argument I accept that such a division of targets is necessary on the mainland. However, on the island it means that our single PCT has 28 existing and 61 new targets to achieve—89 in total. Such a high number does not apply to any other trust or PCT, and such excessive national targets simply do not correspond in the case of the Isle of Wight. Will the Minister indicate whether such a level of targets is necessary for an organisation that exists outside the organisational norm?
More generally, I question whether such a level of targets really caters for the best interests of patients. We need only look at the tragedy in Staffordshire, where managers were motivated more by central targets than by patients who needed treatment. The Government must ensure that targets help to provide for patients’ needs rather than taking money away from front-line care.
On the Isle of Wight, the burden of regulation not only places demands on the time of professionals that could be better spent treating people, but imposes a heavy financial burden. I am told that all NHS trusts and service providers will have to register services with the CQC by October this year. For the Isle of Wight PCT, that means 18 different service types across 12 different locations. Such a level of bureaucracy for a single organisation is bad enough, but from 1 April 2011, an annual registration fee will be required for each service provider. The Isle of Wight PCT is an amalgamation of many local providers, and such fees could therefore have acute financial consequences. Will the Minister give me an assurance that when the new fees system is put into practice, he will look carefully at the fees that the Isle of Wight PCT will have to pay?
On the whole, the Isle of Wight PCT seems to be being penalised for its unique nature. Over and over again, we see the organisation contorting to fit into the inspection regime when it is the system that should adjust and adapt to the organisation’s circumstances. Will the Minister review the level and type of regulations for such a unique organisation and, in doing so, give scope for a more flexible approach? If we attempt to push inappropriate national criteria on a local organisation, we run the risk of undermining the benefits to local people.
While I have the Minister’s ear, I should like to mention one other matter. On 4 November 2009, the Prime Minister gave me an assurance at Question Time that the excessive cost of guarding prisoners receiving health care outside prisons would be dealt with. I was surprised to hear from my local PCT that it has heard nothing further from the Government on the matter. Will the Minister kindly ensure that that, too, is followed up?
The Isle of Wight health service is full of dedicated professionals who want to be able to get on with what they are paid to do—caring for my constituents and visitors to the Isle of Wight, not filling in endless forms to meet meaningless targets.
I congratulate the hon. Member for Isle of Wight (Mr. Turner) on securing an important debate. Regulation is about ensuring that we maintain the quality and standards of the national health service throughout the country. We know very well that a failure to ensure that quality and standards are maintained can lead to problems such as those at Mid Staffordshire. We do not want a repeat of those problems anywhere in the country or, indeed, a repeat of the issues that we have seen at Basildon and one or two other hospitals, which, although they were not on the scale of the Mid Staffordshire debacle, were certainly worrying for the health service as a whole.
We have a health service that throughout the country provides, by and large, a good quality of care for patients. Individual examples of hospitals that fail always hit the headlines and may contribute to a disproportionate public perception of the NHS. However, as a result not only of the standards of professional competence for health professionals and managers in the health service, but also of regulation, by and large, the standard of the health service is good across the country as a whole. We need to ensure that we keep monitoring the quality of that health care and that we have the proper criteria and mechanisms to do that.
The country differs greatly. There are various local frameworks for the NHS and methods of organisation to which we cannot possibly address a national system of regulation. The Isle of Wight is in many ways almost unique in how it delivers health care. The hon. Gentleman is right that the standard of care provided on the Isle of Wight is in the category of excellent. The way in which it is delivered is a result of the particular circumstances. Like many people, I am familiar with the Isle of Wight from going on holiday there—I cannot remember on how many occasions, but it is a significant number. It needs to be recognised that because of that situation, the Isle of Wight has to deliver health care in a particular way, and it does so very well indeed.
I can well understand that the health professionals and managers and those who have to deal with NHS finance are concerned that the way in which regulation occurs on a national basis does not accommodate the Isle of Wight’s particular circumstances. There is a strong argument that that is the case and the hon. Gentleman has very eloquently put it. Other parts of the country might advance similar arguments that the way in which regulation occurs does not fit their circumstances. I am not sure that they are all quite as unique as the Isle of Wight. None the less, there are many different ways of doing these things. If we had a national system of regulation that was tailored to each area, we would be getting into a very expensive and complex system of regulation, and we cannot do that, but that does not mean that we cannot help the Isle of Wight. I shall come back to that issue in a moment.
The hon. Gentleman raised the key criteria by which regulation occurs—targets, for example—and asked whether there should be quite so many targets. We are conscious that some health professionals have said to us, “Look. Targets are important, but there are too many and you must not only put them in but, when they have done their time, take them out.” We accept that and are examining some of the targets on waiting times. Some of those are, in a sense, bypassed because the waiting times are now so short that we have hit the target and gone well beyond. Therefore, the health service does not need some of those targets, but when we have a national health service, we do need to have national minimum standards across the health service as a whole, particularly on waiting times—four hours in A and E, 18 weeks for an operation and two weeks to see a cancer specialist after referral by a GP. Those are basic standards of health that the health service throughout the country should provide.
When we have gone through a period during which the taxpayer has put in vast amounts of extra money—it depends how we look at it, but there has virtually been a tripling of the budgets of the health service—it is important that the taxpayer knows that something tangible and measurable is coming out of that extra investment and that it meets a basic minimum standard and is better than what was provided in parts of the health service in the past. That is why I am a defender of targets. We now wish to move from managerial targets to guarantees for individuals, so that each individual would have the right to enforce a guarantee in their own case. I believe that we could do that in fairly short order if, perchance, we were to win the general election—a matter for the electorate. I am a strong defender of those measurements of what we, as taxpayers, are receiving for the extra investment and higher taxes, and it is higher taxes that we pay to ensure that the NHS is properly funded.
We are talking not just about the NHS: in areas such as the Isle of Wight, there are a number of other services, which are linked up, so a lot of targets end up being built up for the ambulance service, the hospitals and primary care services. I understand that, but we are putting in a lot of extra money. Therefore, there is a justification for those targets and for applying them on a national basis, so I make no apologies for saying to the Isle of Wight, “You, too, as an authority, need to comply with the basic minimum standards of the country as a whole.”
The question then is how we ensure monitoring of compliance and the overall general standard of health care and other services provided, and whether the system of regulation is proportionate to the particular circumstances in a place such as the Isle of Wight. I share the hon. Gentleman’s concern that regulation, particularly in the area that he represents, should be proportionate and should recognise the particular local circumstances, but at the same time it needs to be national and should not become so diversified that it cannot properly compare services throughout the country. Everyone should know basically what is being regulated.
Our new regulator, the CQC, will cover a much broader range of services than previous regulators, so we have brought different aspects of regulation together. The CQC has adopted what is called the gate-keeping role, which requires it not to impose a whole series of regulation inspections and visits in a disjointed and ad hoc way, with different groups arriving at different times and disrupting everyone. Instead, it should take a reasonable and proportionate view of how it regulates the system as a whole. In a sense, it should also gate-keep itself so that it does not carry out inspections and reviews in a way that imposes a disproportionate burden on particular areas.
The CQC has become aware of the problems of the Isle of Wight. That is due in no small measure not only to representations from the various local health bodies, but to the fact that the hon. Gentleman has made sure that the concerns of the Isle of Wight are raised. The CQC will seek to apply the gate-keeping role and to be proportionate and reasonable in carrying out its regulation. I cannot guarantee the hon. Gentleman that there will not be a series of regulatory visits. That is mainly because different regulators regulate different things, so they cannot all turn up at the same time, do the same regulation and disappear at the same time.
There will therefore be a need to manage things in a way that is reasonable for both sides. That will allow regulators to take a view that there are particular circumstances in the Isle of Wight and that they need to gate-keep the regulatory burden to ensure that it is not disproportionate. On the other hand, it will allow people in the Isle of Wight to recognise that regulation in its different forms may impose a burden that is unwelcome, given that the Isle of Wight is in the excellent category, but that that needs to happen to ensure that there is national regulation.
One benefit of being in the excellent category, and one way in which we have changed things recently, is that regulation is much more risk based. Every hospital will have a visit every two years, but some will have visits more regularly—every few months—because they need them and are regarded as high risk. However, given that our approach to regulation is risk based, some hospitals will have fewer visits because they are in the excellent category. High-quality services of the kind that the CQC recognises, at this point at least, in the Isle of Wight should need less regulatory intervention than lower-quality services.
As we all know, services can change, so regulation must change with them. An excellent service can become a not-so-good service, so services must continue to be monitored and regulated. At the same time, where there is a level of excellence in a service, we need to ensure that the regulator can say, “We don’t need to visit them quite so often. When we do visit, we can perhaps do it in a more appropriate way, because there is less of a problem there from what we already know.” If things changed, however, and the service deteriorated, the level of intervention and the unannounced visits and so on, which are needed if there is a problem, would necessarily increase. What I have said is not, therefore, an indefinite guarantee for the Isle of Wight; it simply recognises that if a service is seen as high quality and can demonstrate when visits take place that it remains high quality, the number of visits need not be as high as they would be otherwise.
That is a positive message for the Isle of Wight. It has developed a unique approach to the health service that is appropriate to it. As the hon. Gentleman said, 92 per cent. of patients admitted to St. Mary’s hospital in Newport were happy with their treatment, although the figure that I have is 93 per cent. We can quibble over the 1 per cent., but the public seem very happy by and large with the way in which services are provided. I hope that the standard in the Isle of Wight will remain one that requires a proportionate system of regulation.
The hon. Gentleman asked me to take up the issue of guarding prisoners outside prison, and I will make some inquiries on his behalf about what is happening on that. Having set out some of the issues, however, I hope that I have dealt with most of the points that he raised. In those circumstances, I need not detain you any further, Mr. Cook.
[Frank Cook in the Chair]
It is a pleasure to serve under your chairmanship, Mr. Cook, as I have on a number of other occasions. As this is likely to be my final appearance in Westminster Hall, I am particularly pleased that you are chairing our debate. I am sure that you and other Members present share my sadness at the news of the death of Michael Foot, a former Labour party leader and a great parliamentarian.
Right hon. and hon. Members may have noticed the slightly convoluted history of the title of this general debate. Suffice it to say that the debate has been secured. I am pleased to see my hon. Friend the Deputy Leader of the House in her place, ready to respond to the debate. Although it appears that the House has consigned all power over MPs’ communications expenditure to an outside body—the Independent Parliamentary Standards Authority—at least for the brief remainder of this Parliament my hon. Friend has ministerial responsibility for the winding up of the communications allowance, hence the title of the debate.
I find it surprising that the House should have given over responsibility for something so basic to the democratic process as a Member’s communications with his or her constituents to an outside body—one that has relatively little experience of political struggle on the ground. We already know to all intents and purposes what that body has decided about the future of communications expenditure: it has trodden in the footsteps of Sir Christopher Kelly’s Committee on Standards in Public Life in its, in my view, somewhat cursory treatment of the communications allowance. I shall say a little more about the Kelly report shortly.
The intentions of IPSA are set out in its recent consultation document. There will be no more communications allowance; expenditure will be allowed only on advertising for constituency meetings and advice surgeries and on contact cards. The document states:
“All other currently available types of communications expenditure will be excluded”,
so there will be no more annual reports, and no more websites.
Not at this early stage. I have plenty to say, and I shall yield the Floor to Opposition Members once I have developed my argument a little further.
The communications allowance was ushered in by the Puttnam Commission on the Communication of Parliamentary Democracy in 2005, introduced as recently as April 2007 and endorsed by the Senior Salaries Review Body less than a year ago. It has been used by about 600 Members of Parliament, including the majority of Conservative Members. Yet the communications allowance has cursorily been brushed aside—indeed, there will now be less funding for communications than existed prior to the introduction of the allowance. That is extraordinary.
It is clear to me that communications expenditure has become a victim of the backlash following the expenses scandals. In no way could that element be the object of personal financial gain, yet we Members of Parliament have allowed this to happen almost without process and, as far as I can see, almost without debate. Well, I protest, and this is the debate. IPSA has apparently carried out a consultation on expenses, including communications expenses. I trust that today’s debate will form part of its consideration.
The right hon. Gentleman says that the communications allowance could not be seen as being in the financial interests of Members. It may be some time since he was a candidate opposing a sitting Member of Parliament, but when he did so, that sitting MP did not have, in addition to all his staff funding, £10,000 a year to spend on self-congratulatory literature. By the sound of it, if he had his way, such literature would be going through people’s letterboxes all the way to election day, thus distorting our democracy, supporting incumbents and not freeing up and allowing a fair playing field. That is why I turned up here today. The communications allowance is fundamentally corrupt and it cannot be got rid of too soon.
No. I think that the decision to scrap the communications allowance is wrong, and I want to explain why. The communications it funds between an MP and his or her constituents are of great importance to democratic accountability. What is more important at this time than the links of accountability between MPs and their constituents? In passing, the withdrawal of the communications allowance creates a particular difficulty in highly transient big city seats such as mine, where MPs have a huge challenge in trying to make electors aware of their activities.
