Wednesday 15 June 2011
[Mr Gary Streeter in the Chair]
SMEs (South of England)
Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Prisk.)
Thank you, Mr Streeter, for allowing me to raise this important topic. As a director of a small business based in the south of England, I fall squarely into a category that necessitates me to declare an interest in the subject matter. However, holding such a position also allows me to share some first-hand experience with hon. Members.
Small and medium-sized enterprises hold the key to a successful private sector-led economic recovery in the UK. At a recent UK Trade & Investment maritime sector meeting, I learned that the proportion of UK exports accounted for by SMEs was 5% below the European average. If the UK were simply to raise that level to the average, it would generate a staggering £43.6 billion of additional GDP. That is enough to wipe out the UK’s current account deficit two times over. It is important to keep that in mind when discussing SMEs. These businesses may be small, but they have truly enormous power to drive our economy.
In previous debates in this Chamber, I have highlighted factors that afflict small businesses and limit their growth. In particular, I raised my concerns about the creeping trend of larger businesses putting unfair influence on supply chain companies, such as by extending their payment terms, and the continuing difficulties small businesses face in trying to secure funding from banks. That context is important as we should not view the Government’s role in isolation from all the other factors affecting small businesses.
I strongly believe that the Government “get it” when it comes to SMEs, and they have made it clear that they support their growth and longevity. They continue to put pressure on the big banks to increase their lending to small businesses. They have reinvigorated the enterprise finance guarantee scheme and established a number of new, highly targeted grants. It is clear that the Minister and his Department are working extremely hard to put UK companies on a firm footing.
When the Minister visited my constituency, he will have seen a site called Daedalus, a former naval airbase that now serves as home to a number of small aviation and marine-based businesses. This vast site is being promoted as a potential enterprise zone by the Solent local economic partnership, which will also submit a regional growth fund grant application to support its redevelopment as a hub for business innovation for the entire region. I hope the Minister appreciates the importance of the redevelopment of that site for the future prosperity of the constituency.
It is clear that the Minister also understands the need for the job market to end its over-reliance on the public sector. The need to encourage growth, commerce and manufacturing as part of a private sector-led recovery is at the centre of the Government’s plans, and I commend that approach. After all, it is far more sustainable to grow our way out of a recession than to spend our way out of it. However, the need to rebalance the economy in favour of the private sector applies beyond the boundaries of the north and the midlands. It is a concern to my constituents and many of my colleagues here today that only one project in south-east England succeeded in the first round of regional growth fund applications, as opposed to 14 in the north-east. The Government’s analysis of the first round RGF grants makes for interesting reading. The maps provided on the Department for Business, Innovation and Skills website show a stark contrast between the money diverted north and support for projects in the south.
I represent one of a cluster of constituencies in the Solent area that, together, share all the characteristics of towns and cities in the north of England: public sector dependency, low average wages, low levels of educational attainment and areas of multiple deprivation. On most measurable scales, including unemployment and business growth, Gosport is well behind some of the areas further north that continue to enjoy strong economic support from the Government.
If we were to plonk Gosport in the middle of the north, it would be the second worst performing local authority area in the entire north-east in terms of public sector job dependency. It would also have the third worst ratio of jobs to people in that region, with less than half a job per working adult, whereas the English national average is 0.8% of a job. With its number of active businesses per 10,000 residents being just 25.5, Gosport is the 13th worst performing area in that regard in the entire UK. Almost 35% of working adults in the constituency are employed by the public sector, which is one of the highest such dependency rates in the entire country, and that is before counting the thousands of people who work in the armed forces, especially the Royal Navy, and who call Gosport their home.
Gosport is at least as reliant on public sector jobs as cities further north, yet it appears to have been excluded from wider Government support. Certain Government measures to promote the growth of the private sector have also been denied to the south-east as a whole. I am, of course, speaking of the national insurance contribution exemption for start-up businesses. I cannot help but find that decision a little unfair as research by the Forum of Private Business shows that 51% of businesses in the south-east considered taxation to be the greatest barrier to growth, which is the highest proportion in the UK.
I congratulate my hon. Friend on securing the debate. Although Portsmouth fares slightly better than Gosport, we are still described as a northern town on the south coast. Does my hon. Friend know that we fall far short of the Treasury’s projections and ambitions for the national insurance contribution holiday? Although that might have been the right policy to start with, it is not having the desired effect. Now would be a good time to expand the criteria for qualification to include not just different geographic locations and start-ups, but small businesses that hope to expand substantially over the next few years.
My hon. Friend makes an excellent point. It is worth noting that between 2007 and 2010 the south-east experienced the highest increase in deprivation in the UK. Will the Minister tell us what criteria the Government used in making the decision to exclude the south-east from NI relief? Government responses to that question usually state that the focus is to support areas that have traditionally relied more heavily on public sector employment, and they are usually thought to be the north and the midlands. That same description, however, could also be applied to a number of constituencies in the south, including mine. Furthermore, the exclusion of the south-east has a doubly negative effect on Gosport, as it creates a disincentive to business to choose to locate in the area—which should be a prime area for regeneration according to the Government’s own objectives—over more affluent areas of the north that are indiscriminately provided with Government support that they might neither need nor warrant.
May I declare that I have an interest in the business sector in Northern Ireland? I congratulate the hon. Lady on securing this debate. Earlier in her speech, she mentioned banks and credit to small businesses, and I am sure she will share my concern about some of the findings of recent research papers on banks and the money being loaned to small businesses. The bankers have stated that they never promised to meet the Government targets; they say that they only promised to make the money available. Leading economists say nothing has changed in the manufacturing sector. In fact, over the past 12 months under this new Government, we have not seen any change from the banks, and small businesses, which are the backbone of the UK economy, are suffering greatly.
The hon. Gentleman makes a strong point. Yesterday, I met a small business owner in my constituency who is on the brink of losing his business and his house. Against a property that is worth £500,000, the bank will only lend him £50,000, which goes nowhere near far enough towards supporting him in trying to keep his business and his family together.
Although the Government clearly recognise that there are pockets of need in the south-east, it is thought to be extremely difficult to target national insurance investment at a sub-regional level. That may be the case, but such difficulties are not insurmountable. My constituents should not have to accept not receiving help they badly need purely because it is felt that giving them that help would be too difficult.
That is excellent news, and I know my hon. Friend has done a lot of work on this issue, for which I am very grateful.
I now want to highlight the significant benefits the regional growth fund has brought to certain regions. In the north of England, the RGF has so far created 10,750 jobs directly and 10,916 jobs indirectly, and in the midlands it has so far created 7,923 jobs directly and 37,809 jobs indirectly. By comparison, in the south-east and east of England combined, the RGF has created just 427 jobs directly and 361 jobs indirectly. It is therefore clear that the south gets next to no support from the RGF or enterprise zone designations. Moreover, firms in the south have to pay higher national insurance contributions than firms in other parts of the country. For me and the majority of my constituents—who work in a peninsula where there is, on average, less than half a job per working adult—that is a bitter pill to swallow.
Statistics can also misinform. If anyone looked at the data for private sector jobs created in Gosport, they would be led to believe that we are supporting a growing economy. Unfortunately, that “growth” comes as a direct result of public sector elements of the Ministry of Defence being privatised. For example, Fleetlands, which is the biggest employer in my constituency, has been privatised, becoming Vector Aerospace. That company is now in the private sector, but there are no new jobs. In reality, every year in Gosport more businesses go bust than are created. Officials must look beyond simple numbers and qualifying criteria when making decisions about which areas are in the greatest need of help. The south as a whole has benefited from the creation of large numbers of private sector jobs in the past. It should not be punished for being successful in that regard, and nor should those areas in the south that need help be excluded from Government support solely on the basis of geography.
I understand that the apportioning of Government funding to support business cannot be seen as a local issue. Of course Government funding must focus on achieving wider goals, and must be allowed to maximise the benefit of the schemes it supports for the greatest number of people. I also understand that the RGF and enterprise zone applications are subject to independent scrutiny, which is as it should be. However, I believe that many people have a misconception that the south of England is a universally prosperous region. I hope that I have made it clear that Gosport is certainly not universally prosperous, and I am sure that my colleagues would all be able to provide evidence of areas within their own constituencies that are desperately in need of regeneration.
Despite the difficulties private partnerships in my area face, I have been very impressed by some of their achievements. One such partnership received support from NatWest and Lombard to fund the purchase of a large milling machine worth nearly £500,000 by two Gosport businesses, Marine Concepts Ltd and the Curvature Group. This new joint venture has allowed UK companies to produce components for a wide variety of sectors, including marine, renewable energy, aviation and motor sport. Those sectors had previously required the services of businesses as far afield as Australia in order to meet their requirements. Such investment is creating real jobs as well as preserving the UK’s reputation as a centre for innovative manufacturing. That has been achieved by advanced manufacturing businesses successfully repositioning themselves from serving the Royal Navy to serving private clients across the world.
However, for every such partnership, there is another business struggling with the structural deficit left behind by a radically changed market, which in the case of Gosport has been caused by the contraction of the Royal Navy. Such businesses are willing to adapt, but they are unable to do so without help. For the past 700 years, Gosport—and, in fact, the whole Portsmouth area—has relied on the military to support its entire economy and employment. Much like a mining town or manufacturing centre, the contraction of our armed forces has been intrinsically linked with the falling fortunes of the local economy. However, when the size of the military declines, areas that are dependent on the military are not provided with the same level of Government protection as mining or industrial towns in decline.
Gosport needs to be seen not only as an area with economic problems, but as an area with the potential to reinvigorate itself, given the right encouragement. All the businesses situated on the Daedalus site understand the potential for growth. They are not looking for Government handouts. What they need are a few key measures that can help them create a viable business and the employment that comes with that.
First, they need certainty over the Daedalus site’s future. Historically, the site has been owned by many different Government agencies. There is a runway, yet small aviation businesses have sometimes not been allowed access to the site. Those businesses have not had the incentives to invest, nor the certainty that if they were to invest, they would be allowed to grow and flourish. They also need targeted tax and planning concessions, improved infrastructure and a level playing field; in other words, everything that an enterprise zone would provide.
All the businesses based in or around the Daedalus site are looking to expand, and they are prepared to spend money to do so. I spoke to the owner of one of them yesterday, who said that he was prepared to invest many thousands of pounds to take over a decrepit old building and turn it into a modern, state-of-the-art business premises, yet he had only been able to secure a 10-year lease from the regional development agency. Offering such a short lease is just not good business.
Many of the businesses on the site want to source local people to undertake apprenticeships or engage skilled engineers who are leaving the armed forces. The social benefits to my constituency—where 20% of 16 to 23-year-olds are not in education, employment or training—are clear, and this would help many young people realise their potential.