In the absence of any effective limit on pre-election expenditure, the withdrawal of the communications allowance will severely and unfairly disadvantage incumbents facing highly funded campaigns by opposing candidates. I know that my audience has been waiting for this reference: I obviously think of the noble Lord Ashcroft and his works, but I assure the House that it does not end with him and I intend to show how.
I shall not give way. The truth is that, against such well heeled campaigns, the communications allowance is not much, but it at least offers a line of defence against the attempted purchase of parliamentary seats. I remind the House that I make my case for the communications allowance—
On a point of order, Mr. Cook. May I establish whether that British citizen was warned that such a disgraceful reference would be made to him? We know that the Labour party is quite happy to sell passports to people such as Lakshmi Mittal in return for donations. Can we be told whether or not—
Order. I have the point. [Interruption.] Order. I will not allow this sitting to descend to the level of a bar-room brawl. Let us have some sense.
That was not a point of order. Furthermore, if right hon. and hon. Members were prepared to listen to what is being said, I might be able to hear it, too. Do not bring the behaviour of the main Chamber down to this Chamber, where we usually concentrate on having a fairly delicate, logical, clear and polite exchange of views. That is what Parliament is all about.
Further to that point of order, Mr. Cook. My understanding is that critical reference, and certainly reference in the strong terms used by the right hon. Gentleman, should not be made about a Member of the other place without notice being given. We cannot allow people to abuse the House in that way—
Order. I have your point. It would appear that my rationale has not been understood. I stated that if right hon. and hon. Members were prepared to curb their standards of conduct, I might be able to hear what is being said. I will not allow any Member here, regardless of political complexion, to impugn anyone else in the House. That is all the more reason why everybody should be listening to what is being said—and allowing me to listen at the same time.
I was about to remind the House that I make my case for the communications allowance on entirely disinterested grounds. Members may be aware that I announced some two years ago that I would retire at the general election, so I have no personal stake in the allowance. I make the case for it because it is right in democratic principle and because I believe its withdrawal could lead to injustice. I shall now give way to the hon. Member for Castle Point (Bob Spink), because I am particularly fond of him as an independent-minded Member. However, I propose to proceed with due haste thereafter.
I am grateful to the right hon. Gentleman for giving way. I am grateful to him also for bringing this matter before the House. It is important to inform, engage and empower our constituents and any decent Member of Parliament will use and will have used the allowance to do just that—for example, to inform constituents about claiming pensions credit and changes to national insurance for carers from 1 April. The cynical and negative view of the communications allowance that we have just heard from Her Majesty’s official Opposition is disgraceful, and that is what brings this House into disrepute.
I am glad that I allowed the hon. Gentleman to intervene at that point.
I mentioned that the communications allowance came in on the back of Lord Puttnam’s commission’s work on Parliament and communications, which concluded that both the institution and MPs needed to be better equipped to communicate with the public about the workings of democracy. It is surely irrefutable in principle that MPs need to offer their constituents some account of their activities in both the House and the constituency. In the light of longer-term voting trends and in the immediate aftermath of the expenses scandal, surely such accountability is more important than ever before. We have to rebuild the trust between politicians and the people, and one of the ways in which we can do that is by explaining what we do. In practice, unless MPs do it, no one will. It is a fact of life across all media, including local media, that there has been a decline in the reporting of Parliament, yet it is good for democracy that people should know what their MPs have been doing in Parliament and that, from time to time, they have succeeded in bringing benefits to their constituencies.
I thank the right hon. Gentleman for giving way. His principle that Members of Parliament should be allowed to inform constituents of their activities sounds reasonable enough, but unfortunately the reality of the past couple of years has been that, on many occasions, that position has been abused and Members have had to repay money paid under the communications allowance because such information turned out to be naked party political advertising. It is that that has brought politics into disrepute, not the lack of communication in the first place.
I concede that a small number of colleagues have overstepped the mark. However, I am sure that in 2008-09, when the hon. Gentleman spent substantial sums of his communications allowance on communicating with his constituents, which I notice he has now ceased to do—presumably in the light of his leader’s pronouncements on these matters—his communications were entirely about democratic accountability. With my now extensive knowledge of the hon. Gentleman, I would expect nothing less of him.
I thank the right hon. Gentleman again. He mentioned that more than 600 Members have made use of the communications allowance, but it is worth pointing out for the record that, quite often, one has no choice, because there are some things that were previously allowable under different allowances that can now only be held under the communications allowance, such as, for example, running a constituency website. As he has specifically mentioned my use of the communications allowance, I will say that I have ceased using it and firmly believe that it should be abolished because it is an abuse and has brought this House into disrepute.
I have to draw a line under accepting further interventions, at least at this early stage. I have plenty to say and we are beginning to hear a very similar message from those who are intervening on me.
The point I seek to make is that communicating that type of information is a response to the familiar cry of, “We only see you when you want our vote.” It is a means of engaging the public in politics. Such communications are only one part of the process of re-engaging the public, which will not be a fast process. That is why I believe that the Kelly report was premature in dismissing that aspect of the communications allowance only two years into its operation.
I believe that there is a valuable role for communications expenditure in all constituencies. I do not want to build my whole argument for the communications allowance on this, but let me say in passing that the winding up of the allowance will be particularly unhelpful in big city constituencies such as my own Streatham seat in south London, where there are special difficulties in making electors aware of the activities of their MPs. It is all very well for colleagues presiding over very stable electorates to be somewhat snooty about the uses of the communications allowance; they have the chance of building up long-term relationships with their constituents. In London, however—it may be true elsewhere—local bought newspapers tend to have small readerships and free sheets have sporadic distributions; and regional media, radio, television and the Evening Standard do not cover individual constituencies and rarely report on Back Benchers. On top of such difficulties in communication, many big city seats have highly transient populations. In my Streatham constituency, the last two censuses revealed that more than 20 per cent. of the population had changed address within the previous 12 months. As a consequence, analysis of the electoral register in Streatham indicates that only 41 per cent. of current electors lived in the constituency five years ago, and 38 per cent. of current electors arrived in the past two years. Those are rather striking figures. It may be a transient electorate but it is still perfectly entitled to know what its MP is up to.
Will the right hon. Gentleman give way?
I have some considerable sympathy with what the right hon. Gentleman is saying, but there are ways in which we can support newsletters. I am a capitalist and I get a lot of money from small businesses that advertise in my newsletter, so no taxpayer money goes into supporting it. I hope he will take that into account as a method of communicating as well.
I thank the right hon. Gentleman for giving way, and I entirely endorse what he has said about representing a London seat. I am in exactly the same boat with more than a fifth of my population turning over every single year. I confess that I have used the communications allowance in the past—not in this year because I have realised that there is now a strong move for it to be abolished—and have found it a very useful way to communicate with constituents. However, using public money in such a way gives an unbelievable advantage to an incumbent, and for that reason it is regarded as unacceptable. None the less, as the right hon. Gentleman rightly says, the majority of MPs who use the allowance do so entirely legitimately. They do not use it for out-and-out party political propaganda.
I am grateful to the hon. Gentleman, who has made a reasonable intervention, as I would expect from my long knowledge and observation of him. I intend to come on to some of those points about the advantages that may or may not be conferred on incumbents.
However, let me return to my point about transients. I would be grateful to learn from IPSA how MPs in seats such as mine can be expected to engage with such challenging electorates only on the basis of leaflets about occasional meetings and advice surgeries and contact cards. Of course there were other criticisms of the communications allowance. The Kelly report criticised the self-promotional character of the materials published under the communications allowance. Frankly, it would be disingenuous of any of us here to deny that there had been such an element of self-promotion.
None the less, if we are talking about engaging local people in the parliamentary process, surely there can be no more effective means of engagement than information about the MP whose fate they themselves determine. It is my contention that there have been too many photographs, but is it not inevitable that most of the stories will be about the MP? What I strongly dispute, however, is a further Kelly report criticism, which is that there was widespread evidence that the communications allowance was being used in ways that were overtly party political. Yes, there have been some exceptions, and they have been policed and dealt with, and they involved a very small minority of Members.
Indeed, the more familiar accusation against materials produced under the communications allowance has been of their blandness rather than their partisanship, and that is because MPs have been reasonably scrupulous about excluding overtly party political content from such publications. If materials published by MPs, or incumbents, have been overwhelmingly non-partisan in character, that same constraint does not apply to their political opponents. As we know, incumbents have been the targets of very highly funded campaigns by their political opponents. It is my contention that the communications allowance has offered at least some small element of balance in the face of highly funded opposing candidates.
I beg the House not to misunderstand me. I am not arguing that the communications allowance should be used as a free fighting fund to allow incumbents to beat off challengers—it is right that it should retain its non-partisan character—but I am saying that, faced with a deluge of materials from highly funded opponents, at least the communications allowance serves the minimal purpose of reminding voters that they already have an MP in place.
Let me be frank: I believe that there should be some balance, some equity and some fairness in local and national campaign expenditure. I believe that there should be limits on local campaign expenditure, and I believe that that is achievable. Indeed, the attempt to secure at least a rough balance has been at the heart of British electoral practice for more than a century. Since 1883, with the first Representation of the People Act, successive Acts of Parliament have imposed limits on permitted election expenditure by candidates and increasingly there have been attempts to control national campaign expenditure.
At the local level, we have a cap on general election spending, and under the most recent legislation in this area, the Political Parties and Elections Act 2009, we have a cap on pre-general election spending, from the 56th month of a Parliament. However, we no longer have any restraint on spending on behalf of candidates in the years between elections. There was such restraint until 2000, when the Political Parties and Referendums Act 2000 came into effect. Pre-2000, the situation was pretty clear.
Let me quote the noble Lord Rennard—Baron Rennard of Wavertree, former chief executive of the Liberal Democrats and fabled by-election winner. Speaking in a debate in the other place last year, on the Political Parties and Elections Bill, he said:
“Between 1883 and 2000, effective legislation was in place to deal with some of the problems of using money”— [Interruption.]
Order. I think that this is the third time that I have said this—there is too much chuntering. I need to hear every syllable that is said in the debate. I will not allow any Member, of whatever rank, to impugn any Member of Parliament. I need to hear what is said clearly, so please desist with the chuntering.
Thank you, Mr. Cook.
Let me reprise that quotation from Lord Rennard:
“Between 1883 and 2000, effective legislation was in place to deal with some of the problems of using money to buy undue influence in a particular constituency. Inadvertently, the trigger was removed in 2000”. —[Official Report, House of Lords, 5 May 2009; Vol. 710, c. GC210.]
The “trigger” has not been restored and the result has been a free-for-all in campaign expenditure in a number of constituencies.
In that context, it is difficult to avoid the name of another noble Lord, Lord Ashcroft, the billionaire and long-term UK resident, who in the lead-up to the 2005 general election donated between £20,000 and £40,000 to Conservative candidates in 36 marginal seats. We know that because his lordship tells us about it in his autobiography, which is entitled, “Dirty politics, Dirty times”.
The story continues, as we learned from the front page of last Saturday’s edition of The Independent, with “Ashcroft’s election war-chest targets marginals” and the news that the election fund that he controls, as deputy chairman of the Conservative party, has directed more than £1.1 million to 55 marginal seats, which is an average of £21,000 per constituency, but with much more than that being directed at some seats. For example, £36,000 was directed at the Pendle constituency. I see my hon. Friend the Member for Pendle (Mr. Prentice) in his place and I dare say that we will hear more about that contribution in due course. Another £39,000 was directed at the City of York constituency, and £55,000 at the Solihull constituency.
Order. I am following what the right hon. Gentleman is saying and I must remind the House that we are discussing the winding-up of the communications allowance. To that end, I must insist that we make reference to the responsibilities of the Minister who is in attendance today and listening to the debate.
Thank you for that advice, Mr. Cook. I want to go on immediately to the communications allowance and point out that, against such expenditure as I have just described, the average expenditure of £8,000 through the parliamentary communications allowance in 2008-09 looks pretty minor, although I would maintain that for many sitting MPs that expenditure represents their best hope of securing at least some balance in local communities.
However, it would be wrong to imagine that that gross inequality in communications expenditure is the sole preserve of Conservative candidates attacking Labour or Lib Dem incumbents. In my own Streatham seat, since early 2007 residents in all parts of the constituency have been at the receiving end of a torrent of Lib Dem campaigning materials. There have been not only the familiar Lib Dem “Focus” leaflets, but well-printed, highly expensive and multi-coloured newspapers, most of them delivered by paid, professional distribution companies. In addition to the newspaper distributions, there have been the direct mailings—there has been at least one every couple of months—that have been sent through the post to individual electors. That activity does not come cheap. I could not remotely contemplate such expenditure through the communications allowance.
For three years now in the Streatham constituency, electors have, on average, received at least one well-produced, glossy publication every month. They are communications of a highly party political nature, full of attacks on the local Labour council, the Labour Government and, incidentally, the Conservative party, all of them heavily promoting the Lib Dem parliamentary candidate, Chris Nicholson. [Interruption.] I am coming on to the communications allowance, Mr. Cook. As I was saying, all that communication has been hugely expensive. It amounts to far more than I could pay for through the parliamentary communications allowance, which may not even be available in the future.
Order. I must explain that what I am seeking is a clear distinction between parliamentary funding and party funding, without comment on party funding, because we are talking about parliamentary funding—or we should be, according to the title of the debate.
I want point out, Mr. Cook, that during that three-year period, when my constituents have been subject to this deluge of Lib Dem propaganda, I have been able to spend money, through the communications allowance, on about nine A4 newsletters. In that time, I have spent less than £30,000 through the communications allowance. That contrasts with a staggering total of £283,494.64 in the same period—virtually all of it funded out of the pocket of my Lib Dem opponent. Furthermore, as we know from the published accounts of the Streatham Lib Dems, it has been spent almost wholly on electioneering in Streatham.
I find it extraordinary and frankly undemocratic that an enormously wealthy man, who was recently in receipt of £800,000 in bonuses as a KPMG partner, can use his wealth to communicate far more often with my electors than I am able to as their Member of Parliament. My recurring theme is that at least I have benefited from the communications allowance in striving to maintain some balance, and I am not even standing at the next general election.
So, if this rich man far outstrips what I can spend on communications as the MP, how much more unfair is it for my successor as the Labour candidate for Streatham, Chuka Umunna, to depend largely on the donations of Labour party members? The Lib Dem candidate in the Streatham constituency is outspending me by a ratio of more than 10:1 and outspending the next Labour candidate by a ratio of 15:1.
What we are seeing in Streatham is the attempted purchase of a parliamentary seat. It is not a level playing field, it is not fair and it would be a good deal more unfair without the communications allowance. The message that I want to give Mr. Nicholson is that Streatham is not for sale.
I hope that that message will prove true at the general election; I believe that it will. However, we mislead ourselves if we think that money does not matter. If it does not matter, why is Lord Ashcroft spending so much of it? If it does not matter, why have we had a succession of Acts limiting election expenditure?
I want to bring my remarks to a close by drawing hon. Members’ attention to a debate in the House last year and words that were spoken in it, which are that
“the first imperative is to get big money out of politics. There should be a strict cap on how much money one person can donate to a political party. There should be strict limits on what parties can spend at both the national and local level. No one should be able to buy an election or be seen to be buying an election.”—[Official Report, 2 February 2009; Vol. 487, c. 666.]
Those were the words of the hon. Member for Cambridge (David Howarth), who speaks from the Liberal Democrat Front Bench on these constitutional matters. A month later, speaking on the Political Parties and Elections Bill, he said that
“we have to do something to reduce the gap between us as representatives and the people whom we represent. At the moment, one of the things coming between us and those people is big money… we must set a cap on the influence that individuals have on politics through money.”—[Official Report, 2 March 2009; Vol. 488, c.637-8.]
I agree with the hon. Gentleman on both counts. Why, therefore, do the Lib Dems allow Mr. Nicholson to get away with such blatant flouting of their policy? It is entirely clear to me that we need local spending limits between elections, and I regret that no party has taken action to restore such limits. We need to return to the position we were in before 2000. Nevertheless, when there has been excessive spending by candidates standing in opposition, the communications allowance has at least offered a modest means of achieving some balance in communications with constituents.
It is right in principle that MPs should be resourced to inform their constituents about their work in Parliament and in the constituency; such communications can encourage political engagement. I regret that the Independent Parliamentary Standards Authority seems intent on imposing draconian limits on MPs’ communications, and I hope that this debate will help to change its mind.
Order. I need to make one or two points clear. I have been very tolerant with the opening speech, allowing it to get rather broad and cover inter-election campaign funding. Having done that with the opening speech, I have to be more tolerant than I intended to be with other contributions.
I must also remind hon. Members that this is a 90-minute debate, which must finish at 4 o’clock, but, as Chair, I am required to ensure that, 30 minutes before that, I enable the first of the three winding-up speeches from the Front Benchers to begin. We have, therefore, less than 26 minutes left for general debate. Three written submissions have already been given to me from Members who hope to catch my eye, and they are all from one side of the House. There are none from the other side of the House, although it would appear that a number of Members on that side want to speak.
I shall start with the first written submission, and then go on to a random sample. I call Gordon Prentice.
On a point of order, Mr. Cook. I had been given to understand from documents that were provided to us as Members that for debates in Westminster Hall no benefit or advantage was given to those who submitted such written advance notice, and that we would be treated equally if we simply came and made it clear that we wanted to speak, by standing up as we are doing now. Will you please clarify whether that is the case?
The hon. Gentleman seeks an explanation from me of my decision. Normally, the Chair would refuse to do that, but I do not mind making it clear today that Members who have shown the courtesy of contacting the Chair deserve a little more consideration, in my view. I call Gordon Prentice.
I have a lot to say, but I shall compress it because I know that so many colleagues on both sides of the House want to make a contribution. I begin by saying that what happens in Britain is not unique. I know a lot about Canada—I chair the all-party Canada group. Canadians can mail their MPs without putting a stamp on the envelope. Canadian MPs can send out annual reports; they can do what we do here, so what happens in Britain is not unique. The big problem that we face is that there are effectively no spending limits except in the immediate run-up to a general election—in the six months before it. Before that, however, anything goes. We have heard about Streatham.
Perhaps I am making a party political point here, but my jaw dropped last night when my colleague, the Member for Edmonton (Mr. Love), told me that his Conservative challenger spent £142,000 in the last three months of 2009—that is documented in Electoral Commission figures. There is no level playing field—I hate using that term. It is possible, and we are seeing it happen, to buy an election. We heard about the difficultly of contacting constituents in small inner-city seats. Many years ago, I was the leader of Hammersmith and Fulham council and I know the constituency like the back of my hand. There is a flip side, however: my Pendle constituency is 65 square miles. I do not know how many Hammersmith and Fulhams you could put in that. It is impossible to contact my constituents by just walking up the farm track—there are not the hours in the day. The way to contact people in a far-flung rural constituency is to pay people—Royal Mail—to do it.
I have my own speech to make, and if the hon. Gentleman catches your eye, Mr. Cook, he will be able to make his own.
When the communications allowance was brought in, I did not use it for the first year. I felt uncomfortable, to be honest. Since then, I have been 545th in the list. In the first year, I spent £2,349, on surgery advertisements and so on, but people were saying to me, “What on earth are you doing? You’re doing nothing down at Westminster, but we’ve been getting all this stuff from Andrew Stephenson”. I was getting letters in my office addressed to Andrew Stephenson MP, the MP for Pendle. He may well be the MP in a couple of months’ time. It is not just people in this room who are listening to this debate, it is people outside as well, and he could very well be the next MP.
I used my communications allowance on five occasions, in October 2008, and in January, April, October and December 2009. My communications were not bland at all. There are no photographs of me cuddling babies, or with police officers—none of the usual stuff. In my latest parliamentary report, I complain in the article “Waiting for the ambulance” that in the West Craven part of my constituency people were having to wait ages for an ambulance, even when their situation was life-threatening. That probably did a lot of damage to my Labour Government. In an article in the previous issue, entitled “Afghanistan: What now?”, I talked about my position on Afghanistan, saying that
“the bloody conflict in Afghanistan drags on”
and that it is now time to set a clear exit strategy. That is me speaking, not the Labour Government. In the issue before that there was the article, “Royal Mail: Save it—don’t sell it”; that is not bland communication. I was arguing against the position of my own Government. I want to see Royal Mail stay in public ownership. That is not bland; it is letting people know my views. Another article was entitled, “Fat Cats slated”. I had to pay money back to the Commons authorities for that.
There was one anonymous complaint. The Commons authorities could not tell me who had made the complaint, but it was about two paragraphs that I had written in one of my reports. I hope that you will allow me to read them both out, Mr. Cook, because they are, as we now know, absolutely factually correct. The first paragraph stated: “I told the Commons”—I was quoting from a Commons speech—
“the Conservative peer and donor, Lord Laidlaw, was ennobled in 2004 after promising to become a UK resident for tax purposes. He reneged on that promise and lives in tax exile in Monaco.”
That is a fact, but I had to pay money back for saying what I did. In the next paragraph, I said:
“Another Conservative peer, Lord Ashcroft openly admits bankrolling local Conservative Associations yet refuses to say if he pays UK taxes. He is based in the Central American tax haven of Belize.”
As a result of those two paragraphs, I had to reimburse the Commons authorities. [Interruption.] No, I will not go down that road; everyone knows about Lord Ashcroft.
I will not. I have a lot of ground to cover, and the Member can make his own speech.
My fifth parliamentary report talked about hard choices regarding DNA, and I made it clear that my position is probably more akin to the Liberal Democrat position than the Labour Government’s position. When people read my parliamentary report, therefore, they say, “Whatever his faults, this guy Gordon Prentice isn’t a cipher. He’s not just telling us what Labour Whips are telling him to say.” They get an idea of where I am coming from.
Those were my five parliamentary reports. Now, if you will allow me, Mr. Cook, I will whistle through some material from Andrew Stephenson, who will probably be the MP in a couple of months. I have a copy of his leaflet “Andrew Stephenson Reports Back”, which has just come out. I also have the February and March edition of his “Pendle Matters”, which the Royal Mail delivered to all 37,000 households in Pendle; it talks about the “Year of Change” and runs to four pages. Another edition, which was delivered free to 37,000 households, talks about “Putting Pendle on the Map” and has a picture of the Leader of the Opposition. That is all since Christmas.
The December 2009 edition of “Pendle Matters”, which was delivered to 37,000 households, says, “Shop Local”—unfortunately, it was printed in Guildford. I also have the October 2009 and August 2009 editions of “Pendle Matters”, which were delivered to every household in my constituency. The headline in one edition reads “Cameron spells out a Plan for Change”. The headline in another, which was delivered to 37,000 households, talks about “Transport in the North”. Another edition has the headline “Tackling the Credit Crunch” and runs to four pages.
There is a convention on the Floor of the House that visual aids are not allowed. I cannot see what is on the leaflets that the hon. Member for Pendle (Mr. Prentice) is holding up, so they are hardly visual aids. However, I can count and I can see that there is a discrepancy in terms of acreage and number, and I await his conclusions on that. I must remind hon. Members that we have about 17 minutes before I call the Front Benchers.
I do not want to test the patience of colleagues, so let me just say that I have too many leaflets to go through; there are three years’ worth. It is not just “Pendle Matters” that is being delivered; there is loads of other stuff as well. There are six-page booklets, which look like Hello! magazine, the ads in the local papers and so on.
Let me come to my peroration. I think I have demonstrated conclusively that the next election is being bought. Election spending should be controlled; if it is not, it will be totally unfair, and rich people will be able to determine who sits in this House.
The right hon. Member for Streatham (Keith Hill), who obtained the debate, has made a huge contribution to this place. He is one of the outstanding Members of Parliament I have come across in my time here—somebody of unfailing humour, whether things are going well or badly for him. He has never rubbed my nose in it when my party is doing badly, and he has always had a big smile on his face, even when his party seems to be on its uppers.
Having said all that, I am a little surprised that the right hon. Gentleman should choose this of all subjects for his parliamentary swansong. As far as I could tell, he adduced six points in defence of the communications allowance. The first was democratic accountability. That is the sort of the phrase that is bandied around quite cheaply, but generally means very little. By listening to him, I did not really discover where exactly accountability would be increased as a consequence of the allowance.
The right hon. Gentleman then said that the allowance would act as a counterweight to Lord Ashcroft’s “attempted purchase of parliamentary seats.” I understand his point, and I will discuss it in a little more detail in a moment.
The right hon. Gentleman then said that it would rebuild trust. But I take the view that spending large sums of public money on self-promotion—I think that that is how people perceive it—is more likely than not to have the opposite effect, if it has any effect at all.
The right hon. Gentleman said that the allowance was important for seats with transient electorates, but that seems a rather curious point. Does it mean that the grant should be graded, so that Members in seats with the lowest churn have the lowest grant and those in seats with the highest churn have the highest grant? I found that idea extremely bizarre. The level playing field we need is not between seats, but within seats between people campaigning. Presumably, a transient electorate is as difficult for the challengers to handle as it is for the sitting MP.
In a very revealing phrase, the right hon. Gentleman said that the allowance is at least—I hope that I have got this exactly right—“needed to remind people that they do at least have an MP in place”. I should hope that any MP who is doing his job would find a way of enabling at least some of his constituents to discover that they have representation at Westminster, so I do not find that argument convincing either.
The right hon. Gentleman’s final argument was that the allowance is a modest means of achieving balance, which goes back to the point that I made a moment ago. I hope that I have already answered that argument a little. It is the balance within the constituency, not between constituencies, that matters.
I think that the communications allowance is a scandalous waste of public money. it was right to abolish it. It is a form of incumbency grant. The hon. Member for Cannock Chase (Dr. Wright), the Chairman of the Public Administration Committee, has said as much in unequivocal terms, and I agree with him. Incidentally, the incumbency value is measurable; it is a statistical fact. It is between one and three percentage points.