The lesson is obvious. If businesses feel secure enough to invest and have potential orders waiting in the wings, they will expand. Enterprise zones can create that security, while entrepreneurial business people have never had problems in generating business.
The Daedalus site also lends itself perfectly to the wider qualifying criteria for an enterprise zone. Its green credentials are fulfilled by providing opportunities for local employment, rather than necessitating long commutes by car. That would also have the benefit of relieving the pressure on the infamous A32, the only major road from Gosport that leads into the heart of the peninsula. The pressure placed on a beleaguered transport system burdens my constituents with hours of congestion, particularly during peak periods, as traffic struggles through bottlenecks, and 20,000 people have to out-commute to get to work every day. Gosport is the largest town in the UK without a railway station. Therefore, Gosport not only needs inward investment; it deserves it. That would finally allow the area to realise its full potential, and I am confident that it would also act as a beacon for investment from the private sector.
If I may stray briefly beyond discussion of the south to make a broader national point, I would also welcome clarification from the Minister about how applications for regional growth funding and enterprise zone status are co-ordinated. As he will be aware, the RGF is administered by an independent board under BIS, but the enterprise zone project is administered by the Department for Communities and Local Government. Some people involved in putting forward bids have said they are confused about how applications for both schemes by a single local enterprise partnership will be viewed. I would welcome a reassurance from the Minister that both Departments involved have a clear understanding of how each scheme complements the other, and I ask him to consider providing guidance on how dual applications can be dealt with, and to say whether such an approach would prejudice the likelihood of success. I might add that the application deadlines for both schemes are, after all, on the same day.
Does my hon. Friend agree that it would also be helpful if the Treasury were to allow a relaxation of competitive tendering rules? She identified the regeneration of Portsmouth harbour, which would benefit not only Gosport and Portsmouth, but Fareham and other nearby towns. However, that regeneration can only happen if the Treasury enables those rules to be relaxed. Clarification on that issue would also be helpful.
My hon. Friend makes an excellent point. As she says, many parts of the Portsmouth harbour area would benefit from that type of help.
I believe the case for business improvement measures in my constituency is compelling—indeed, overwhelming —as does the Solent LEP. I am certain that there are colleagues in Westminster Hall today from constituencies across the south of England who feel the same about projects in their own areas. Therefore, I would welcome a reassurance from the Minister that, first, he is aware of our concerns, and, secondly, he will do all he can to support and encourage the growth of small and medium-sized businesses in the south.
I congratulate the hon. Member for Gosport (Caroline Dinenage) on securing this debate, which raises important issues. As she said, they are important because small businesses are vital for jobs, sustainable growth and prosperity, and because it is crucial that our region does not become stereotyped by the Government or others to our disadvantage.
As the hon. Lady demonstrated by citing the statistics about her own constituency, the truth is that there are wide variations in employment, wage rates, small business formation and success within regions as well as between them. The particular needs of our region are not the same everywhere in the region. As well as being supportive of small businesses in general, policy needs to be sensitive to the particular circumstances of each local economy and its small businesses.
Judging by the experience of my constituency and local economy, we could be forgiven for thinking that the Government do not want economic growth in our region at all. Oxford is an incredibly vibrant economy, with lots of small businesses that have spun off from or are servicing our successful universities and hospitals, the Mini plant, and publishing and other high-tech enterprises, but some decisions that the Government have taken are limiting rather than encouraging growth, small business success and job generation.
One of the biggest constraints that we face in Oxford is housing and developable land. I have no doubt that our local economy could achieve much more economic growth if there were more houses for people to live in and more premises for small businesses, but one of the first things that this Government did was to scrap the south-east plan and set their face against any change to the Oxford green belt, thereby blocking both much-needed housing that was already being planned and the Magdalen college science park extension. The tight local authority boundaries that we have in Oxford give the neighbouring local authorities an absolute veto over our expansion, a veto that they do not hesitate to exercise, even on land of very limited ecological or amenity value.
The second hammer blow that I have to refer to is the incredibly ill-judged and damaging measures aimed at cutting the number of people coming from overseas to learn English here. That is a problem not only in Oxford, but in Bournemouth, Brighton and other southern coastal towns, and it will, I fear, inflict incalculable damage on English language courses and schools that have been generating about £1.5 billion for the UK economy, much of it in southern England. That all adds to the bureaucratic minefield for these kinds of educational businesses and colleges, and the Government’s much-vaunted moratorium on red tape clearly does not apply here. Much of the complexity, as English UK has said,
“results from the UK Border Agency trying to legislate in educational matters which are not its proper remit and where it neither has expertise nor has shown any great inclination to listen to those who do.”
As well as the economic and reputational damage that the changes will inflict on the wider international education sector in which the UK has an important strategic competitive advantage, they will hit the micro-businesses of many host families who supplement their income by accommodating overseas language students.
I come to the third hammer blow. The hon. Lady referred to the regionally discriminatory holiday on national insurance contributions for new businesses, and asked about the rationale for that. I have had a look at the Her Majesty’s Revenue and Customs website where there is a question and answer section. It asks:
“Why does the Holiday not apply in London, the South East and the East?”
and the answer given is:
“The scheme is intended to promote the formation of new businesses employing staff in those countries and regions most reliant on public sector employment. The proportion of jobs in the public sector is higher in other countries and regions than it is in the Greater South East (London, the South East and the East).”
Even if we accept the logic of that approach, it is obvious that the regional criterion is unfairly broad-brush because it must mean that new businesses in local economies in other parts of the UK that have low public sector employment will get the help, whereas areas in the south that are very reliant on public sector jobs, such as my own constituency and that of the hon. Lady, will not.
One of the biggest problems facing small businesses is access to credit, and the failure to hit the targets for bank lending to small and medium-sized enterprises under Project Merlin will hold back small business growth at the very time and in the very places where we need it most.
Business rates are another huge problem for small businesses. I acknowledge that the Government have tried to provide some help, but because of the high rental values in many parts of the south, business rates, which are based on them, tend to be higher, and therefore the costs of setting up and operating a small business have a double whammy effect on the cost of premises.
I could say a lot more, but I know that a number of other speakers are keen to get in. I have not yet mentioned the knock-on effect of cutting the teaching grant to universities by 80% and the trebling of fees, the alienation of other small business organisations by the preference given to the British Chambers of Commerce as co-ordinator of the local economic partnerships, the damage of cuts to investment in the transport infrastructure of the south—to which the hon. Lady also referred—and the interesting recent Institute of Directors report, which showed small businesses benefiting less from Government changes to business taxation than larger ones.
Was the right hon. Gentleman hoping to get on to the £500 million investment by BMW in his constituency, and the important help that the company has cited as coming from the Government to enable the investment?
If we are being absolutely honest here there is an important continuity in automotive policy concerning the building blocks of that investment. The hon. Gentleman may seek to make a party political point but I will not. We all have to pull together for the success of the automotive industry, and I am enormously proud of what BMW has achieved with the Mini, and of the strength of the partnership with the work force and the local community, which is making such a success of the initiative. I have already referred to the Mini plant as an important source of business for small enterprises in our area. Those enterprises benefit from the business that BMW generates in the supply chain, and from the spending power of the work force.
I conclude by underlining that it is wrong to see small business support as a zero-sum game between the south and other parts of the UK. The south is an engine of the UK economy, and the wealth that we generate benefits directly and indirectly other parts of the country, just as we will benefit from successful regeneration and from tackling deprivation elsewhere. We need a proper sustainable growth strategy for small businesses in the south, as in other regions, which focuses on improving skills and infrastructure, cutting unnecessary red tape, nurturing enterprise, keeping down taxes and overhead costs, and ensuring that the planning system facilitates rather than strangles sustainable growth and small business formation. By initiating this debate, the hon. Lady has done us a particular service by calling to wider attention the danger that complacent generalisations about the state of the small business economy in the south risk killing the geese that are laying the golden eggs.
Thank you, Mr Streeter. I shall endeavour to be brief. I am here, in large part, to give voice to the south-west, where we have a particular problem with support for small and, I would argue, micro-businesses, which are the lifeblood of our economy.
I should first pay tribute to what the Government have already done to help us. They have reduced corporation tax; we have the national insurance holiday for new businesses, and the extension of the small business rate relief is very much to be welcomed. Given that my cause is very much that of micro-businesses, which make up two thirds of my local economy by number of businesses and 15% financially, I am really pleased about the micro-business exemption from domestic regulation. That is exactly the sort of measure that we should be seeing more of.
Perhaps it is helpful to clarify what I mean by a micro-business. We talk about small and medium enterprises; one passing reference was made to a micro-business. The Minister might be keen to consider defining micro-businesses in legislation so that we can support them. Micro-businesses have been defined in various different countries precisely so that they can be given particular help and support, including tax carve-outs and exemption from regulation. That happens in Australia and in some states in the US. At the moment, we in the UK largely use the EU definition of a micro-business, which is a business with up to 10 employees and a turnover of €2 million. For this country, that is huge. I do not believe that it is an appropriate definition for this economy.
I submit, on the basis of analysis that I have undertaken of Office for National Statistics figures and am happy to share, that a more helpful definition would be an organisation with fewer than five employees and a turnover of less than £250,000. That way, the Government could specifically target help at such businesses, and it would not be quite as expensive as targeting a larger group. That group would include plumbers, electricians and other businesses that are crucial to any rural or deprived urban economy. It would also, inevitably, cover start-ups, which are essential whether they grow to be successful or remain in a steady state. I argue that micro-businesses will create the most jobs, which we badly need. In America, it is claimed that 90% of new jobs after the downturn were created in that sector.
I suggest that we need to reduce the cost and complexity that apply to micro-businesses. Tax is an obvious issue, and the Office of Tax Simplification has done good work, but we should consider more carefully the concept of a flat tax. It would be simple to apply. The suggestion that national insurance and income tax be integrated, even if that is simply a matter of administration, is welcome, but I urge that consideration also be given to VAT. Thresholds are not consistent across Europe, and many small businesses get to a cliff. There is a disincentive to do more than a certain amount of business, because businesses that get to the threshold must spend an awful lot of time earning an awful lot more money before they break even. There must be a way to solve that problem.
I welcome the Treasury’s reduction in the small profit rate. The Institute of Directors tax burden report for 2011 identified it as particularly helpful to micro-businesses, which it defines as businesses having fewer than five employees. However, the Institute of Directors says that it is a one-off win and that micro-businesses will not derive the same benefit as small and medium-sized businesses. It would be good to review what we do with the small profit rate of corporation tax.
The enterprise allowance for jobseekers is an excellent idea—clearly, some new micro-businesses will be started by the unemployed—but limiting it to those receiving jobseeker’s allowance, although a good start, might restrict the benefit brought by the scheme. To illustrate, I bring to the Minister’s attention an initiative at Portsmouth university, which works with graduates to support them, helping them bid to start new businesses and using local business people to mentor them. The university then works with the angel group to see how it can support graduates, but there is no tax incentive. Perhaps one way forward is to look at the enterprise investment scheme and consider whether we can create some form of EIS-lite.