I will not. If the hon. Gentleman will permit me, I will carry on, although that is purely for reasons of time.
The incumbency value is between one and three percentage points, but it falls away after the first re-election and scarcely shows up in the statistics after that. Interestingly, it has scarcely changed for 50 years—whatever we put in place, it seems to remain pretty much the same. Although people want the communications allowance to entrench incumbency, it does not seem to have that effect—nor, indeed, does the campaigning on the other side of the ledger.
The extra money spent in marginal seats in 2001 and 2005 for the Conservative party had the reverse effect to the one intended. In fact, the swing was two percentage points lower in 2001 in the seats where the most money was spent, which I find statistically significant. Furthermore, we later discovered from Labour literature that the Labour party had abandoned those seats, so there was not even a cancelling-out effect, which is normally the key reason why it is so difficult to identify the benefits to local campaigning.
My objection to the communications allowance is not that it may actually be effective—although it could become effective at a future date—but that it is state funding of political parties by the back door. If we want state funding—I am not against it in principle, as the hon. Member for Somerton and Frome (Mr. Heath) will attest—we should explain to the electorate what we are doing and vote it in, not supply it by the back door.
Incumbency, in any case, is already being bolstered by increases in parliamentary secretarial allowances, particularly where MPs have relocated a large number of their staff to their constituencies, where I strongly suspect a number of them are engaging in campaigning rather than constituency work. I very much hope that IPSA will investigate that and clamp down on any malpractice of that type in the months and years ahead.
The right hon. Member for Streatham argued that the communications allowance is needed to offset Conservative funding in marginal seats. He emphasised that point at some length, but by making it he let the cat out of the bag and revealed his desired purpose for the communications allowance. Now we know that, in his view, the communications allowance should be and is a campaigning fund—exactly what it is designed not to be—and not the constituency allowance that he and his party dressed it up as when they encouraged the House to allow it.
The right hon. Gentleman is, of course, upset that a rich donor is seeking to influence a British election by pouring money into target seats. I, too, am upset about that and about the funding being provided by a small number of big donors, including trade union bosses and corporations, as well as rich individuals. They should all go; they should all be got rid of. We need a donations cap, and I should like it to be set well below the level of £50,000 that I set out in a document, to obtain compromise. Those rich donors—the unions, corporations and rich individuals—should be wholly removed from the funding of political parties.
To his enormous credit, the Leader of the Opposition not only agrees with that view but has said so publicly on numerous occasions, and has published jointly with me a pamphlet setting out how it can be accomplished. I think he agrees that there is a stench in the nostrils of the electorate about the way parties are funded and he wants to do something about it.
However, the obstacle all along, I regret to say, has been the unions. The publication of the document triggered some very important talks, which took place over two years, chaired by Hayden Phillips, to get to grips with the issue. Tony Blair was involved in those talks, and he too supported the idea, as did the former head of his policy unit, Matt Taylor. Unfortunately, the Labour party did not support it. In particular, the present Secretary of State for Justice and Lord Chancellor, when he became more closely involved in the talks, obstructed any progress on the key issue, which was the inclusion of unions in the cap:
“The problem was that the system could not be overhauled without some loosening of the ties between Labour and the trade unions which together contributed about £11 million a year”
to Labour coffers.
“Unfortunately, that was unthinkable to large swathes”
of the Labour party. Those are not my conclusions, but the conclusions of Peter Watt, the then Labour general secretary, who like me participated in every one of the talks. He went on to say that the current Prime Minister had
“nothing to gain from picking this fight”
with the unions.
“He needed the support of the trade unions to become Prime Minister”,
so we know why he engaged in so much obstructionism as well. Peter Watt continues that he
“disliked the extent to which we had to dance to the unions’ tune”
“the trade union barons were never shy of articulating what they expected in return”
for their cash. He said:
“My primary emotion during the process was intense frustration, because my own party was the biggest block to reform”.
The heart of the matter is that the communications allowance was introduced with party political purposes in mind, whatever its outward name and whatever the pretence of the way it was described. Labour was the incumbent party. Anything that went only to incumbents would inevitably be of benefit to it. It has been rumbled, first by the way that Parliament has begun to examine these issues, and now by the fact that in this debate the right hon. Member for Streatham has let the cat out of the bag about the real purposes of supporting the communications allowance. I am delighted by the findings of Sir Christopher Kelly on the issue. I am very pleased that my party supports the removal of the communications allowance, and I hope that it will be implemented immediately after the election by IPSA.
Order. I am happy to inform the House that the three main Front-Bench spokespeople have agreed to reduce their allotted time from 10 to seven minutes—not easy, but they are prepared to do it—to afford Back Benchers more time. So I appeal to everyone: I will try to get you all in, but make it brief, please, make it pointed and make it clear.
It is a pleasure to follow the hon. Member for Chichester (Mr. Tyrie), who made an intelligent contribution to the debate. I think that my right hon. Friend the Member for Streatham (Keith Hill) and my hon. Friend the Member for Pendle (Mr. Prentice) make a fundamental mistake in equating the communications allowance to the tsunami of funds being hurled at their constituencies.
It is time I fessed up: hon. Members are looking at the father of the communications allowance. I pushed it in 2002 and 2003 and it first emerged, not through Puttnam, but through the “Connecting Parliament with the Public” report of the Modernisation Committee in 2003-04, and not as a balance to what was at that time an all-but bankrupt Conservative party. If we cast our minds back to the hammering that the Conservatives got in the polls in 2001, we see that they were not a well funded political party. My objective was to create a level playing field not against party political campaigning, because that is clearly outlawed in the rules that govern the communications allowance—I am surprised that my colleagues allowed themselves to be dragged down that road—but with others active in our constituencies, such as local councillors, whether Conservative, Labour, Lib Dem or independent. They can proactively communicate with their constituents and put out unsolicited letters seeking views on planning applications and all sorts of other issues. We cannot. How insane is that?
I leave this place with huge affection for the role that we undertake as Members of Parliament. The action in my constituency of which I am proudest is not when I went with the grain of public opinion, but when I went against it and campaigned for a new psychiatric hospital in the heart of my constituency and stood up for the mentally ill, who did not have a voice and were not a well funded middle-class residents group saying, “Oh, my God, we can’t have these characters running around frightening the children.” Things have settled down, and I am proud that I was able to do that. I could do it because I could communicate proactively. That is what the allowance is about. It is nothing to do with Ashcroft or the bankrupt Tory party, or a Tory party whose coffers are overflowing from tax exiles or others. Let me make that clear.
No, I want to be very brief.
The communications allowance was brought in—no one has mentioned this—on the back of the cap on MPs’ postage, which was implemented and introduced by the previous Speaker, because some Members of Parliament were taking the mickey with the House of Commons free post. I have always been a high user of it, but I think very much as the hon. Member for Castle Point (Bob Spink), who is not in his place, does—or the hon. Member for Spelthorne (Mr. Wilshire), among the Conservatives. He had a huge issue in his constituency—the closure of Ashford hospital, I think. How could he deal with receiving a petition of perhaps 15,000—I do not know how many people wrote to him—on the subject? Within the rules, because he was reacting to what people wrote to him about, he was able to reply to them and keep them informed and engaged in that campaign to keep Ashford hospital open. He was successful, but because of abuse by one or two Members, we were taking away the tools to do the job, so something had to be put in its place.
Before Opposition Members get too aerated about the issue, I point out that only one of them has not claimed the allowance. It was not fought tooth and nail by the Conservative party. I was there and I know. A lot of the points in favour of the introduction of the communications allowance were conceded by the Conservatives. In the debate in 2007, when Parliament eventually got around to introducing the communications allowance, the hon. Member for Hammersmith and Fulham (Mr. Hands) said in response to me:
“The hon. Gentleman is speaking of allowing MPs to engage in reactive communication with constituents, which I am in favour of.”—[Official Report, 28 March 2007; Vol. 458, c. 1530.]
The problem is that the ability to engage in reactive communication with our constituents was hidebound by the cap on MPs’ postage. We had to have something to put in its place.
No I will not.
I reject Sir Christopher Kelly’s analysis. I wrote to the Members Estimate Committee to pull apart his arguments. In paragraph 8.6 of his report, he acknowledged that the communications allowance was introduced in part to compensate for the cap on postage, but he made no recommendation that the cap be lifted. He stated that
“some MPs of all three main parties make use of it.”
What he did not mention was that only 43 MPs have not claimed the communications allowance.
There is a degree of hypocrisy, is there not, in the Leader of the Opposition calling the allowance
“nothing less than old-fashioned, state-sanctioned propaganda”?
I have listened to the protestations of the hon. Member for Beverley and Holderness (Mr. Stuart), who tells us that it is corrupt. Well, he was quite happy to claim £4,679 of corrupt money. The hon. Member for Hammersmith and Fulham says that he had no choice but to claim it.
I will give way to the hon. Gentleman in two seconds. Perhaps he had to take that money to fund a website, but I would like to see the kind of website one can get for £5,351, which was what he claimed in 2007-08. Is he telling the House that he spent that money on a website and nothing else? I would like him to clarify.
I am happy to clarify. My point was that one has no choice about something like a website. In 2007, I made the point that it was not right because of the postage cap to introduce a communications allowance of up to £10,000 for every Member, which clearly gave encouragement to use that amount. That is different from the one-off occasion when one has a mass petition, which the hon. Gentleman was describing, because that will not be the case for all 646 Members.
Martin Salter: I thank the hon. Gentleman for that non-clarification, but I note that he did not clarify whether he spent all of the £5,000 on his website.
To conclude, it will be a sad day if at the end of this Parliament—a Parliament whose reputation has been traduced by a sloppy expenses system and sloppy behaviour on our part collectively—we single out the one allowance about which there was no controversy in The Daily Telegraph or on the stolen disc. The allowance probably worked—albeit perhaps imperfectly—far more effectively than our second home allowance, our employment of relations, and the ridiculous fripperies and luxuries that people decided the taxpayer should fork out for. It is a shame, when politics and the role of Members of Parliament are being traduced, that we do not have the simple tools to do what we are sent here to do, which is to speak up for the communities that represent us. Not giving us the tools to do that is ridiculous.
I end with a quote from a Conservative, Lord Norton of Louth, who gave evidence to the Modernisation Committee and whom the hon. Member for Beverley and Holderness described in the House as a great man. He said:
“If the constituency demand increases—which it has, decade by decade—if you cannot close off the demand, you have to manage the supply side…There is also a resource implication.”
There is a resource implication. We will not serve our constituents as well as we could if we are not given the tools to do the job or the resources to fund proper, non-partisan communication.
I will make two quick and simple points, but first I congratulate the right hon. Member for Streatham (Keith Hill) on initiating the debate. I add my comments on his friendliness. I have always considered him a friendly chap and now consider him a friend. I therefore have some sympathy with what he says.
Of course, I shall come straight to the communications allowance.
I agree with the remarks of the hon. Member for Pendle (Mr. Prentice) on spending prior to the election. To my mind, as an old-time agent, the figures that have been mentioned are quite obscene. They do have a distorting impact on elections. It was foolish to enact the law that allowed such sums to be spent, and I thought so at the time. The figures we see today confirm that my judgment then was correct.
All I can say is, why the hell did Labour bring that law in? I did not understand that for one minute. It was never going to benefit Labour, even if it was introduced from a political perspective. It was absolutely crazy. I agree with the hon. Gentleman, but want to introduce a bit of balance about where the law came from.
Receiving so many leaflets would put me off. In some respects, it does harm to put such nonsense through people’s letterboxes week in, week out; month in, month out. I know that I am doing harm to our worthy candidate in that part of the world, but quite frankly I get totally pissed off with it. Sorry, Mr. Cook, I withdraw that remark.
Finally, non-doms have been mentioned and they do have an impact on this matter. Between 2001 and 2008, the Labour party received more donations from non-doms than any other party. The amount was £8.9 million, compared with the £5.6 million that the Conservatives received. A little understanding of the balance in this matter has some import in the debate. That is all I wish to say to provide a little fairness. Thank you for calling me, Mr. Cook.
It is important to distinguish two issues in the debate. The first is the tsunami of party propaganda that has flooded through people’s letterboxes. That is relevant because it is the justification that Lord Ashcroft himself gave for opposing the communications allowance. A completely separate issue is the right of MPs to report back to their constituencies. I am much more exercised about the second point. We must warn the Independent Parliamentary Standards Authority to think the issue through before it takes action.
When we spend money through the communications allowance, we cannot mention the party, but can only describe what an MP has done. The opposition does not come from my local Conservative candidate’s leaflets, much as they flood through the letterbox. I am trying to counteract the effects of the council newspaper, which has a staff of six, including graphic designers and former journalists. It uses its 30 or 40 pages every two months to claim credit not only for what the council does, but for what the Government do. For example, the new lifts at Clapham Junction station were funded by £10 million from the Government and the council threw in £300,000 for pavement improvements. In other words, 97 per cent. of the funding came from the Government and 3 per cent. from Wandsworth council. Of course, the council newspaper gave huge publicity to the £300,000 it spent on the pavements and none to the Government.
In contrast to the 30 or 40-page bi-monthly council newspaper, I have a bi-monthly newsletter called “the Bugle”, which stretches to two pages. It is important that MPs are able to draw their constituents’ attention to what they are fighting for and what the Government are doing in their constituencies. Thanks to the communications allowance, I have been able to tell people things that they cannot learn about anywhere else, such as the five health centres that are planned in the constituency, the tube link to Clapham Junction and my opposition to 42-storey tower blocks at Clapham Junction. People regard that newsletter not as propaganda, but as an important source of information that they cannot get from any other place—[Interruption.] No, I will not give way. I have two minutes. I am sorry, but I am not going to give any of that time away.
It is very important to preserve the ability of MPs to report back what they are doing in the constituency. The argument about party propaganda is totally irrelevant. The position should not be characterised as party propaganda versus straight news in newspapers. The newsletters I put out are people’s source of information about local issues. Newspapers, such as the Evening Standard and so on, have a relentlessly negative spin on politics. MPs’ newsletters—mine has never been complained against—can perform a very valuable role.
I am glad the extra time the hon. Member for Battersea (Martin Linton) took came out of my allocation, Mr. Cook. I congratulate the right hon. Member for Streatham (Keith Hill) on securing the debate. I have to say that it has been extremely muddled, because, as the hon. Member for Reading, West (Martin Salter) said, two entirely different topics have been discussed.
One issue is party funding and the hugely adverse effect the lack of limits on party funding has on the election contests in marginal constituencies across the country. That was amply demonstrated by the hon. Member for Pendle (Mr. Prentice) and, it would appear, by the right hon. Member for Streatham, although that is the only constituency I have ever heard of where the Liberal Democrats are outspending the other parties. I am delighted to know that there is at least one constituency in which we have some assets. I draw hon. Members’ attention to the comment on “The News Quiz” last week that the Conservatives are funded by multi-millionaire businessmen, the Labour party by the unions and the Liberal Democrats by a bring-and-buy sale in Truro. That is actually largely the case.
Having said that, what the right hon. Gentleman said when quoting my hon. Friend the Member for Cambridge (David Howarth)—he could easily have quoted me because I have spoken in many of the same debates—is clearly our position. We need caps on expenditure and caps on donations, and we need those to extend beyond the election period and the proximity of the election period. Those caps also need to cover central office funding because that is one of the great abuses of the system at the moment by all parties.
If the parties believe there is a marginal seat, they put in an enormous amount of generic election material that does not refer to the candidate and is completely beyond the radar of the current electoral system. If the right hon. Gentleman feels that way, he should have voted with us when we put down amendments that would have dealt with that matter. However, he did not and the Government refused to do so. The hon. Member for Chichester (Mr. Tyrie) mentioned the all-party talks, with which I was also involved. I have a slightly different recollection from him of the sequence of events but, nevertheless, it is sad that we were not able to reach a conclusion.
May I deal with what we are supposed to be talking about, which is the communications allowance? I agree with the hon. Member for Reading, West that one of the sad things about the debate is that two issues have been conflated and the communications allowance has been seen as the answer to the lack of limits on political party spending. It cannot be the answer to that problem, and if that is how the matter is being seen, it is absolutely wrong for the allowance to be abolished on that basis. A communications allowance that is designed to allow Members of Parliament to communicate with their constituents should not be used for party political purposes.
If the right hon. Member for Streatham has difficulty raising funds and putting out leaflets and newspapers in his constituency, that is a problem he has with his political base; it is not one that should be dealt with by the communications allowance. I voted against the communications allowance because I thought it was an unnecessary additional expenditure, but I am not against some of things that it provides for, which were already allowable under the other office costs allowances. Annual reports are a useful mechanism for communicating what an MP has done for constituents, provided they are not used for party political purposes.
Over the past few years, one of the problems has been that people do not understand what MPs do and why we are here. That is why the expenses scandal had so much potency. It is important that we advertise where we hold our surgeries. In my case—I have a very rural constituency of 900 square miles—I do an annual tour each year of more than 100 villages. I want people to know that I am going to be in their village and when they can meet me in the pub, outside the post box or wherever.
I have not got time—I have only six minutes.
It is also right that we should be able to write proactively, directly to constituents on matters that affect them and on how we are doing our job as Members of Parliament. The hon. Member for Reading, West was right that there was abuse of the free post system, which is why it was taken away, but that does not mean that we do not need to do something, and we should have the capacity to act.
My party is foursquare behind the Kelly proposals and the IPSA proposals, as are the other parties’ Front Benchers. Sadly, we are not in a position to argue for exemptions where we think we have got the matter wrong, but when the IPSA rules are finally formulated, I hope they provide sufficient latitude for Members of Parliament to do their job properly. If IPSA can pull that off and get it right, we will have the balance right. I do not believe that the communications allowance was widely abused; it was abused by some, but the pre-existing arrangement was also abused by some. When it comes down to it, again, it is a matter of having trust in Members of Parliament to do their job properly within the rules, which it seems some have still to learn. However, I hope that others have got the message and that more will continue to do so in the next Parliament.
May I start by giving my condolences to the family of Michael Foot? He was a distinguished Member of Parliament and I am sure that all our thoughts are with his family today.
I congratulate the right hon. Member for Streatham (Keith Hill) on securing the debate, which ostensibly is about the communications allowance, but, as we have heard, has ranged into various other areas. It is worth recapping why the communications allowance was introduced in the first place. The then Leader of the House, who is now Secretary of State for Justice and Lord Chancellor, said it was
“to assist with the important task of improving the engagement of the House with the public”
in part due to
“the extraordinary increase in constituency demands and expectations”—[Official Report, 1 November 2006; Vol. 451, c. 301.]
on MPs. However, the position was best summed up by my right hon. Friend the Member for Maidenhead (Mrs. May), the then shadow Leader of the House, when she said that the allowance
“will give an enormous taxpayer-funded advantage to sitting Members of Parliament”.—[Official Report, 28 March 2007; Vol. 458, c. 1524.]
Put bluntly, the allowance was an opportunity for sitting MPs to boost their profile using public funds. If every Member used his or her communication allowance, the cost to the taxpayer of that incumbency benefit would be £6.5 million a year, or some £30 million during the lifetime of a Parliament.
However, it was not just the Conservatives who opposed the communications allowance. The hon. Member for Cannock Chase (Dr. Wright) said:
“It will be an exercise in shameless self-promotion. It will be used to tell people how wonderful we are, and that will be paid for by our constituents.”—[Official Report, 28 March 2007; Vol. 458, c. 1522.]
The hon. Member for Sunderland, South (Mr. Mullin) said it would be “thinly disguised party propaganda” and “vanity publishing.” As we have heard, Sir Christopher Kelly and Sir Ian Kennedy, the chairman of the Independent Parliamentary Standards Authority, have both said that they are against the communications allowance. I, for one, am happy about that.
The point is that communication was not impossible before. There was a very modest amount that could come out of the then incidental expenses provision to allow people to communicate with their electorate. No one would object to some communication, but it needs to be modest—although thinly disguised self-congratulatory communication will perhaps happen at times. The problem is that the £10,000 was brought in as an additional bung by incumbent Labour MPs who did not like having some competition.
I am grateful to my hon. Friend for that. In fact, his intervention leads me on to my next point. The right hon. Member for Streatham spoke of some £283,000 being used by his Lib Dem opponent in the past three years, but from the Electoral Commission reports, I see that only £51,594 has been registered in the past four years. The extraordinary thing is that, in the past year, the Lib Dem candidate’s contribution has been £11,500, whereas the right hon. Gentleman’s constituency Labour party has received £13,000 from trade unions. If we add to that another £10,000, it sounds like the incumbent has an even greater advantage than that received from his own contributions, as revealed by the Electoral Commission. I am sorry to see the right hon. Member for Streatham, for whom I have considerable respect—we have neighbouring offices—go down the route of suggesting that there ought to be public funding for party politics. That is not what I would have expected from him in his swan-song, but he might have been persuaded to do that by colleagues who hope to stick around after the general election.
Given that Lord Ashcroft has been mentioned many times in the debate, I shall put his position on the record. Since my right hon. Friend the Member for Witney (Mr. Cameron) became leader of the Conservative party, Lord Ashcroft has personally given no money to the party. Rather, his company, Bearwood Corporate Services, has donated. The company is properly registered and trades in the UK. Last year, only 1 per cent. of the money received by the party came from Bearwood, which is less than Sir Ronald Cohen, a non-dom, alone gave the Labour party. Moreover, since my right hon. Friend became leader of the Conservative party, 5 per cent. of the total receipts are from Bearwood, and contributions to marginal seats from Bearwood amount to 10 per cent. of the total money received by those seats. For those Labour and Lib Dem Members who are arithmetically challenged, that means that 95 per cent. of party funding and 90 per cent. of marginal seat funding has come from sources other than Bearwood since 2005. Perhaps Members present should take account of what Michael Crick wrote on his blog on 24 February on the fact that Bearwood gave only £80,000 in the last quarter:
“Such is the bounty from other donations, they hardly need Ashcroft’s money anymore.”
It is important to put the record straight on trade union contributions to Labour seats. For example, the hon. Member for Gloucester (Mr. Dhanda) received £47,500 from trade unions in five years, and the hon. Member for Dagenham (Jon Cruddas) received £36,320 from May 2005 to March 2009. In just two donations in one month in 2006 the Labour party in Hammersmith received £25,000. It would perhaps be helpful if the Deputy Leader of the House, when she responds, talked about Lord Paul’s contributions and then his elevation to the Privy Council, or Lakshmi Mittal’s £4 million donation to the Labour party. And of course we must not forget the helpful letter Tony Blair sent his counterpart in Romania, Adrian Nastase, supporting a business that was not registered in the UK. There are other examples. Sir Ronald Cohen gave more than £2.5 million and, incidentally, received his knighthood in 2000. Sir Christopher Ondaatje donated £1.7 million and was knighted in 2003.
Let us not forget the Lib Dems, who received donations from Michael Brown, a convicted criminal. Perhaps they conveniently overlook the fact that a US attorney is still asking for the donations to be repaid. It would be helpful if they did so.
I hope that I have put the balance right. Non-dom donors are contributing a hell of a lot more to the Labour party than they are to the Conservative party.
It is a pleasure to serve under your chairmanship, Mr. Cook, and I join in the tributes paid to Michael Foot. I congratulate my right hon. Friend the Member for Streatham (Keith Hill) on securing the debate. As he said, he is retiring at the next election after 18 years of service. He served most effectively in several ministerial roles and his retirement will be a loss to the House.
Communications, which I think is what we are supposed to be talking about, is at the heart of our work in our constituencies. To represent our constituents effectively, we need to communicate with them on the work we do, as many Members have said today, and on local issues. I know from my experience that communications expenditure can be a useful tool, and several examples have been given in the debate. Last year I had to inform a large number of households in my constituency about work that would be going ahead on the M60 motorway. As with the other cases referred to by Members, if I had not told my constituents about that work, they would not have known.
We have heard some interesting contributions. One could be forgiven for being confused. Although the average communications allowance expenditure is about £8,400 across the House, seven Opposition Members who have intervened in the debate used the communications allowance for 2008-09 to the level of £95,000 between them, and two of those Members spent more than £20,000 and are among only 11 Members who spent as much. It is interesting that they argue against something that they used to a level of more than £20,000.
No, there is not time. Proactive communication, such as the letter I sent to my constituents, is not currently supported, which is a pity. My right hon. Friend the Member for Streatham gave a short history of the allowance. As he said, it was introduced after a period of increased interest in Parliament’s engagement with the public. It came in with that new cap of £7,000 on pre-paid Commons stationery, which had previously been unlimited. In many cases that effectively meant an overall reduction in expenditure, which is important to note. It was a move to proactive communications.
Many items that have been discussed in the debate were previously allowed under office costs, such as websites, and printing and distributing of reports, newsletters and so on, but not petitions, questionnaires or mailings that can be targeted at certain areas in a constituency. They were included in the scope of the communications allowance for the first time, so it was a positive development. To be clear, the decision to suspend communications expenditure was taken to ensure consistency with the new regime for the regulation of parliamentary candidates’ election expenses, which was brought in by the Political Parties and Elections Act 2009. Those restrictions were agreed by the Members Estimate Committee on 23 November. It is important to note that the restriction of expenditure under the communications allowance was judged at that point to be a necessary and short-term measure to avoid any perception of electoral advantage stemming from the use of a publicly-funded allowance.
Let us now look at the future decisions on communications expenditure that could be made. In its report, the Committee on Standards in Public Life was critical of what it saw as the self-promotion contained in some of the materials produced using the communications allowance, a point to which Members have already referred. My right hon. Friend the Member for Streatham commented that it is difficult to see how that could be entirely omitted from materials designed to report on activities of Members. Indeed, local authorities do much the same by producing the newsletters and communications we have heard about.