Employment is the biggest barrier for most micro-businesses. I am pleased by the proposal to allow tribunals for unfair dismissal to kick in only after two years. That is welcome. I am also pleased by the suggestion of an employers’ charter. I point out to the Minister that way back in the 1970s, small businesses were given certain carve-outs from employment legislation. There may be lessons to be learned, and the matter might be worth reviewing.
Health and safety is the other big bogey in the room. Lord Young has done a first-class job. The exemptions from risk assessment that he suggests for low-risk businesses are to be welcomed. I strongly urge the Minister to consider negotiating with the Health and Safety Commission. At the moment, businesses with fewer than five employees are exempt from some requirements, but there is a risk that the commission will change its mind. It is important.
Perhaps I have given the Minister food for thought. Many of the initiatives that I have discussed would be welcomed across the whole south, not just the south-west, and micro-businesses would be delighted.
I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing this debate on an issue that is important to the long-term economy of not only the south and south-east but the UK more widely. As a former small business man, I am acutely aware of the stresses and strains involved in running and building companies as an economy emerges from recession. I will not say much, as I do not wish to detain hon. Members for too long, but I would like to make three or four points.
First, at a macro level, we must ensure that business support for new and developing businesses is clear. I am told that there is little support at present and that the private sector has yet to take up the slack. I am interested to know what the Minister has to say about that. Secondly, the interest rates that banks charge businesses, when they do provide working capital, are still an issue. I understand that interest rates of 20% can be charged, although the Bank of England rate is only 0.5%. How are businesses supposed to cope with such rates and still make a profit?
More locally, I am pleased to report that high-speed internet implementation is making its way across my constituency, which will enable a major change in how goods and services are transmitted and provide the infrastructure for new services. Enhancements in speed bring new opportunities for business. I am delighted that BT announced yesterday that its exchange in Brighton, Kemptown will be upgraded to give 34,000 premises access to superfast broadband.
However, one local concern is the tourist tax recently proposed by the new Green administration of Brighton and Hove. Initially, the tax would be charged at £1 per tourist per visit. As hon. Members might imagine, local hoteliers have come out against the idea, as it would essentially be a tax on hotels. I do not want anything to damage Brighton’s competitiveness as a tourist destination. Once taxes are introduced, they inevitably rise and are rarely repealed. The way to attract tourism to Brighton and other destinations is to maintain a framework that enables visitors while allowing tourism services and businesses to survive.
I believe that the Government’s economic strategy will set this country on a sustainable way forward in which debt, growth and employment will come into balance over time. However, what is done at the micro level is just as vital. State direction, bureaucracy and red tape must all be limited to allow the private sector to grow and fill the vacuum when the state is pared back. Government cannot pick winners, but it can create the framework to allow winners to win. That is just as important in the south-east as it is anywhere else.
I, too, congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing this important debate. As we have heard ably from her, and from the right hon. Member for Oxford East (Mr Smith) and my hon. Friend the Member for Brighton, Kemptown (Simon Kirby), prosperity is not uniform in many parts of the south-east, which has its share of deprivation, poor educational attainment, low aspiration and poverty. However, what is striking about my constituency is that it has extremes: areas of wealth and enterprise adjacent to areas of worklessness.
I do not want to paint too gloomy a picture. Romsey and Southampton North remains one of the most wonderful places in the country to live. The local authorities, both individually and collectively through bodies such as PUSH, the Partnership for Urban South Hampshire, and the local enterprise partnership, are working hard to promote regeneration and stimulate enterprise and growth.
Southampton city council in particular has pushed ahead with plans to regenerate the city. It has made some striking differences to the cityscape and to employment opportunities, and has promoted the city relentlessly as a place to do business and to establish companies, ideally located as it is, with a major international port, an airport on the edge of the city and opportunities for excellent university education, not to mention easy access to beautiful countryside, the coastline and superb recreational opportunities. The city has 7,600 companies, with 120,000 people employed, but it does not have the support of enterprise zones, and has no national insurance exemption for start-ups and no structural funding from Europe.
How much more could have been achieved for this regional hub with the same level of support that cities in the north received? Would 32% of the work force still be reliant on the public sector?
I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing this debate on this important issue. Is my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) aware that a recent Federation of Small Businesses survey indicated that, if more than 30% of small and medium-sized enterprises in the south-east had access to the national insurance contribution holiday, they would take on new people? That would be good for the country and for our region.
My hon. Friend makes an excellent point and is absolutely right—those companies would be willing to take on more people and create more employment in the private sector. As I was about to say before he intervened, in these straitened economic times, there will inevitably be a correction in the number of people employed by the public sector, and we need that slack to be taken up by members of the FSB and other small business organisations.
Landmark sites on the edge of Southampton that are earmarked for major corporate headquarters remain only partly used. One must therefore ask whether those sorts of sites would have been snapped up by now if there had been more support and more enterprise zones in the south-east.
If Southampton was lifted up—this is true of other cites in the south; my hon. Friend the Member for Portsmouth North (Penny Mordaunt) has left the Chamber, but there are close and obvious parallels and comparisons between Portsmouth and Southampton—and placed anywhere in the north, one would notice striking similarities between it and cities in that region.
On the 2010 recognised indices of multiple deprivation, Southampton is ranked as the 81st most deprived local authority area in the country, which is 10 places worse than in 2007. Therefore, in spite of being perceived as an economic powerhouse, there are places in the south-east where deprivation is getting worse, unemployment is going up, and we could benefit greatly from some support to the SMEs that will play a critical role in economic recovery. As we know, 60% of all new jobs are created by entrepreneurs and high-growth small businesses, and in a part of the country where, as we have heard, it is very expensive to do business and there are high rents and high rates, those small businesses need every bit of support. We neglect the south-east at our peril. The country needs this region to be accelerating growth, and if it is to do that, the full range of funding options must be available to entrepreneurs.
I hope that colleagues will forgive me if I comment briefly on some of the good things that are happening in Southampton. At Solent university, a culture of entrepreneurship is being fostered amongst the students—we have heard that something similar is happening in Portsmouth—and it applies to not just the alumni, but undergraduates and those who are about to graduate. They are all being encouraged to consider their own start-ups and given tools and practical support to do that.
The city council has worked hard to stimulate investment, much of which has come from the retail sector and hospitality, with hundreds of new jobs created with Costco, Sainsbury’s and Morrisons. There have also been manufacturing successes, with up to 700 new jobs in marine manufacturing in Woolston. The city is managing to buck the trend for job creation, but we should remember that that must still be held against the 32% dependency on the public sector.
Another thing that we have seen in the private sector—I am prepared to concede that this is not an SME—is the dramatic expansion of Southampton as a cruise terminal. Much credit must go to Associated British Ports, which has invested private money in the port to a massive extent and boosted the city’s economy, without subsidy from Government or Europe, unlike some of its competitor cities. What ABP wants from the Government is a level playing field, so that businesses are not disadvantaged in an unfair way and confidence is not undermined in a way that chokes off essential private sector investment. It is successful, but it has achieved that on its own and feels aggrieved to see other ports being given a leg up.
There is much to be proud of in the city, but there is still too much deprivation. There could be more stimulus if companies benefited from the same tax breaks available further north. How many more new graduates would find the impetus to start up their own business if they, too, could have that national insurance exemption?
This is an important debate on an important issue, and I urge the Minister to consider carefully what Members are saying about the south-east. The region is desperately needed to drive the economic engine of the country, to accelerate growth and to provide private sector jobs.
Thank you, Mr Streeter, for the opportunity to speak in this debate. I join others in welcoming the ability of my hon. Friend the Member for Gosport (Caroline Dinenage) to secure it, and congratulate her on her excellent speech.
I welcome the various different fronts on which the Government have tried to lever up some economic recovery, through securing and retaining market confidence, which has brought us back from the cusp of default, and through some of the fiscal measures on corporation tax and the regulatory measures to which other Members have referred. None the less, it is worth pointing out some of the findings in the Institute of Directors policy paper that came out this week. It pointed out that the overall tax burden on small and medium-sized enterprises
“is a lot higher than the corporation tax rates of 20 and 26 per cent”—
it is closer to 32% and 43%—and that a business
“can expect to have to pay four or five months’ worth of profits to the state each year.”
That is worrying and, like the IOD, I would love to see the public finances permit a move towards the consolidation of national insurance, a reduction of the overall level of national insurance for employers and businesses, and further cuts in corporation tax.
That analytical view is bolstered by the feedback that I get regularly from local businesses in Elmbridge. They raise three major things with me. The first is credit—there is still not enough credit going to viable SMEs. The second is red tape. Like others, I would welcome it and congratulate the Government if they tackled some of the health and safety and employment law regulations. Thirdly, it is still too difficult to hire and fire in this country, and that is a major obstacle to growth. I would be grateful if the Minister could give an assessment of the one-in, one-out rule for the financial year 2010-11. How many regulations have come in and how many have been scaled back? It would be useful to know what practical progress has been made.
Like others, I welcome the cuts to both the main rate and the small business rate of corporation tax, but national insurance, as others have said, remains onerous. One aspect that is raised constantly with me as an MP for a constituency in the south-east is business rates and a feeling that our businesses are taxed more and more but get back less and less. Can the Minister give an indication of what progress has been made towards ensuring that local communities see a greater share of the revenue of the tax raised from businesses locally so that we can take some positive steps towards incentivising local business growth?
Much has been said already about the one-year national insurance holiday for start-up companies, but I understand that it is still not applicable in the south-east. Many Members present will recognise that we need to do far more to promote investment and infrastructure in other parts of the country that are not as well developed. Other measures of a more socio-economic nature, such as the pupil premium, encourage greater social mobility and economic development.
I have listened to every contribution. Does the hon. Gentleman agree that what we need to do in the whole of the United Kingdom is create the confidence that the business sector once had? Small businesses are fighting a rearguard action against the banks, the markets are not what they were, and small hauliers face opposition from and have to compete against hauliers coming in from Europe filled with cheaper fuel. We need to create the confidence whereby businesses of all sizes are prepared to take a risk again.
I thank the hon. Gentleman for that contribution and I agree entirely with its sentiment and spirit. One of the concerns is that we will not get that business confidence back unless we do a bit more to bring down the regulatory and tax burden. On the national insurance holiday, I am concerned about the precedent of moving towards increasing regional tax subsidisation, which is, effectively, what we are talking about. Over the years, a wealth of research has shown that cutting business taxes may well increase revenue as a result of business growth. Is the Minister aware of whether any assessment was done of the fiscal impact of extending the national insurance holiday to all parts of the country, specifically in terms of what revenue would be gained back? Is that measure revenue neutral or even revenue positive? Such an approach would certainly be welcomed by businesses across my constituency.