As right hon. and hon. Members have discussed, the Independent Parliamentary Standards Authority, in its initial consultation document, took a more restrictive view than the Committee on Standards in Public Life, chaired by Sir Christopher Kelly. In fact, IPSA has proposed that communications expenditure should be allowed only for advertising meetings and surgery times and for contact cards. It is important to note that the Committee on Standards in Public Life recommended that the allowances scheme should continue to support proactive communications funded from overall office costs, rather than from a separate allowance. That is a key point, as Members have referred to a decision to close that down, which has not yet been taken.
The Government accepted the Committee’s recommendations but expressed a consistent view in their evidence to IPSA. That evidence stated that the new allowance system should provide Members with adequate resources to carry out their work effectively on behalf of their constituents and that allowances should recognise and underpin the vital link between an MP and his or her constituency.
My right hon. Friend the Member for Streatham made some interesting points on the need to safeguard against the advantage of a wealthy parliamentary candidate over candidates of average means. It has been argued that communications expenditure could give that advantage to incumbents, but I think that it has been useful for the House to hear that advantage can lie elsewhere. My hon. Friend the Member for Pendle (Mr. Prentice) also raised the possibility of a more effective limit on pre-election expenditure, and I trust that Justice Ministers will consider that.
Final decisions on a new allowances scheme are now being made by IPSA. A powerful case has been made in the debate to consider the resources needed by Members to communicate effectively with their constituents, and my hon. Friend the Member for Battersea (Martin Linton) underlined that important point. I trust that board members of IPSA will note the views expressed today, and I will ensure that a copy of the Hansard report of the debate is drawn to their attention.
Private Tenants and Leaseholders (London)
I am pleased that you are chairing this debate, Mr. Cook. In a sense, it is a continuation of yesterday’s debate on housing in London, which was about the terrible shortages of housing, particularly of affordable rented accommodation. [Interruption.] I think I am losing the attention of some of the Members in the Chamber.
Thank you, Mr. Cook. I shall start again.
I am pleased that we are having this debate today. In many ways, it is a continuation of yesterday’s debate, which was about housing shortages in London, and the overwhelming need for rapid construction of a large number of affordable rented council places.
My constituency has, roughly speaking, about 40 per cent. of its residents living in council-owned or housing association accommodation, a fast-declining level of owner occupation—probably about 30 per cent. and falling—and the remainder of its residents in private rented accommodation, which is the fastest growing sector and one that causes many tenants and me a great deal of concern. I shall come on to that in a moment.
We have to open the debate by recognising the need for everyone to have a decent home to live in, in security, where they can bring up their children in reasonable space and be part of community life. Because of the large growth in the private rented sector, there is huge population turnover, certainly in my constituency, which is in inner London. Indeed, I suspect that many colleagues in other inner-London constituencies and inner-city constituencies all over the country experience this problem. It is disruptive for families, particularly children, who have to move schools as a result of it.
In short, we have three forms of private sector tenancy in this country. The biggest by a long way is the assured shorthold tenancy, which provides limited security under the Housing Act 1988. The assured tenancy provides greater protection than assured shorthold tenancies, but there are many fewer of them. The last kind of tenancy, of which there is a very small number, is the regulated tenancy, which is a derivative of the Rent Act 1977. The then Labour Government were resolute in controlling tenancies, providing security of tenure and controlling rent levels. It is that issue that I want to deal with first.
Rents in the private sector are absolutely enormous. Typically, to rent a flat of any reasonable size in my constituency would cost £250 to £300 per week, and upwards of £400. I have seen some flats at £500 per week. I constantly feel a sense of anger when I am in my advice bureau on Thursdays and Fridays and people come in to see me who are living in privately rented former council properties. I know that the council rent for an exact equivalent of the property would be around £100 per week, but they are paying £300 or £400 per week, the majority of which is paid by housing benefit. Somebody who had the good fortune to buy a council property under right to buy at some point in the past is making £300 per week more than they would have had to pay in rent if they were in council accommodation. That has an impact, which I will come to in a moment.
A serious problem that I pick up on all the time is that of repairs done, or not done, by private landlords. I am not saying that all private landlords are bad landlords, or that they are unreasonable or difficult people. They are not; some of them are extremely decent and generous people who manage their properties properly. However, I come across a large number of cases of people in private rented accommodation—they have been referred by the council or have got it themselves—who find it difficult to get any repairs done. They know full well the danger that if they complain too strongly, their tenancy will come to an end. The issue is one of security of tenure, as well as decent levels of repair and complaints not being satisfactorily dealt with. Most tenants feel a sense of disempowerment in challenging a private landlord on what are often basic repairs.
There is a cost to all of that in housing benefit and local housing allowance. In my constituency and, I suspect, that of my hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter), who has just joined us, and those of many other inner-London MPs, the local authority is not able to put many people from the waiting list into existing council accommodation, so, through the rent deposit scheme, it puts them in private rented accommodation. Others simply go into private rented accommodation because they cannot even get on the council waiting list and certainly have no chance of buying anywhere of their own. Therefore, they claim housing benefit.
The housing benefit costs to all of us of high private sector rents are absolutely enormous. I have tabled some parliamentary questions on the subject. Generally, if a person on jobseeker’s allowance or income support is in council or housing association rented accommodation and is entitled to housing benefit, they get 100 per cent. of the benefit because they are in socially rented accommodation. If they are in private rented accommodation, they get a proportion of it. I fully understand the desire of the Department for Work and Pensions to drive down housing benefit costs, but the reality is that we then end up expecting people on housing benefit to pay on top of what they receive in housing benefit in order to maintain a roof over their head.
I come across constituents who are paying £30 or £40 a week out of benefits on rent, in addition to what they receive as housing benefit. We all know what the levels of income support and jobseeker’s allowance are—those people are left with hardly anything on which to survive. We have to recognise that there are enormous costs here.
Those who administer the housing benefit system will say that people are required to pay the equivalent of a local market rent—no more and no less. I can understand where that philosophy comes from, and the calculations that they make on many occasions, but the reality in large parts of inner London is that the payment of housing benefit fixes the market rent and feeds into the voracious appetite of the market continually to increase rents. I am not saying that there is a simple solution to this, but it is very expensive for the public purse, and it does not much help the people whom it is designed to help. We need a radical reform of housing benefit, and the Minister will probably agree with that. I am not sure whether he has the solution today. If he has, I will stop now.
The benefit trap is also a serious problem. If a person on jobseeker’s allowance is encouraged to find a job, as they are by the jobcentre, and they get a job, that is good. However, at present, they will lose housing benefit fairly quickly, and, as a result of that, they will be much worse off in work than they would be on benefit. If they have to pay, say, £300 a week in rent, they must get a job that pays at least the equivalent of jobseeker’s allowance plus £300 a week just to break even with their situation while they were out of work.
The Government have recognised that, have increased the amount of time for which housing benefit is paid, and have increased the in-work benefit, but that does not solve the longer-term problem of those on low pay, or those moving back into the labour market. Typically, women who are single parents move back into the labour market in their late 20s or early 30s. They are unlikely to get jobs on £25,000 or £30,000 a year in order to meet their enormous housing costs. We must see what we can do to improve that situation.
A great deal of evidence supports the fact that there are problems. The Government’s response to the private rented sector housing review, published in May 2009, stated:
“Moving forward in partnership with landlords, tenants and local government representatives, we should continue to monitor and review the regulatory and incentive framework to ensure it is fit to deliver the consistent high standards and professionalism.”
I welcome what has been done in that respect. I also welcome the attitude that the Government are now developing towards security of tenure in the private sector and reforms of the housing benefit system. I hope that the Minister is able to give me some relatively good news in that respect.
I should like to mention the situation faced by leaseholders. Large numbers of people bought their council property under right to buy, which was introduced in the early 1980s. With the right to buy a street property—a house—goes the freehold. That is a transfer from the public sector to an individual—the considerations of leaseholders clearly do not apply. However, those who buy flats always get a lease, with which goes a number of things, particularly service charges and capital costs, which apply to the large number of people who have purchased leasehold flats. The issues facing local authority leaseholders—I will mention housing association leaseholders in a moment—are similar, but not identical.
Some local authority leaseholders bought into council ownership in the 1980s without any real consideration of the longer-term implications of doing so, what capital works were required on the property or what the service charges could be. Many fly-by-night solicitors gave inadequate advice at that time, simply saying, “Buy your flat. You’ll be okay.”
When capital works come along—I support and welcome the decent homes standard and all the intentions behind it—they can be catastrophic for poorer older people who bought into council accommodation many years ago. I came across the case recently of an elderly woman, a retired nurse, who bought her council flat in the early 1980s and was now faced with a massive major works bill that she could not afford to meet. She could not get a mortgage because of her age and seemed unable to do anything about that other than to move out, share a small flat with her brother some distance away, and rent out her former council flat to pay the cost of the capital works—to do up the flat that she could not afford to live in. She has got herself into a crazy bind. I know that was not the intention behind those measures, but there are serious issues to consider.
The high costs of capital works and the often limited transparency in respect of those, in the perception of leaseholders in council accommodation, also need to be considered seriously. I am sure that colleagues from London—we have been joined by the hon. Member for North Southwark and Bermondsey (Simon Hughes)—would bear out the great concerns of many living in council leasehold accommodation about the costs involved and their difficulties in meeting such bills. One asks for flexibility on the part of the councils and for a sense of fairness in the allocation of funds. Many hon. Members have become experts in the costs of scaffolding, surveying and carpentry, and every other cost that results from such works.
I shall now mention the important matter of leaseholders put in places by housing associations and people who have bought leases or part-ownership from housing associations. The idea behind that strategy was that those who did not own any property would be able to buy a share of a property and possibly staircase up their proportion of the ownership and pay rent on the remainder. In addition, they would have to pay a service charge, as all leaseholders do, and pay either into a sinking fund or pay their share of capital costs when major works came about.
To prepare for this debate, I spent an hour or so last Sunday morning talking to a group of leaseholders in a housing association development, which happened to be a Family Mosaic development, but the issues probably apply equally to all housing associations. Those leaseholders were concerned that, prior to 2002, building and repairs contracts were let by individual tender on a process that had been going on for a long time under a value-for-money regime, which seemed fair enough. Under that arrangement, leaseholders living in property owned by councils or registered social landlords were protected by process under section 20 of the Commonhold and Leasehold Reform Act 2002, in that they had to be consulted on any work that they would be asked to pay for—usually more than £250 per property—so there was a quite open process of consultation and agreement on what the costs would be. In 2002, that culture was changed and the registered social landlords—the housing associations—signed huge contracts with building firms to undertake long-term maintenance on many hundreds, if not thousands, of properties over several boroughs.
As a result, the local control went away. One suspected that the partnership arrangements with the housing associations provided nice work for the building companies because they knew they were getting paid, but more than occasionally there were serious questions about the levels of so-called savings made under those economies of scale. In reality, a lot of people were paying large sums for work that they were not clear about. Electors in my constituency have shown me cyclical maintenance bills that have risen astronomically between 1999—before this system—and the current regime coming into effect. With that process goes a lot of tendering and sub-tendering of repairs.
I would be grateful if the Minister told hon. Members in this Chamber what kind of investigative and regulatory regime is placed on the housing associations in letting major repairs and maintenance contracts and—this is serious—what level of real involvement of leaseholders there is in most housing associations in any kind of meaningful consultation. I detect that the bigger the housing associations get, and the bigger the contracts get, the more remote becomes either the operative in the housing association—the official—or the tenant. I should be grateful if the Minister gave us some news about the powers and operation of the Tenant Services Authority.
To combat this scandal I would be grateful if the Minister considered the reintroduction of proper consultation on all cyclical maintenance contracts with tenants and leaseholders, or with appropriate residents’ groups, so that there is some degree of transparency and openness in the whole process.
I am proud and happy to live in a vibrant, exciting area in which many people are making huge community contributions. But unless we can deal with housing, give people security of tenure and lower the overall housing costs for large numbers of people, the pressure that the market is applying will gradually become an unstoppable force, driving away the poorest and most needy people from inner London and other equivalent inner-city areas of this country. I am grateful for this opportunity to bring these matters to the attention of the House. I look forward to the Minister’s reply.
I congratulate my hon. Friend the Member for Islington, North (Jeremy Corbyn) on securing the debate. He is right: it seems as though it is the second half of the debate that was curtailed yesterday and that we are here to conclude that discussion.
I congratulate my hon. Friend on his commitment to improving the quality and quantity of housing, particularly affordable housing, for his constituents. He has campaigned for that ever since becoming a Member of Parliament. He has raised a series of issues, and I shall try to deal with each in turn, starting by picking up on some of his points about local authority leaseholders.
Like all home owners, local authority leaseholders have a responsibility to maintain their homes, and that includes contributing towards the cost of major repairs and refurbishments by their landlords to the buildings containing their flats and communal areas. We know that more than 10,000 council leaseholders, particularly in London, have received bills of £10,000 or more for major works and that some bills are much higher that. My hon. Friend is absolutely right about the problems and distress that that may cause for leaseholders.
We have put in place measures to protect leaseholders and to give landlords discretion to help, including directions dating from 1997 that require local authorities to cap charges for major works at £10,000 when works are funded from some specified Government grant programmes, or when specified criteria are met—for example, when the leaseholder would suffer exceptional hardship in paying the bill. Local authorities must consider each and every application against the criteria set out in the discretionary directions.
Local authorities must provide loans on specified terms to help leaseholders to pay service charges when requested in specified circumstances, and may offer loans on terms of their choosing in other circumstances. Local authorities may also buy properties back from leaseholders, and the Government part-fund that, paying 35 per cent. of the cost when it exceeds £50,000 in any year by allowing them to retain more capital receipts. Local authorities may spread payment of bills for major works over several years, and offer interest-free periods. They may also defer payment until the property is sold, charging interest in the meantime.
We have empowered local authorities to offer equity loans, and to purchase equity shares in homes on terms agreed with the leaseholder. We have ensured that leaseholders have statutory rights, including the right to challenge the need for major works and the cost of such works when they are believed to be unreasonable. They may do that by applying to a leasehold valuation tribunal. Leaseholders also have the right to be consulted and to comment on major works proposed through a statutory consultation process.
We know that some leaseholders are still concerned about large bills and believe that they have only a limited say in the scale and timing of the works. Some find the LVT process intimidating, even though LVTs may find in their favour. Some consider it unfair that the Government cap some bills at £10,000 but not others, and that councils will not use all their powers to reduce the burden. There have been calls for the Government to cap all large bills for major works at no more than £10,000.
Evidence suggests that, for many leaseholders, those options work, but clearly a significant number still face problems. I have mentioned my hon. Friend’s committed work, but I pay tribute also to my hon. Friends the Members for Islington, South and Finsbury (Emily Thornberry) and for Regent's Park and Kensington, North (Ms Buck), who have campaigned tirelessly to highlight the position of elderly leaseholders on low incomes and of working couples and families who already have mortgage commitments in particular.
In the Government’s statement to Parliament in March 2007, we made it clear that we wanted to address the problems, and we followed that up with a number of measures. We encouraged local authorities to inform and advise all leaseholders facing particularly high bills for major works about the full range of payment options available and to share best practice to ensure that that happens everywhere. We arranged with the Greater London authority for boroughs to be invited to bid for private sector renewal funding from the regional housing pot for 2009 to 11 to assist leaseholders who cannot pay by any other means.
We increased funding for the Leasehold Advisory Service—LEASE—so that it could develop its advisory, alternative dispute resolution and mediation services, for which demand continues to increase. As a result, LEASE is on target to deal with approximately 38,000 leasehold inquiries by the end of the financial year—an increase of almost one third on the previous year. We have said that work will continue with lenders and independent financial advisers, landlords and leaseholder representatives to develop the use of existing equity release and equity loan schemes. As promised, we legislated in the Housing and Regeneration Act 2008 to enable local authorities to offer equity loans to leaseholders and to buy back shares in properties
We have also commissioned an external review of how social landlords are dealing with leaseholders’ problems with bills for major works. That report is being finalised and we intend to build on its findings to develop a way forward that is fair to leaseholders, landlords, tenants and taxpayers. We are committed to finding ways to help those leaseholders who are genuinely unable to find a way to pay.
I listened with great interest to what my hon. Friend the Member for Islington, North said about the problems facing housing association leaseholders. I am aware that service charges, including charges relating to management, may be a cause of concern to those who have purchased their property in some developments through the shared ownership route.
I am pleased that my hon. Friend the Member for Islington, North (Jeremy Corbyn) has secured this debate. I agree with him that it is related to yesterday’s debate on affordability. Today, we are discussing the other end of affordability. Will the Minister consider seriously the problems facing council leaseholders who, because of the poor state of repair of their properties, and housing association leaseholders who, because of the entry costs and service charges, are finding that their properties are not affordable; and whether we should consider the definition of affordability for people who live in leasehold accommodation that is allegedly low cost? Tricks are often played on them, and they are told that something is affordable when it is not.
That is an important point, which I will come to.
Purchasers living in flats are required under the terms of their lease to contribute towards costs through service charges, although providers may set up and manage a sinking fund to cover the cost of major works when the lease allows. When leaseholders contribute to a sinking fund, it may help to lessen the impact by spreading the cost over a longer period and minimising demands for service charges when the works become necessary. The Tenant Services Authority requires registered social landlords offering shared ownership schemes to explain the features of the scheme, so that applicants may make informed choices on whether the scheme is right for them. Applicants will have the level of service charge, rent, mortgage and other outgoings taken into consideration to determine whether the applicant is able to afford the purchase, as well as their ability to sustain home ownership in the long term. The TSA also expects RSLs to levy service charges that reflect the actual cost of services provided, and any increases should reflect the rise in actual costs. The Homes and Communities Agency expects grant-funded shared ownership schemes to be affordable to the intended client group.
Shared owners contributing towards the costs of repairs and maintenance through their services charges may challenge them through the leasehold valuation tribunal when they believe the charges to be unreasonable, and they may receive free advice about that and other rights available to them from the Leasehold Advisory Service. I am aware that service charges, including charges relating to management, are a matter of concern to those who have purchased their property. Free legal advice is available on the various remedies available to shared ownership and other leaseholders when faced with a service charge demand that they believe to be unreasonable.
In December, the Government issued a consultation paper setting out how we will reform housing benefit to deliver a simpler and fairer system of housing support that pays a fair rate of benefit to customers while protecting taxpayers. It also sets out our long-term aspiration to move towards a housing tax credit that is properly integrated into the wider tax and benefit regimes. As my hon. Friend the Member for Islington, North knows, housing tax credit is not something that we can implement overnight. Such changes will take time to achieve if they are to be affordable and achievable. We will ensure that the changes go hand in hand with wider housing policies to build more social and affordable housing in mixed communities.
The consultation sets out our next steps for reforming housing benefit and includes those measures that we want to implement quickly, as well as those that we will deliver as part of our longer-term reform of the benefits system. As part of the consultation, we sought views on how to set fairer and clear benefit rates. The local housing allowance is set at the median level of rents in an area and is intended to ensure that approximately half the properties available to rent in any area are affordable to people receiving housing benefit. That balances the needs of customers, enabling them to afford decent, quality accommodation, with the needs of taxpayers not to subsidise unreasonably high rents.
We must consider again how we set local housing allowance rates, and examine the effect of areas with pockets of high rents in driving up the median. We also want to consider how to define geographical areas for local housing allowance rates. We recognise that rents vary significantly throughout the country, but in London they are typically much higher than in other areas. High rents mean that, after housing costs have been taken into account, people are more likely to live in a low-income household in central London than in any other area of the country. There also tends to be wider variation—
Land Registry Office (Peterborough)
I am grateful for the opportunity to highlight a vital issue affecting my constituency, which is the loss of more than 300 high-quality, white-collar jobs at the Peterborough Land Registry, mooted for September 2011 under the Government’s accelerated transformation programme. Nationally, there are plans for 1,500 redundancies, and hon. Members may wish to intervene to highlight specific issues in their constituencies.
I raised the issue during the Christmas recess Adjournment debate, and the Deputy Leader of the House was as good as her word and passed on my concerns to the Minister. He wrote me a helpful letter dated 14 January this year, in which he confirmed:
“Firm decisions will not be taken until February.”
We look forward to the publication of the response from Her Majesty’s Land Registry in due course.
I have serious misgivings about the proposals by the Ministry of Justice and the chief executive of the Land Registry, the chief land registrar, to close five Land Registry offices in the so-called greater south-east. To add insult to injury, if my constituents are made compulsorily redundant, the timetable may preclude them from receiving severance payments that are as advantageous as those of people doing equal jobs in three other Land Registry offices—namely Stevenage, Croydon and Portsmouth. We await further details of discussions with the Cabinet Office on that specific issue.
In November last year, I had the opportunity to speak to the chief land registrar, Peter Collis, to express my dismay and disappointment at the proposals. I also had a round-table meeting with a couple of dozen members of Land Registry staff at the Touthill close office in Peterborough city centre, on 25 November. I pay tribute to all those who work at the Land Registry for their professionalism, stoicism and quiet determination, and the reasonable approach that they have taken in this worrying period of their working lives.
I congratulate my hon. Friend on securing the debate. I have an interest in the matter as I have an adjoining constituency to his in which some of those who face unemployment reside. Does he agree that those people are extremely talented individuals and well experienced in the field in which they work? It will be a loss to the Land Registry if they are not properly looked after, but are simply discarded. Their skills are invaluable in assessing the job that they do.
It is perverse that the Land Registry proposes to dispense with the services of people with knowledge, skills and experience gained over a number of years when it recruits new people who do not have that level of skill and expertise.
There is significant concern about the evidential basis used by the Land Registry in making the business case published by Ministers on 22 October 2009. The former chief land registrar, John Manthorpe, has prepared a detailed document responding to the accelerated transformation programme, putting a different slant on the information provided by the Land Registry. Mr. Manthorpe, who we should remember was a distinguished chief land registrar from 1985 to 1996, has described the plans for closure as, inter alia,
“quite disproportionate and unnecessarily expensive”,
based as they are on the historically low level of property and mortgage market activity.
I will focus my remarks on the implications for the Land Registry office in Peterborough, but I feel sure that other hon. Members, perhaps including my hon. Friend the Member for Tunbridge Wells (Greg Clark), will argue the case for their own Land Registry offices. Many people have provided detailed responses to the consultation.
I rise to make a brief intervention and to congratulate the hon. Gentleman on securing this important debate, which has implications for us all in terms of Land Registry closures in the south-east. I would like to underline his point about the prospective expense as it applies to Croydon. Would it not be ironic for the Land Registry to find itself making a huge financial loss when selling the building in Croydon that it invested in recently—Trafalgar House—as it will lose about £15 million? That would seem to be a poor performance by an organisation that is supposed to be an expert on property.
The hon. Gentleman, my erstwhile hon. Friend, makes an extremely astute point. I have yet to be convinced that the Land Registry has fully thought through the financial ramifications of the disposal of the various offices across its estate, and the cost to the taxpayer.
I congratulate my hon. Friend on securing this important debate. Does he share my view that across all public services we need to find a way to provide those services most cost-effectively? The issue is whether decisions that might be made this year could prove more expensive to undo in future years should demand increase. That is the essence of the matter—is the economic case that is being prepared robust enough or, if it is wrong, could it lead to further public expense?
My hon. Friend is absolutely right and makes an astute point. In my opinion, it is appropriate to look again at the Lyons review, which is now somewhat historical, and at how it impacts on the financial and resource allocation decisions of the Government in their dying days.
I want to focus on the issues of staffing premises, the implications of a misapplication of the Lyons review and the economic impact on the city of Peterborough. The proposals pay little heed to the long-term experience of the staff at Peterborough, who are to be forced to accept compulsory redundancy at considerable cost to the public purse. Under Mr. Manthorpe’s alternative plan, all 19 current offices would remain open, with a continuation of the natural wastage programme through retirements, resignations and transfers to other Government offices and Departments in my constituency—for example, Jobcentre Plus, the Environment Agency and Natural England—as well as the continuance of the highly successful voluntary severance scheme, and the sale and lease of surplus office capacity across the Land Registry estate nationally.
The Land Registry business case advocates the recruitment of 594 new, inexperienced staff across the 12 retained offices post-2011, and the removal of 1,500 experienced, dedicated and skilled staff through compulsory redundancy, and a cost to the Exchequer, as alluded to by my hon. Friend the Member for Tunbridge Wells, of £186 million. Those plans do not stand up to scrutiny and are wrong-headed, short-sighted and flawed for reasons that I will elucidate.
On premises, there is an acceptance that the building occupied by the Peterborough Land Registry is too big and expensive for the staff complement occupying it, and the Government must, of course, address issues of cost and surplus estate. However, there is the capacity to let the excess space to the Department for Environment, Food and Rural Affairs, for example. The lease expires in 2013 and will need to be paid whether or not the building is occupied post-2011. Early surrender of the lease would be at a premium.
It is understood that DEFRA is interested in taking a sub-lease of at least one of the vacant floors in Peterborough, and that negotiations have progressed to the extent that occupation is expected to take place this month. The projected rental income for a single floor of the office is about £162,500 per annum, and the cost for occupying a floor, including rates and other fixed costs, is around £315,300 per annum. That proposed rental income represents approximately 20 per cent. of the rent paid for the Peterborough office, or a 20 per cent. saving on annual office costs. However, if the decision to close Peterborough office is confirmed, DEFRA may reconsider its position and the benefit of that income will be lost.
Valuation Office Agency data show that in rental terms Peterborough is significantly less expensive than many other localities. Headline rental values for the type 1 accommodation in the Peterborough office are £125 per square metre, compared with £145 in Leicester, £150 in Nottingham, £240 in Croydon and more than £1,000 in central London. There is no reason why the Peterborough office could not move to alternative, smaller rental premises in the city on expiry of the lease in 2013. For instance, Trinity Court, just half a mile from the current building, is being let at the moment for less than £100 per square metre.