In Elmbridge, I see a huge niche comparative advantage in high-tech start-ups—for example: Chelsea Technology, which pioneered the sensors that were used to clean up the oil slick in the gulf of Mexico; T R Control Solutions, which is a relatively small business that has pioneered the software being used in Whitehall to cut CO2 emissions; Air Products, and Saville Consulting. There are many others. We are not going to rebuild the old manufacturing industries of the past, and there is no point harking back to the industrial revolution with doe-eyed nostalgia. What we can do, and what I hope we will do, is build and innovate in the areas of comparative advantage. The high-tech manufacturing industry is of particular comparative advantage in my constituency, in the south and for the country as a whole.
I am conscious of the time, so I will conclude my remarks. Again, I thank you, Mr Streeter, for giving me the opportunity to speak and I congratulate my hon. Friend the Member for Gosport on securing the debate. I hope that the Minister will address some of the specific points made when he replies.
It is a pleasure to contribute to this timely and important debate, which I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing. It is also a pleasure to serve under your chairmanship, Mr Streeter.
Like other hon. Members, I confess that I have a business background. It is perhaps slightly ironic that in 2005, the year of the 400th anniversary of Guy Fawkes, I was the first firework manufacturer to be elected to this place. Even now, when I wander into Parliament on 5 November, the temptation to blow the place up is still there! So far, I have managed to resist it.
We have had a tour of the south of England this morning—from southerly constituencies, to Milton Keynes North, which is the most northerly seat in the south-east region. Small business is big business in my constituency. On average, five businesses move into or expand in Milton Keynes each month. Some 72% of our companies began in the city. Milton Keynes is the city of start-ups and, in 2010, the Centre for Cities outlook report said that it had the third highest number of business births in the country. We may also be considered the headquarters of headquarters. We are home to the national bases of Volkswagen, Argos, Marshall Amplification, Mercedes-Benz and, imminently, Network Rail.
However, many of the 10,000 businesses in the new city are small and medium-sized enterprises. Many of the business men and women I have met welcomed the excellent measures introduced over the past year by the coalition Government—for example, small business rate relief, which other hon. Members have mentioned. Although I certainly support the national insurance holiday, it seems slightly arbitrary that, as we have heard this morning, it is too often decided on a regional basis. There are centres of deprivation across the south, and Milton Keynes is no different. Some of my wards are the most deprived areas in south-east England.
My hon. Friend the Member for Esher and Walton (Mr Raab) made a point about being able to secure credit as a small business. That remains a major problem. Although I know that the Government are keen to act in that area, we simply must do more because, unless small businesses can secure credit, I fear that their future is bleak.
Business owners are particularly keen on the introduction of local enterprise partnerships. Milton Keynes is part of the South East Midlands LEP. Geographically, that stretches from Luton to Corby, with Milton Keynes being the centre of gravity. It has been very much welcomed that the wealth creators and the innovators will determine the direction of our regions rather than having publicly funded, faceless bureaucrats driving regional funding.
However, some people have found it strange that the funds for starting up the LEPs have been solely allocated to the chambers of commerce. Concerns were raised in a letter to The Daily Telegraph about the decision of the Secretary of State for Communities and Local Government to allocate the £300,000 grant to that national network alone. Although the chambers of commerce are excellent—in my constituency, the chamber of commerce is a lynchpin of business activity—they are not the only bodies representing business. There is also the Institute of Directors, the Federation of Small Businesses and the Forum of Private Businesses, national wings of which wrote the letter to The Daily Telegraph back in April. In particular, our local Federation of Small Businesses is a strong voice. I pay tribute to my predecessor, Brian White, who leads that federation in Milton Keynes.
Collectively, small businesses in my constituency are big business, and they deserve a big voice in these matters. I would hate to think that, in coming up with such an excellent initiative, we are alienating anyone. Will the Minister look again at how we fund LEPs? It is important that we ensure that voices from the whole business community are heard and that we do not solely rely on a single channel when it comes to starting these very important partnerships.
I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing the debate. We all know that small and medium-sized businesses are absolutely vital to the recovery of the British economy. They create wealth in a community and provide local jobs. Micro-businesses are incredibly important to our local economy on the Isle of Wight. The majority of businesses on the island have only one or two employees, and many have none. There are 6,000 businesses in total on the island, 87% of which have fewer than 10 employees. That is a figure of 5,220. I will come back to those points in a moment.
Potential investors and business owners need to understand that living and working on the island is fundamentally different from the mainland. There are a few drawbacks, but there are many more positive aspects. We have a more relaxed pace of life and a better quality of life. We can use that to attract business people who want a good work-life balance. We also have a rather captive audience because the cost of leaving the island can be extraordinarily high. People tend to buy their food and many of their other goods and services on the island, and they bank on the island. Islanders are more community focused than people in many other parts of the country. That is probably because so many people are born on the island, educated on the island, work on the island, have families on the island, and grow old on the island, so even more than in some other areas, it is in the interests of islanders and their families to build a strong local economy.
I am also interested in the move towards more economic development through the focus of local enterprise partnerships on stimulating regional growth. Unfortunately, I understand that the Solent area LEP, which covers the Isle of Wight, has excluded representation on its board from small businesses, including the Federation of Small Businesses. That seems rather short-sighted. I am worried that the voices of small and micro-businesses will not be heard. I hope that the Solent area LEP will find a remedy for that omission soon.
More can be done to support micro-businesses. Many local businesses have disappeared into franchises controlled and dictated to by large brewers. Small butchers and greengrocers have to compete with supermarkets that have free parking and mass buying power. Even though many small food shops on the island are better value for money than the larger supermarkets and offer a better quality of food and produce, they suffer losing shoppers to loss-leading offers and discounted petrol schemes. Perhaps the Government’s commitment to support local communities means that something more can be done to encourage shoppers to use local shops that sell local products.
As I said earlier, most businesses on the island have one or two employees and many have none. Only 13% of businesses on the island have more than 10 employees. Small and micro-businesses are vital to the island’s economy and they have enough on their plate trying to run a successful business, without having to devote hours and hours to trying to ensure that they comply with unnecessary red tape. The Government’s decision to exempt new start-ups from all new domestic legislation for three years is welcome; it is a good start. That, coupled with a review of the 22,000 regulations currently on the statute book, will reduce the bureaucratic burden that so often puts off good small business owners. However, I regret that the island was not included in the decision to give a national insurance holiday to small, start-up businesses. Just because the previous Government put the island in the south-east region does not mean that it shares the affluence of some of our mainland neighbours. I hope that the Chancellor will look closely at differences within regions—I recognise that that point has been made—when announcing such policies in the future.
I recently met with Neil Whitmarsh, the senior business manager of Lloyds bank on the island. He told me that business lending on the island is well ahead of target, and I welcome that news. Island businesses will also benefit from the improved access to finance promised by the Government. I welcome the announcement from the major banks that they will make £76 billion available in new lending for small businesses across the country in 2011. All in all, I think that the Government understand and appreciate the massive contribution that small businesses and micro-businesses make to our national and local economies. The work that has been done is an excellent start, but we need to keep micro-businesses afloat, otherwise our economy will once more suffer.
I add my congratulations to my hon. Friend the Member for Gosport (Caroline Dinenage). The debate gives me an opportunity to explain something of what we are doing in my constituency. We have set up the Sittingbourne and Sheppey Link 2 Business, which has its own website that offers local businesses direct access to my office and a range of other services. We set that up because, during my term as MP, one of my top priorities is to help local companies get through the tough economic challenge that our country faces.
As and when the economy improves, I want those businesses to be better placed to expand and provide the extra jobs that my constituents need. At 8.7%, my constituency has one of the highest unemployment rates in Kent. I am determined to do everything I can to help bring that figure down. I am lucky that Swale borough council and Kent county council are two local authorities that recognise the importance of private enterprise to wealth creation. They are both doing all they can to attract more investment into our area. Of course, much of the future prosperity in my constituency is dependent on those companies that already do business in the area, which is why helping them is so high on my priority list.
One way in which I can achieve my goal is to ensure that local business men and women have easy access to advice and are able to get quick answers to any questions they might have about Government policy. The Sittingbourne and Sheppey Link 2 Business provides that service. We hold monthly business breakfasts at which local business people can share with me their concerns and problems. I have been running those breakfasts for a year and the three gripes that are continually raised are the burden of red tape, the lack of a skilled work force locally and the difficulty of accessing Government grants because we happen to be in the south-east of England. As a number of hon. Members have pointed out, we actually have areas of deep deprivation in the south-east. In my constituency, two of my council wards are in the top 10 most deprived nationally.
It is for the people living in those areas that I would like to issue my plea to the Government for help. Swale borough council, Kent county council and I are working together to do all we can to encourage investment into our area. As the Minister will know, Kent took a hard hit recently when Pfizer decided to pull out of Sandwich, with the loss of 2,500 jobs. On the plus side, Vestas is seriously considering setting up a wind turbine factory in Sheerness to create another 2,000 jobs. I am sure that we could seal that deal if there was some access to Government aid. Bringing in such investment would give a huge boost to small and medium-sized businesses in my constituency. Losing that investment would be a tragedy.
I know that the Government’s aid policy is pitched towards regions where there is a need to rebalance economies that have become over-reliant on the public sector. As a business man, however, I know that when times are tough the way to create growth is to invest in those areas of the business that have a proven record of success, rather than those that have been a drain on company profits. The same should apply to Government investment, and I urge Ministers to rethink regional aid policy. The country needs more private sector jobs. In Kent, we are doing all we can to help our local businesses create those jobs, and I am sure the same goes for other southern counties. We need Government help, however. We need financial help. Give us that help and we, in the south and south-east, will help kick-start Britain’s economic recovery.
Thank you, Mr Streeter. It is actually Chuka Umunna. My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) is another member of the shadow business team, and she is a she as well.
Let me start by congratulating the hon. Member for Gosport (Caroline Dinenage) on bringing this important issue to the Chamber. I say that not only out of custom, but because we are looking to small and medium-sized businesses to create the jobs and growth that will enable us to reduce the deficit and return the country to prosperity after the global financial crisis and the recession. In the south, SMEs make up 99.4% of enterprises. They deliver 52.6% of the jobs in the private sector and 40.9% of private sector turnover. In the three regions that I commonly think of when I think of the south—the south-west, the south-east and the eastern regions outside London—there are 420,000 SMEs employing 3.26 million people, from sole trader outfits to those employing 100 or more. It is an absolute prerequisite for the full recovery that we all want to see that they grow and flourish.