Peterborough city council and the East of England regional assembly published a study in August 2004 that maintained that Peterborough was an ideal location for civil servants relocating out of London and the south-east under the auspices of the Lyons review, not least because the city has excellent rail and road links north to south and across the country to the midlands and the north-west of England.
The case for maintaining an office in Peterborough is that it would be considerably cheaper than maintaining one in London, and the office in the Peterborough constituency already has the necessary IT, telephone and furniture requirements. In the view of the property consultancy King Sturge in its report for Sir Michael Lyons, and according to the Lyons review and the Office of Government Commerce guidelines, it makes sense for the head-office functions to be located in the existing Peterborough office. That would reduce the Land Registry’s underlying cost base. The Peterborough building is leased, there is no capital asset value to be unlocked and it would otherwise be a continuing drain on resources through redundancy payments.
We are talking about people’s jobs and, in particular, older workers who have shown dedication and loyalty over the years to this important specialist work. This issue is about human capital and human resources, and the accumulation of knowledge, skills and experience, especially legal resources. Bluntly, lawyers are extremely expensive for the Land Registry to recruit, train and retain.
Let me move to the Lyons review criteria. The Lyons review has been interpreted wrongly in the Land Registry’s business case, and I want to spend some time on that misapplication, as it is integral to my case for a review of the decision as it affects the Peterborough office. The mandatory OGC guidance issued on 5 January 2009 relating to the Treasury approval of accommodation proposals states that there will be a strong presumption that existing civil estate properties in all the Government office regions outside London and the south-east will be used to meet new accommodation demands from Departments. It can be argued that, to comply with the review, it is not necessary to close the Peterborough office.
It is wrong to allocate a so-called red marking to the office by suggesting that it is non-compliant with the Lyons agenda. The criteria have obviously been misapplied. By that, I mean that Peterborough has been allocated a position as part of the greater south-east, but it is not Oxford, Milton Keynes, Surrey, Hampshire or Kent. It is on the border with the east midlands and it is in the north-west corner of the eastern region. It is not in the greater south-east and there was a clear error about that in the decision taken and the case made for closure.
Bizarrely as regards the Lyons report, table 4 of annexe G of the Land Registry document, on assessment against retention criteria, assigns a green marking to the Portsmouth office, confirming that it is compliant with the Lyons agenda. That is despite the fact that Portsmouth, the last time I looked, was in the county of Hampshire in the south-east. If the criteria had been correctly applied, the Nottingham and the Leicester offices would have been deemed more suitable for closure than Peterborough. The case for closing Peterborough in preference to other offices has not been correctly made.
In response to the report, Her Majesty’s Treasury set out in its letter of 23 March 2005, as part of the Government’s efficiency programme, the requirements for Treasury approval for all substantial accommodation proposals in London and the south-east. The protocol applies to new property leases, as well as lease renewals and extensions. It refers to the presumption against locating public sector activities in the greater south-east, which is defined as the whole of London, the south-east and the east of England. However, the protocol states at paragraph 5 that that requirement for relocation does not mean that activities already based in the east of England are expected to relocate outside the region when new accommodation needs are being considered.
At paragraph 6, the protocol confirms that proposals for accommodation in the east of England region in respect of public sector activities already located in the region are exempt from external Treasury oversight and Chief Secretary to the Treasury approval.
I want to finish by examining the significant impact on my constituency of the potential closure of the Peterborough office. Of all the proposed office closures, the Peterborough one will cause the greatest pain to staff due to the limited prospects for comparable work in the city, with no capital gain to the organisation.
The advice sought by the accelerated transformation team has been on the basis of socio-economic profiling of the areas that currently have Land Registry offices and with reference to the Government’s regeneration framework, to which all Departments are signed up and which the OGC is keen to see applied in decisions on the location of Government agencies. Although it is apparent from the Department for Communities and Local Government advice that the deprivation in Peterborough is not the same as that in, for instance, Hull and Birkenhead, the local economy and job market should be carefully considered.
Peterborough is a city with significant areas of deprivation. One ward—Dogsthorpe—is among the most deprived wards in England, some parts of the city are within the 3 per cent. most deprived and a further seven wards are deemed to have high levels of deprivation. National indices of deprivation rank Peterborough 80th out of 354 local authority areas. The east of England may be seen on some indexes as comparatively affluent, but it is important to assess the characteristics of specific locations. The male unemployment rate in the Peterborough constituency is 10.4 per cent. We have seen significant job losses over the past two years involving Pearl Assurance, Indesit, the city council, the Freemans catalogue company, Ideal Shopping Direct and the Norwich and Peterborough building society. Wage and skill levels are below the east of England and the south-east regional averages.
Therefore, the business case for closure of the Peterborough office is contrary to and wholly inconsistent with the regeneration framework and Government guidance, and the socio-economic impact has not been sufficiently or correctly considered in the wider context. Peterborough and its wider sub-region have a very different economic profile from most of the south-east, which should be taken into account when assessing the socio-economic impact of the proposals.
The Land Registry has failed to make a coherent or logical case for the closure of the Peterborough office in September 2011, but there is an alternative, as enunciated by the Public and Commercial Services Union individual consultation involving members of staff at the office. The Land Registry has brought forward plans that are financially and organisationally at variance with the Government’s objectives and economically damaging to my constituency, and that involve the straightforward misapplication of the decision-making criteria in respect of the Lyons review. For those reasons and with due cognisance of the contribution of the staff now and in the future at the Land Registry in my constituency, I urge the Minister to think again, review the plans and level the playing field so that the Land Registry in Peterborough can continue its excellent work.
I start by congratulating the hon. Member for Peterborough (Mr. Jackson) on securing the debate. Since the Land Registry launched the consultation, I have met a number of hon. Members, including my hon. Friends the Members for Stevenage (Barbara Follett), for Portsmouth, North (Sarah McCarthy-Fry), for Plymouth, Devonport (Alison Seabeck) and for Plymouth, Sutton (Linda Gilroy). I have also received a number of representations from other hon. Members and had exchanges in the House with the hon. Member for Croydon, Central (Mr. Pelling). Later today—very shortly—I am to meet the hon. Member for Tunbridge Wells (Greg Clark).
I understand all the concerns, including those that the hon. Member for Peterborough has raised here today. This is a very difficult time for the Land Registry. I agree with his remarks about the quality of the Land Registry. The organisation is fundamental to our national way of life. We are a notably—notoriously—home-owning country and the Land Registry plays a fundamental role in that process of home ownership. Most of us have had experience of it at some point, and the overwhelming majority of people are satisfied with their experience of the Land Registry. In my experience as a Minister, it is an extremely well run, well managed and well staffed organisation. That is the case everywhere one goes. It is worth pointing out that, in the customer surveys conducted in 2009, 95 per cent. of customers rated the Land Registry’s overall performance as good, very good or excellent. Very few organisations can match that level of customer satisfaction.
I am grateful to the Minister for giving way and I shall be brief. Given that the property market is showing signs that it might pick up in the not-too-distant future, and assuming that that will happen, does not the Minister think that now may be the wrong time to get rid of people involved in the property business and in registering property transactions? We do not know when the market will pick up, but it can go only one way.
I thank the hon. Gentleman for his gesture of confidence in the Labour Government and their administration of the economy. I am not sure that he altogether intended that compliment, but I accept it.
I understand the point that the hon. Gentleman makes. It has been made by several hon. Members over the past few months. It is important to recognise that the transformation programme is not being driven by the present property market. As we all know, the downturn has been savage, but there are signs that the market is picking up. No one knows quite how far or how fast, but my expectation, like his, is that it will return to growth. However, that is not the only thing driving the transformation programme.
The Land Registry’s business is changing. It is an efficient organisation—I referred a moment ago to the level of customer satisfaction—but the organisation is also well managed. I pay tribute to Peter Collis, the recently departed chief land registrar, who was in charge of the registry for many years and during a difficult period of transformation. I am confident that the new chief land registrar, Marco Pierleoni, will be an excellent steward of this precious British institution.
I am sure that all hon. Members here know that the staff of the land registries in their constituencies are committed to their work. Many have served for a long time; for some it has been a family business, with generations of the same family working there. Their high levels of commitment to the business and of professionalism are widely recognised. In those circumstances, it is particularly difficult for staff to have to go through such a process. We recognise that, as do the Land Registry management, and it is important to put that on the record.
I am grateful to the Minister for giving way. I am grateful also for him agreeing to meet me later today. Given the almost family feeling that there has been in the Land Registry over the years, which the Minister acknowledges, is it not invidious that the redundancy arrangements for different offices should be different, when people have served with great distinction in the same organisation for a long time?
I would have spoken about that later, but I shall do so now as the hon. Gentleman’s remarks have precipitated it. As a Minister, I am responsible for the operations of the Land Registry, but it is a trading fund and is operationally independent. He will forgive me for not commenting on what are essentially operational matters.
I shall try to get away with making two points. Is that not a comment on the way in which British politics no longer works? The Minister is constantly saying that everything is at arm’s length, but it means that there is no accountability. If he is accountable, perhaps he should take account of the fact that the Croydon office is shown to have the lowest unit costs in staffing terms. Is not the reality that it is the property portfolio that is driving these decisions, rather than what might be regarded as marginal revenue issues such as the general efficiency of each office?
I should congratulate the hon. Gentleman on the way he spliced a set of questions into one rather elegant intervention.
In the time remaining to me, I shall deal with the question of operational independence. I am the Minister and I am accountable. I have taken a keen interest in the process over many months. I have met a large number of parliamentary colleagues and had several meetings with the trade unions involved and with individual members of the Land Registry. I consider myself accountable for the outcome, and I am happy to be held responsible for it.
So far, the arrangements have worked particularly well. We have seen how satisfied customers of the Land Registry are and that it is an efficient organisation. However, it has to change with a changing world. All organisations have to do that. Governments and politicians have to do so, and so does the private sector. That is the world that we live in—a world of rapid change—and good organisations respond effectively and rapidly to that change. That is what the Land Registry is doing.
I am sorry if this seems a bit of a tease, but I have to tell hon. Members that the Land Registry board has considered the consultation thoroughly and taken account of it. I can say from my own knowledge and experience that it has been open and transparent. It has gone into the consultation with a genuinely open mind. It has made its recommendations, which are being considered by Ministers and, as always, by the Treasury. The outcome of the process will be announced very shortly. I hope that hon. Members will pass that information on to their constituents.
I know that it has been a difficult time, but we are approaching a resolution. Ministers and the Land Registry itself are conscious of the need to bring the uncertainty to an end. We understand that it has been destabilising, but it is worth remembering why we are in this position.
The hon. Member for Peterborough referred to the downturn in the property market. It is worth setting out how severe it has been. Transaction levels, which are the key factor for the Land Registry, will have fallen from 16.1 million in 2007-08 to a projected 10 million in 2009-10. The Land Registry receives no central funding because it is a trading fund; it depends on the fees that it receives for services rendered. It made a loss of £130 million in 2008-09 compared with a surplus of about £70 million in 2007-08.
It is a severe problem for any organisation to have to change the nature of its business. The Land Registry has been well run for many years and it has had reserves, but it has to respond to the changing market. No one knows what will happen to the property market, and the trading fund has to be prudent in its approach. However, underlying all that is a fundamental change in the way in which it does business.
It is important to remember that the blueprint for the transformation programme was published nearly four years ago in 2006. It was clear then that the Land Registry would have to become a smaller organisation and deal with its customers differently. An increasing range of services have become available online and there have been improvements in efficiency, as we expect of all public sector organisations.
The Land Registry cannot have it both ways. It cannot say that we are using the blunt instrument of the Lyons review as a means to weed out the wheat from the chaff. However, on 14 January the Minister wrote to me, saying:
“Consistency with the Lyons Report was one of a range of criteria used in arriving at the proposals.”
Will he confirm that Ministers are disregarding the Lyons review—indeed, as we have established, they may be misapplying it—and considering other factors? If so, what are they?
If the hon. Gentleman can be patient for a few days more, I will happily take his representations on whether the review is a blunt instrument. I shall be happy to explain then the rationale for the decisions that have been taken. I ask him to suspend his judgment about how blunt an instrument it has been for a few more days; we can continue the discussion then.
I assure the hon. Gentleman that he will never irritate me. I am never irritated. However, if he will forgive me, I shall give not even a hint of the outcome of the process. All that I can say is that I will be happy to receive further representations on any points once the announcement has been made. Until then, I hope that all hon. Members will suspend their judgment—on blunt instruments, political partisanship and the rest of it. Everything will be revealed shortly.
This matter is fundamentally important. The fact that so many hon. Members are here after the House has risen—for the record, the House has adjourned—shows how important it is. I shall be happy to continue our dialogue once the announcement has been made. I am not saying that I can interfere with it, as the Land Registry is operationally independent. There is no doubt that we are talking about an organisation that is responding flexibly and efficiently to a changing world. The property market is changing dramatically and none of us knows where it will end up. It is important that the Land Registry is in a position to respond efficiently, flexibly and rapidly to change.
Sitting adjourned without Question put (Standing Order No. 10(11)).