To see SMEs bloom, we need to foster and promote an enterprise culture in which people can make an informed choice about setting up their own enterprise and business, as opposed to going to down the employment route with another outfit. We need to create a dynamic start-up market by strengthening the support that we provide to people in terms of giving them the networks and access to information that would encourage them to start up a new business. We need to build the capacity of our existing SMEs to grow by promoting the adoption of shared learning, good practice and maximising the skills of business. We need to encourage SME activity in disadvantaged and deprived communities, many of which have already been mentioned.
I know that many MPs in the House, including those who have contributed to the debate, have direct experience of business. The hon. Member for Gosport runs a small manufacturing outfit and has a lot of knowledge in this area. The hon. Member for Brighton, Kemptown (Simon Kirby) mentioned that he is a former business man, and of course the hon. Member for Milton Keynes North (Mark Lancaster) is the first fireworks manufacturer to sit in this House—something that I did not know. I practised as a solicitor for the best part of a decade before entering the House. Throughout my time as a solicitor, I advised SMEs. I think that the Minister worked in business for a good decade before he came into the House, too. Everybody who has contributed does so from practical experience, which is a good thing for us here in Parliament.
As a result, we are familiar with the obstacles that SMEs face. Chief among them is access to finance. The Government’s regional growth fund has been mentioned. The previous Government had a regional growth budget of £1.4 billion, which was delivered through the regional development agencies. This Government are investing the same sum, but over three years—a two-thirds cut in investment. The first round of bids has caused some angst and was very over-subscribed. The applications were restricted to those with bid values of more than £1 million, which denied many SMEs access to the funding. The hon. Member for Isle of Wight (Mr Turner) said, for example, that 87% of the businesses in his area are micro-businesses, and such businesses are probably not in a position to make bids of that size. Will the Government consider revising the criteria to permit bids of a smaller value so that more SMEs can benefit? The Opposition have also suggested reimposing the bank bonus tax and adding £200 million from that to the £450 million already announced for the regional growth fund.
New local enterprise zones were mentioned—the hon. Member for Gosport highlighted that none is scheduled to appear in the south. Notwithstanding whether we proceed with the zones or where they are located, why does the Minister feel that they would work and be successful? When I sat on the Treasury Committee, the chief economist of the Cabinet Office, Jonathan Portes, who left his position in February, said that his understanding was that, instead of creating new economic activity, enterprise zones simply shifted it around the country.
Above all, SMEs look to the banks for access to capital and finance, which they cannot access on the capital markets, unlike larger companies. The hon. Member for Isle of Wight, as well as the hon. Member for Upper Bann (David Simpson) who is no longer in his place, referred to the Project Merlin agreement, which was announced in February. Under it, the Chancellor told us that the banks had agreed £76 billion of gross new lending to SMEs, giving a quarterly target of £19 billion, which we learnt recently that the banks had missed by £2.2 billion. I have some questions for the Minister, given information that has come to light over the past few days since we had Business, Innovation and Skills questions on the Floor of the House last week. In particular, the Minister said in a written answer to my hon. Friend the Member for Barnsley Central (Dan Jarvis), on 8 June:
“The Merlin Agreement was about setting stretching lending targets to the banks to make sure that they make available the credit that businesses need to grow...Lending to SMEs in the first quarter was £16.8 billion against a quarterly ‘stretch’ target of £17.2 billion (the ‘capacity’ target would imply a figure of £19 billion).”—[Official Report, 8 June 2011; Vol. 529, c. 391W.]
That was the first mention of a stretch target, which appears to let the banks off the hook on SME lending, because the stretch target is 10% lower than the original target announced by the Chancellor in February.
Why did the Chancellor not cite the stretch target referred to by the Minister in the written answer last week? Surely Parliament should have been told about such targets at the outset. Secondly, why are those stretch targets and the details about them not published quarterly on the Bank of England website with the capacity targets we were originally told about? On the Project Merlin provisions to do with chief executive officer remuneration, will the pay link reflect whether the banks have also met stretch targets, or will the link be with capacity targets? Lastly, Treasury officials were quoted in the media yesterday as saying that the Minister’s stretch targets do not officially exist, yet clearly they do, because we cannot get more official than a ministerial written answer informing us of the existence of such a target. Why is the Minister saying one thing, when the Treasury appears to be saying another? Perhaps the Minister can provide clarification. We need the banks to lend to SMEs in the south and beyond if we are to see growth return.
Other issues raised in the debate include the national insurance holiday, which the hon. Member for Gosport thought was unfair in not applying in the south-east, while my right hon. Friend the Member for Oxford East (Mr Smith) thought that the application of the criteria determining where the holiday would apply was rather broad brush. The hon. Member for Portsmouth North (Penny Mordaunt), who is no longer in her place, mentioned the low take-up of the benefit: we were told that 400,000 businesses would benefit but it appears to be far fewer. Can the Minister tell us where we are with that?
The cost and complexity of regulation were mentioned by the hon. Member for Newton Abbot (Anne Marie Morris). She would probably agree if I took it from her comments that the issue is one not only of cutting the red tape but of ensuring that the regulation we have is applied in a smarter fashion, and easier for businesses to understand. I think she also mentioned the employment tribunal regulations, as did the hon. Member for Esher and Walton (Mr Raab). The previous Government did away with the statutory dispute resolution procedures—in practice, they were difficult for employers to grapple with—and that was a good thing, but I add a note of caution, because watering down employee rights is not necessarily a substitute for a proper and comprehensive growth strategy to help the businesses we are discussing.
The hon. Member for Romsey and Southampton North (Caroline Nokes) talked about the high rents and rates from which businesses in her area are suffering. I am receiving exactly the same comments from my constituents in Streatham. What does the Minister think we can do centrally about the problem? The lower tax burden and the Institute of Directors report were mentioned by the hon. Member for Esher and Walton. In reality, the tax burden for SMEs is, typically, between 32% and 43%. We need to look at that. The hon. Member for Isle of Wight mentioned the big issue, which the Government need to look at, of SME representation on the LEP boards. The preponderance of SMEs feel excluded from the boards of the LEPs, and that claim is popping up all over the country. Would it be a good idea to give the LEPs responsibility for the billions of pounds of regional development agency assets, so that they can have real local influence in their operating areas? The hon. Member for Sittingbourne and Sheppey (Gordon Henderson), who has been involved in business as well, talked about the challenge of local skill shortages which I, too, recognise.
The hon. Member for Gosport started by mentioning the notion that the south is being pigeonholed as an affluent area without the same challenges as the north and, perhaps, is not being afforded the benefits received in the north. I am not suggesting that that is what she said, but SMEs are the lifeblood of our economy and we need them to thrive everywhere, in deprived communities all over the country, be they north or south. The Government strategy for growth is predicated on a boom in exports and in business investment. We need to see that happen all over if growth is to return.
I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) not only on securing the debate but on her excellent contribution. How refreshing, in this Parliament, in a debate on small businesses, to see a significant number of hon. Members such as myself with a business background. I know it is meant to be a dangerous thing for a Minister to have some knowledge of his subject, but it is actually immensely helpful. Many of the representations, on whether we can do a little more of this or extend a particular scheme, are in many senses a process of singing to the choir. I am sympathetic, but we have inherited a tight financial situation and, without wanting to get partisan, we have therefore been restricted in some areas in which we would like to do more. Hon. Members of all parties appreciate that.
As was pointed out by all hon. and indeed right hon. Members, small businesses are vital. We heard from the Opposition spokesman, the hon. Member for Streatham (Mr Umunna), and I welcome him to his position; this is the first opportunity we have had to debate in Westminster Hall. He is right to talk about how small businesses represent a significant proportion both of businesses as a whole—99% in the south-east—and of the jobs created, accounting for just over half of private sector jobs. In my book, small businesses are the drivers of growth and the leaders of innovation, and as we try to move away from the recession, we want to improve on that.
Let me say at the start that this Government are absolutely committed to enabling more people to start businesses, and then to grow them. Many of the initiatives that make a real difference to people’s bottom line in running a business, whether micro, small or medium, are policies that affect every business throughout the country—national policies. I shall come to some of the specific aspects, and the spatial and regional dimension. The Government have started by trying to ensure that people who want to begin the journey of starting a business can do so.
The new national enterprise allowance, which is available throughout the south-east and the country as a whole, will be rolled out over the next year, and will help thousands of unemployed people, whether in Gosport or elsewhere, to take that first step on the crucial journey from being unemployed to being self-employed. That is why we are overhauling the whole bureaucratic process of, for example, registering a company. It has been ridiculously complex in the past, and when I started my business at the bottom of the last recession, it was immensely slow and expensive. We are putting the process online, and making it quick and cheap so that people can get going and get under way.
That is why the Government, during our first 12 months, sought to stop the planned increase in national insurance, which would affect every small business and could have cost, according to the Federation of Small Businesses, some 47,000 jobs. We stopped that, and that helped businesses up and down the land. It is why we are reforming the tax system, to which several hon. Members referred, and cutting the rate back to 20p instead of increasing it, as had been planned. It is also why we are ensuring that the system is simpler. In the past, too much time has been lost in trying to comply with bureaucracy, reliefs, allowances and the ever-changing two-Budgets-a-year process. Simplification and greater predictability are crucial when trying to run an SME.
On regulation, I totally understand that there will be natural caution about how this Government, more than any other, are making progress. My hon. Friend the Member for Esher and Walton (Mr Raab) referred to one in, one out. During the first six months, when we invited representations on various regulations, we received 157 on different regulations. We have cut those by 70% down to 46 and only 11 will cost businesses anything. That is a start, as hon. Members have said, and they are right. This is the beginning of a process, and there is a lot more to do. I am working with my colleagues throughout the Government to consider the next half-year—July to December—so that that 70% reduction in the number of regulations can be matched and improved on. However, we can do more, which is why have introduced the new moratorium for new regulations on SMEs to ensure that micro, small and medium businesses can get on with their business without worrying too much about complying with Government bureaucracy.
That is also why we have taken the bold step of ending gold-plating of EU regulations in this country. We have had a habit of being the first to implement them, and in a way that is far more complicated for our businesses than for our European competitors. We are changing that, which is why we will not implement EU regulations a day earlier than we legally must, and why we will ensure that we do not add to directives and make life more complicated when our businesses are competing with their European partners. Those are crucial steps that will make a difference to the bottom line.
I turn to the specific issues raised by various hon. Members. My hon. Friend the Member for Gosport rightly pointed out the crucial role of exports in our growth overall, and in helping SMEs improve their productivity and innovation. The evidence is there. That is why UK Trade and Investment is changing its strategy to make it far more entrepreneurial. It also has a new “passport to export” service deliberately aimed at SMEs. We have worked with the Export Credits Guarantee Department to loosen up some of the regulatory processes, and to introduce a series of new schemes to help businesses in the credit area with a simpler credit insurance product, a new bond scheme to make things easier, and a new foreign exchange credit scheme. If my hon. Friend would like further details, I am sure that my officials will be happy to supply them.
I shall deal with an issue that is specific to Gosport, and then speak about generic matters. As my hon. Friend knows, I visited her constituency yesterday, and met other people in Portsmouth and elsewhere in the area. One initiative that we are driving forward is recognition of the tremendous value of the marine engineering industry. It is crucial for many hon. Members who have spoken today, but has been neglected. We have all recognised the importance of automotive engineering, and we have all pushed the case for aerospace, but the country has tremendous expertise in marine engineering. I am co-chairing the Marine Industry Leadership Council, and leading the strategy with the industry. It sets out the key issues involving technological change and the ability to take on new opportunities so that that industry is prosperous. That is crucial for areas such as Gosport. National political leadership can make a real difference to a local area.
My hon. Friend mentioned the national insurance holiday. A little perspective is important, but I understand people’s concern. The change will help new businesses. No existing business in any constituency will be treated differently, whether they are in the north or the south. That is important. Although the Chancellor is clearly under financial pressure, he wanted to make a difference, and to help business formation in areas where it is at a lower level, so we chose to help businesses outside the wider south-east. I note the representations, and I totally understand the point. I will come to the broader point about specific pockets of deprivation in apparently more affluent areas, but the policy has tremendous merit. These are early days but, like all tax policies, the Chancellor will keep a close eye on it. He has noted, as have I, hon. Members’ representations.
On finance, the Opposition spokesman, the hon. Member for Streatham, mentioned a couple of issues, as did another hon. Member who is no longer in his place, about access to finance. This is crucial in terms of ensuring that we hold the banks to their targets—I will come to that—and how we deal with equity finance and risk capital. That is why we ensured the continuance of Capital for Enterprise with a £200 million fund. It is also why we have pushed the banks to provide us with a business growth fund, aimed at the mid-caps, which will help unlock around £2.5 billion. The hon. Gentleman also referred to targets. It is the capacity targets to which we will hold the banks. Clearly, in any negotiations there will be other ways in which we wish to stretch the banks and challenge them, but we are monitoring the capacity targets.
On regional growth funds, I am well aware that if people have not won funding they will want to know why, and I understand that. The first round was very popular, and heavily over-subscribed. The second round is now in hand, and its capacity has doubled. It is worth pointing out that it is focused on areas with heavy reliance on the public sector, but the scheme is based on merit, and there is no attempt to place a limit on businesses applying in different parts of the country. That is important, and leads on to the wider issue.
As I discussed yesterday when I visited Gosport, such places have pockets of deprivation, as does my constituency in Hertfordshire, and in a strange way they are more isolated than if they were in an area that is generally recognised in the statistics as bring deprived. That is why the old regional debate about north-south is too crude. It is why I talked to the Solent LEP, as I have to others, about looking at the nomenclature of units for territorial statistics—the NUT statistics, which relate to the size rather than the sanity of the preparation—to ensure that we drill down and better understand the real problems. It is one reason why we are replacing regional development agencies with local enterprise partnerships. That will allow us and, more importantly, local business and civic communities, directly to address some of the problems and local issues that might be masked by more general affluence, which tends to colour the way in which Government policies work. That is why enterprise zones will be open for all enterprise partnerships to apply for.
I had the opportunity of seeing the former HMS Daedalus, which is a fascinating sight. We are in the bidding period, so I must be careful, but I am sure that my hon. Friend the Member for Gosport and her supporters and constituents will make a powerful representation.
Finally, issues were raised about the new generation of entrepreneurs, whom I totally support. Several hon. Members mentioned that, including my hon. Friends the Members for Romsey and Southampton North (Caroline Nokes) and for Newton Abbot (Anne Marie Morris). Yesterday, I was at my alma mater, Reading university, to open its new enterprise centre. We must do what is done in silicon valley, and bring investors—
Unauthorised Encampments (Brighton)
I am grateful to have secured this Adjournment debate. In recent weeks, my constituents have become increasingly concerned about the influx of Travellers into Brighton, the creation of unauthorised encampments, and the attitude taken by the city council’s new Green administration to that important issue. Furthermore, a “tent city” protest against Spanish-style austerity has recently been organised by the so-called Real Democracy Now campaign on the historic Old Steine in Brighton. That protest was not moved on by the police, and it was welcomed by the Green party as the kind of peaceful protest it wants to see.
A number of houses in the Ovingdean and Roedean areas of my constituency have been used as so-called “party houses”, and former homes in residential streets have been turned into the equivalent of nightclubs for 24-hour partying over the weekends. As you will imagine, Mr Streeter, none of that sits well with the majority of law-abiding citizens and constituents, who pay their taxes and obey the rules.
Brighton has been a magnet for Travellers for many years. Previous councils created a site for Travellers at Horsdean in Brighton, which was refurbished by the recently departed Conservative administration. That site is located in the constituency of the hon. Member for Brighton, Pavilion (Caroline Lucas).
The hon. Gentleman mentions the fact that the previous administration set up a transit camp. Does he also acknowledge that it did not succeed in finding any kind of permanent site? The lack of such permanent sites is one of the main causes of the problems he describes.
I am afraid that I do not agree with the hon. Lady. The problems we see today—which will get worse if something is not done—are caused by the Green administration and the lack of desire to move people on. We have a perfectly adequate transit camp that is largely unoccupied. Yet over the past few weeks in Brighton and Hove we have seen Travellers at the Victoria recreation ground, at Benfield Valley park, at Withdean park, on farmland adjacent to 39 Acres off Ditchling road, on the Ladies Mile open space, at Happy valley, at Wild park and in east Brighton. The camp at Horsdean remains, at a cost to the taxpayer, and it has empty pitches.
As I have said, Brighton has been a magnet for Travellers for many years, and the good intentions of previous administrations do not seem to have stemmed the flow of Travellers to the area. When Travellers arrive, groups set up unauthorised encampments wherever the mood takes them. That could be on publicly owned land, which is often owned by the city council, or on privately owned land such as the Portslade cricket club in the constituency of my hon. Friend the Member for Hove (Mike Weatherley). Understandably, residents get annoyed and phone the police or the council. The council and the police are supposed to work together, but there is often a delay while legally mandated welfare checks are carried out, and consideration is given to seeking an order that would instruct the Travellers to move under section 61 of the Criminal Justice and Public Order Act 1994.
This problem is not uncommon. Yesterday I visited a newly-established illegal Travellers site in Layhams lane, Coney Hall, in my constituency. I told the Travellers to move on and they told me that they would not unless compelled to do so by the police. In the meantime—as they have done before—they make a hugely expensive mess for the local council. In this specific case, some people have uncontrolled dogs that bit one of the teachers in the local school. Anything we can do to increase the speed with which police and enforcers can act would be a great help for decent people who have to put up with the mess.
My hon. Friend makes a valid point and I agree with him. Only recently we saw similar antisocial activity in the Happy Valley area of Woodingdean in my constituency. Allegations of damage, fouling and abusive behaviour were made to the police and council.
I congratulate my hon. Friend on securing this important debate. As he may remember, a few months ago I raised this issue during Prime Minister’s questions and asked what could be done. I asked whether intentional trespass could be made a criminal offence, so that if people move on to other people’s land without permission they can be removed without the need for a court order. The Prime Minister said that he was encouraged by the proposal and that he will look at the issue. Does my hon. Friend agree with such a measure, and will the Minister tell us what point the Government have reached in looking at that proposal?
Does my hon. Friend agree that the foolish decision by the council makes it harder for the travelling community to live in harmony and be accepted in the way we would wish it to be? Settling in orderly sites is the right way to proceed. In my constituency, we have discovered that the only way to deal with the problem is to be absolutely consistent. If we are consistent and the law is properly enforced, Travellers and the local community find that they can live in greater harmony.
We are talking about the legality of moving Travellers on. In the Severn Beach and Pilning areas of my constituency there is a new school, and we have had a spate of problems with unauthorised Traveller sites. I asked the Under-Secretary of State for Justice, my hon. Friend the Member for Reigate (Mr Blunt), about making exclusion and eviction orders site-specific rather than individually based. At the moment, if a group of Travellers is asked to move on, other people can quickly reoccupy the site. If the eviction or exclusion order is made specific to a particular site, the problem will be solved once and for all.
We have danced around this issue for so long. Many hon. Members present are from the new intake, but some are not. The question about intentional trespass is interesting, and I am delighted that we are pushing the Minister to provide an up-to-date statement on that. In South Derbyshire, I have found that when Travellers trespass intentionally on private land we can get them shifted within 24 hours by using bailiffs. I want to encourage all hon. Friends to let local residents and councils—and perhaps the local police force—know about the possibility of using bailiffs to move Travellers on within 24 hours. We still have an issue with council protocols, and perhaps the Minister will clarify our position on releasing councils from the draconian issue of 28 days’ notice. I hope that hon. Members will accept my apologies; I will not be present at the end of the debate because I need to go to prayers.
I thank my hon. Friend for making a valid point, to which I am sure the Minister has listened. She is absolutely right. It is not only the two communities—the settled community and the travelling community—that need clarity. Local government itself needs a clear steer on this matter and the tools to carry out the task.
Order. I encourage the hon. Gentleman who has the floor to ensure that he leaves enough time for the Minister to respond to the debate and enough time to make his own points. Of course, I cannot stop him allowing others to intervene, but he may want to implement a rule of one intervention only.
Thank you for your wise advice, Mr Streeter. If I can make some progress, perhaps I can give way shortly. Figures from Brighton and Hove city council show that in the past three years, costs of about £233,000 have been incurred simply in clearing up unauthorised encampments.
I apologise for intervening so soon, but my hon. Friend has made a specific point. In my constituency of Romsey and Southampton North, there has recently been an illegal Traveller encampment at Monks Brook. That is one incident among recurrent incidents at that site. A significant amount of mess, of varying types—some of it very unsanitary—has been left behind for the councils to clear up, and of course the ultimate cost of that will fall on the hard-pressed council tax payer. I very much hope that my hon. Friend the Minister will tell us about any support that might be available for councils, even if it is just in the form of strengthened powers to ensure that encampments can be moved on more quickly.
I thank my hon. Friend for making a valid point. Clearly, the money that is spent in tidying up and clearing up the mess in these instances comes from taxpayers. I for one would like to see that money spent on parks, libraries, grass cutting or any number of other, more constructive things—[Interruption.] Perhaps it could even be spent on weekly bin collections, as a colleague of mine suggests.
In addition, as I mentioned, the previous, Conservative-led council spent some £160,000—again, no mean sum in local government terms—on refurbishing the Traveller site built 10 years or so previously. I understand that the annual budget of the council’s Traveller team is £310,000. Often, the criticism is classed as nimbyism or, worse, racism, yet nothing could be further from the truth. My hon. Friend the Member for Mid Sussex (Nicholas Soames) mentioned communities living in harmony. That is exactly what we all seek to achieve. What people in my constituency and, I suspect, in other constituencies say is that people should be able to lead their lives in their own way, but not if their doing so creates an inconvenience and a cost for others.
I thank my hon. Friend for securing this vital debate. Does he agree that it is vital that the support of the new Green administration in Brighton and Hove for Travellers, which appears to be linked to some unlawful instances of destruction of public green spaces such as in Victoria park in my constituency, is reversed as a matter of urgency?
Thank you, Mr Streeter. The comments of the lead councillor of the city council, who said that the group of Travellers had “reluctantly” been moved on by the council, do not imply a willingness to see fewer encampments rather than more.
To be fair, I understand, following discussions with senior officers in the council, that the policy has not changed in terms of moving Travellers off unauthorised encampments as soon as possible, yet the tone of public statements by the Green council sends a very different message. We shall see who is right when a large group of Travellers leaves Essex in the near future. Where will they go—to a council that is not sympathetic or to one that because of the statements of its senior figures appears to be so? The Greens have set a dangerous precedent by their public attitude and comments, and residents are genuinely worried about what may be about to be visited upon them in terms of nuisance and cost.
I mentioned that a further type of unauthorised encampment has been created in the historic Old Steine area of Brighton. That is a large, open, grassy area close to the seafront with a café and fountain. It is possible to see the pier from the Steine and it is a favourite attraction for residents and visitors alike. Several weeks ago, several people, protesting on the eve of the Spanish general election regarding the austerity measures having to be taken in that country, decided to create a tent city on the Old Steine. They had a very happy time, banging drums, writing protest placards and creating a focus for world revolution, yet the reality is that their camp was unauthorised. They are now moving on, but some still believe that it is their right to reoccupy the area whenever they choose.
We know, Mr Streeter, how permanent so-called temporary tent cities can become. We have only to look feet behind the chair in which you sit to see one across the road from the Palace. Many constituents rightly argue to me that if a group of protesters is allowed to set up camp like this and, crucially, are not moved on by the police, why cannot they, with a group of friends, take their caravans and tents to the Old Steine and make a holiday camp for themselves? The only difference seems to be that one group has placards decrying the democratic processes that actually allow dissent and protest and the other does not. There is no excuse for long-term tent cities such as this. We have a vigorous Parliament, where issues are debated and decisions on the management of national debt and other important issues are made on a daily basis.
I strongly regret and deplore the way in which the hon. Gentleman is using a very sensitive issue as a political football. That does no credit to him or his constituents. What we should be doing across the south-east is working together to find more permanent sites. That is the crux of the problem that we are discussing. He will know, because council officers have said so, that the number of Travellers and Gypsies coming into Brighton is no greater this summer than it has been for any other summer recently. He will also know that the very first act of the new Green cabinet—the very first thing that it did within minutes of being sworn in—was to evict people, very sensibly and responsibly, from the Woollards Field site in Brighton. I therefore urge him to treat this issue with the sensitivity that it deserves, not to conflate the issue of the Old Steine with what is happening with Travellers and Gypsies. Those are two separate things. The actions on the Old Steine were such that they minimised—
I thank the hon. Lady for her intervention. I would like to move on and briefly mention party houses. Those are homes, generally in quiet, residential areas, that are often used to sleep about 20 people. That can lead to days of non-stop partying until the early hours. That disturbs residents, who are entitled to the quiet enjoyment of their homes. It destroys the amenity of an area and creates a further sense of a flouting of the rules by which most sensible communities live. If people choose to live in the centre of Brighton, they can expect noise and disturbance. If they choose to live in an area that is mainly residential, they should be able to expect to go to sleep at night. The previous leader of the council held round-table discussions with council officers, the police and fire authority representatives to see what could be done. What she heard was that, essentially, the hands of public authorities seem tied. That cannot be right.
I urge the Minister to consider the following. We need to strengthen the powers of the police to move Travellers on much more quickly than is the case now. There should be clear guidelines about when the police must act, and those guidelines must err on the side of protecting the property and amenity rights of the settled population. The issue of mandatory welfare checks needs to be urgently reviewed, as well as the level of resources that local authorities need in order to undertake the work required when Traveller incursions take place. On protest camps, the law of trespass needs to be firmly enforced. Again, the police must be given clear instructions on how to handle such situations. On party houses, I believe that we need an amendment to the Localism Bill, which is now in the other place, to give local authorities more powers in that regard.
People in Brighton tell me that they have had enough of their lives being disrupted by outside groups that use the city for their own ends. The settled majority have rights, too, and they are looking to Parliament to uphold them.
It is a pleasure to serve under your chairmanship, Mr Streeter. I apologise to you and to my hon. Friend the Member for Brighton, Kemptown (Simon Kirby) for arriving a little late and missing the very beginning of his speech, but I quickly caught up with the gist of it. We will get the clocks department at the Department for Communities and Local Government checked.
I am grateful to my hon. Friend for raising this issue and to those Members who have participated. From my postbag as a Minister and from the postbags of my colleagues, I recognise the strength of feeling among Members of the House and constituents on this issue. I am also aware of it from my experience as a constituency Member of Parliament; indeed, my next-door neighbour, my hon. Friend the Member for Beckenham (Bob Stewart), inherited the site he talked about from me in the boundary revision. The issue therefore needs to be approached proportionately.
Without being invidious to others, perhaps I can single out one of the Members who intervened. My right hon. Friend the Member for Mid Sussex (Nicholas Soames)—I hope that I may call him that already, and I am delighted to be able to use that term, which is thoroughly well-deserved—got it absolutely right: the key test is fairness, a sense of balance and consistency, and that is where the difficulty arises.
The Government recognise that Gypsies and Travellers have a right to exercise their traditional lifestyle. It is equally true, however, that anyone exercising their lifestyle must have regard to the concerns of their neighbours and the communities in which they live. The Government are seeking to achieve balance and consistency on that. When there is a perception that one group can, for whatever reason, achieve objectives that other members of the community cannot, perceptions of unfairness arise. As my right hon. Friend rightly said, that presents a risk to community cohesion. The Government want to address the issue in a way that recognises that the majority of Travellers behave lawfully and properly. However, the minority who do not do so make life much harder for the law-abiding majority, as well as for their neighbours. We therefore seek to strike a balance.
We have sought to adopt a proportionate twin-tracked approach. We have abolished the regional strategies, because arbitrarily imposed, top-down targets on Traveller site provision did not work, alienated communities and did not always accurately reflect the need on the ground. On the other hand, we have sought to encourage the appropriate provision of more authorised sites in the right places. To that end, future authorised sites will attract the new homes bonus. We are also making available £60 million to support local authorities and other authorised providers in delivering further authorised sites.
We have set up a cross-departmental working group to look at some of the welfare issues that hon. Members mentioned. We have recognised that those who live on authorised sites are entitled to a measure of legal protection. Since 30 April, we have strengthened their position by applying the Mobile Homes Act 1983 to local authority authorised sites, giving people living on such sites greater security of tenure. All those are incentives to encourage Traveller families to seek authorised sites. That, therefore, is the positive side—the assistance to Travellers, which is an important part of the mix.
On the other hand, we recognise that it is necessary to strengthen enforcement provisions in relation to unauthorised sites, because those are where the damage to community relations and the environment is done. As well as abolishing the regional strategies, which were unfair and ineffective and which caused resentment, we have published proposals for a new planning policy for Traveller sites. They were published for consultation on 13 April, and the consultation will close on 6 July. We have already had a lot of responses.
The proposals seek to remove the two existing circulars—one on Gypsy Travellers and the other on travelling show people—that were introduced under the previous Administration. They have not worked effectively and have caused inconsistency and resentment. We intend to replace them with the light-touch guidance we have set out in the consultation document, which will provide a fairer balance. We have not yet removed the circulars, because there must, as you will know, Mr Streeter, be proper consultation on all such matters. However, it is worth bearing it in mind—local authorities should bear this in mind—that the Government’s intention to revoke the circulars is itself a material consideration, which local planning authorities can take into account when deciding to act on planning or enforcement matters, as is normally the case in planning law.
I suspect that my hon. Friend has already done so, but if he has not, I urge him and any of his constituents with an interest in this issue to look at the consultation document, which is on the Department’s website. We are not in the business of centrally allocating sites—that was the vice of old regional strategies. In the consultation, we give authorities guidance on the appropriate steps they can take to assess need in their areas realistically and sensibly. That is the more proportionate approach. We are therefore dealing with the issue.
In the Localism Bill, which is in the other place, we are strengthening the law on enforcement, and there are several relevant measures. I accept that cynical breaches of planning controls are a particular vice. For example, a site can be occupied specifically on a bank holiday, when the council offices are often closed, which makes it difficult to serve the appropriate notices. Hardcore is then laid, for example, so that an element of development has taken place. To deal with such issues, my right hon. Friend the Secretary of State has alerted local authorities of the need to be vigilant over bank holidays, as my hon. Friend the Member for South Derbyshire (Heather Wheeler) said.
In the Bill, we are also strengthening the penalties for non-compliance with a breach of condition notice. We are including proposals to limit opportunities for retrospective planning applications, which is a particular area of abuse. That relates not only to applications involving Gypsy Traveller sites. In my constituency, some cynical developers have built out a dwelling development in a way that is not in accordance with the plan and then gone back for retrospective permission to get a second bite of the cherry. All such practices bring the system into disrepute, and we intend to restrict the opportunities to undertake them. As my right hon. Friend the Secretary of State said, retrospective permissions should be there to protect those who make an innocent mistake, not those who cynically seek to manipulate the system.
I welcome the fact that the Minister recognises that the lack of authorised sites is driving many Travellers and Gypsies to use unauthorised sites, and I hope that even more resources will be made available to provide more sites. However, does he agree that compact agreements between councils and Travellers can be a useful tool in building good relationships? Will he therefore support Brighton council’s plans to go in that direction?
It is entirely for councils to adopt the approach they think is relevant. The Local Government Association has a useful working group on this issue, which is chaired by Councillor Richard Bennett, who is a Conservative councillor—no one party has a monopoly of interest on this. The group has done some pioneering work on encouraging good local practice, but the Government do not seek to impose a one-size-fits-all approach.
A proper supply of authorised sites is certainly necessary, and it is regrettable that the previous Government’s approach did not deliver them. We think our approach will be better. Strengthening enforcement in the way I described, restricting the ability to go back for retrospective permissions and strengthening the powers on temporary stop notices—another issue on which concern has been expressed to us—will achieve more of a balance, so that we can assist proper, appropriate, authorised development, while clamping down on inappropriate and unauthorised development in the way that has been suggested.
My hon. Friend the Member for Bromsgrove (Sajid Javid) mentioned extending the criminal law, and the Government would want to consider that with care, as the Prime Minister said. At the moment, we have a package that will deliver a better balance, and I would like the opportunity to take it forward before we move on to considerations that go beyond that. I hope that that indicates the Government’s stance.
I am pleased to have the opportunity to debate this subject under your chairmanship, Mr Streeter.
This is carers week. It is a time for us to praise carers, to have our photographs taken and to issue press releases to our local newspapers to show how much we care for the carers. In fact, however, it is a worrying time for carers, and the first aspect of that is the budget cuts.
The Government have made a great deal of their injection of £2 billion a year of extra money by 2014-15 to support social care. The Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow), said that this
“means councils can meet cost pressures and maintain services”
However, an Association of Directors of Adult Social Services survey found that 98% of English councils showed overall budget reductions, even when taking account of the additional £1 billion for 2011-12.
Age UK says that spending cuts are projected to reduce spending on older people’s care by £300 million over four years, and that real spending on their care will be £250 million less in 2014 than it was in 2004. That is despite the fact that, during that time, we will have seen a rise of two thirds in the number of people over 85, one of the biggest groups that need care.
In 2005, half of our councils provided support to people who were assessed as having moderate needs. In 2011, however, that figure had fallen to 18%. To qualify for adaptations that could help them to manage better without care, people are assessed largely on the same basis. One example is showers that enable people to bathe without assistance. In the overwhelming majority of council areas, people now have to demonstrate critical or substantial need. Many constituents have asked for help with such things as shower adaptations but have been refused because they do not meet that need. One constituent has told me that, as a result, she can take a bath only if her daughter is there to help, yet she lives some miles away. If she had a shower, she feels that she could use it on her own, without having to call on her daughter for assistance. Not only would that improve her well-being and self-esteem, but it would clearly reduce the need for care. Use of these levels of eligibility for the person who needs the care places a greater burden on friend and family carers, who have to fill the gaps.
I argue that the cuts are short-sighted and could end up being more expensive. For example, if the carers’ help is compromised by having to take on an extra burden of care, or if the ill or disabled suffer accidents—perhaps because they do not have adequate adaptations—it will cost us a great deal more. We know that an older person having a fall is more likely to require expensive hospital care, or that a fall can act as a trigger for needing long-term residential care. Such accidents can often precipitate events that might not have happened for a long time, if at all. It is in that context that I argue that the cuts could be short-sighted.
In April, my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) carried out a survey of 61 councils; 27 were Conservative, 29 were Labour, four were Lib Dem. It showed that 88% of councils were increasing charges for social care services; that 16% were raising eligibility criteria, which as I said had already been increased; that 54% were making cuts in the voluntary service; and that almost two thirds were closing care homes or day centres. The Government’s response is often to say that it is primarily for local authorities, under the localism agenda, to decide how to spend the money. I bring to this debate a cautionary tale from north of the border.
Four years ago, the Scottish Government discovered localism, although they did not call it that. In 2007, they entered into a concordat with local government that included the removal of most ring-fenced funds and what I would describe as the velvet embrace of a four-year council tax freeze. Adult social care is not statutory. As a result, it often suffers in budgetary crises. Supporting People funding, which is primarily low level and preventive in scope, has been used since its introduction in 2003 for such things as supporting people in sheltered housing, and helping to meet part of the cost of care packages for people with learning and physical disabilities who have been moved out of institutional care—something that we all agree with—into their own homes.
The end of ring-fencing has led to a reduction in low-level support, the money being used to meet more immediately urgent needs. However, it has proved extremely difficult to track exactly where the funding is being used. The removal of the ring fence has made it hard to be absolutely certain that the money is not being used as it once was, other than through some of the outcomes.
Home care hours have been cut substantially in my city over the last four years. Many people now receive short visits—perhaps 15 minutes at the beginning and end of the day. However, the beginning and end of that day will be whenever the care services deem them to be, and people may be put to bed at 8 pm because it suits the care service. As a result, many families are having to plug the gap. That takes no account of considering such things as paying for care services. Visits can be very brief indeed.
A further difficulty in tracking what is happening is the increasing individualisation of decisions on care. A professional decision that someone needs fewer care hours can be hard to monitor, as individuals do not know what is happening to others and do not necessarily know that there is anything to challenge.
A family who I visited at the weekend have had their care hours cut from 50 to 42 a week. The husband, who is 74, has suffered severe strokes and needs constant care. His family have seen no change in circumstances other than their observation that they are worse, not better. His main carer is his 71-year-old wife; but having been fit and healthy and having worked to age 65, she is now beginning to suffer health problems, and recently suffered a slight stroke from which she has now recovered. No overnight care is provided outwith the family, and the wife often gets little sleep, with other family members regularly having to stay the night to give her an overnight break. The payments that the family receive to pay for care have reduced from £560 per week to £475 per week, based on the argument that their need was less. The family suspect that it is do with funding cuts. It would be more straightforward if local authorities were to say so, rather than suggesting that a professional decision had been made.
Others might touch on this later, but concern has been expressed about what has happened to the money for respite care that was made available by the previous Government. Many of the organisations involved have complained that it was not clear where the money had gone or whether it had been used for the purposes for which it had been granted. Further money has been given. The Prime Minister spoke about it again today. However, the main question is whether the money is being used for the purposes for which it was given. Although a hands-off localist policy makes it possible for Governments, devolved or not, to disclaim responsibility for what is happening, they remain, none the less, the largest funder of local services. A policy of successive council tax freezes tips the financial balance further towards central Government.
Cutting support for the elderly and disabled is described as the cruellest cut of all. Is my hon. Friend concerned that the Prime Minister described Birmingham city council as “excellent” when it had been branded in the High Court as acting unlawfully in taking away care from 4,100 people in substantial need? Does she not agree that the council should continue to support organisations such as Elders with Attitude because they bring people out of their homes and stimulate them mentally and physically so that they lead a good life and do not become dependent on the national health service or have to go into a care home?
That is clear example of what is happening up and down the country not only for older people who need care but for older carers themselves, who have very specific needs. Half of the 6 million people who are providing unpaid care in the UK are aged over 50. In England in 2010, nearly 1 million people aged 65 and over were providing unpaid care to a partner, a family member, who might be younger than them, or some other person. The largest number were aged between 65 and 74, but there were nearly 50,000 people over the age of 85 who were giving substantial amounts of care. A quarter of all carers aged 75 and over provided 50 or more hours of unpaid care per week. Carers over retirement age are a particularly vulnerable group because they tend to have health issues themselves. Such people say that they really have no retirement or that they have not been able to enjoy the retirement that they had expected.
I congratulate the hon. Lady on securing this debate. She refers to the age of carers. The survey to which she alluded earlier indicated that about half of all carers are in poor health. We often use the expression “a time bomb”, and it can be a cliché, but here we have a living example of a literal time bomb. If 50% of carers are in poor health themselves, we will, within a few short years, have a double whammy of a problem to deal with—the people who are being cared for and the carers themselves.
I thank the hon. Gentleman for that contribution. That is exactly the point that I was trying to make. The carers face not only health problems, but financial difficulties. Carers over retirement age do not receive a carer’s allowance even though they incur additional costs. They could use additional funds to buy some respite time that they might not otherwise get. They often become cut-off and isolated because they are not able to get out of the house to enjoy the sorts of social activities that enable people to live healthier and more fruitful lives.
Furthermore, there is an anomaly that needs to be resolved. Those on a low income who are over retirement age claim carer’s allowance, but they do not get paid it. Instead, they get access to a carer’s premium in pension credit. We have about 250,000 carers in that category. It is very confusing because they are claiming a benefit that they do not receive in order to get access to a completely different benefit. Hopefully, that is something that the current Government, with their zeal for simplifying the benefit system, will move very quickly to address.
As we debate this subject in Westminster Hall, the main Chamber is considering the Welfare Reform Bill on Report. Many colleagues who would have liked to be here are taking part in that debate. They know how important the Bill is to carers as well as to other people. The proposed changes to benefits are a big worry for carers. At present, carer’s allowance can be claimed if the person being cared for qualifies for either the middle or higher rate component of the disability living allowance. The successor benefit, the personal independence payment, will only have two bands of the daily living component, which is the equivalent of the care component. What is still not clear is how eligibility will work under the new benefit. Will it apply only if the cared-for person receives the new higher rate? How many people will lose eligibility for carer’s allowance as a result of these changes? In the Bill Committee, the Minister was unable to give us an answer to that question. However, Disability Alliance has calculated that to achieve even £1 billion of cuts to DLA—the Government’s forward projections expect there to be a £2 billion saving overall—there could be a risk to 643,000 people who currently receive the lowest rate and to a further 100,000 people on the middle or higher rate.
We are told by the Government that we cannot assume that everyone who currently gets the lower rate of DLA will lose out in the benefit changes because the new test will be very different to the old one, which leaves a question mark over an undetermined number of people. We cannot assume that all the losers in the new personal independence payment regime will be people who do not have a corresponding link to the carer’s allowance.
I congratulate my hon. Friend on securing this timely and important debate. There is no doubt that the proposed cuts to the employment and support allowance and the DLA will have a devastating impact on thousands of families right across the country. One such couple, Mr and Mrs McCann, wrote to me expressing their own concerns. They both had to take part-time jobs because of caring responsibilities for their daughter, resulting in a 50% reduction in their combined salaries. They do not qualify for carer’s allowance because they have an income of more than £100 a week. They rely on their top-up element for their child tax credit and the DLA that their daughter receives. Does my hon. Friend think that it is fair that this family should have to face the brunt of the cuts and even further hardship?
I certainly do not think that that is fair. I also fear that for some families, not necessarily for my hon. Friend’s constituents, it can be the crisis point that makes it impossible for them to continue with their caring responsibilities. If the family cannot continue to care, the cost to society of institutional care will be very much higher than that of properly supported family care.
There is also a small group of carers who currently receive income support. They are not necessarily in the same household as the person for whom they care, but their caring responsibilities mean that they are unable to be in work—or at least to be in very much work. Around 250,000 people are in that category. They will transfer from income support to universal credit, and, as currently drafted, there is no earnings disregard on that for carers. At the moment, a carer in receipt of income support has a £20 a week earnings disregard, which enables them to do some part-time work as well as their caring responsibilities and still have some financial benefit. An amendment to the Bill on Report was not accepted by the Government, but I hope that they will think again on that point.
There could also be people with caring responsibilities who would fall foul of the proposed benefits cap. A single parent with three or more children living in a relatively high-rent area who also cares for a parent living somewhere else could be affected. The Government have made much of the fact that people receiving DLA will not be affected by a benefits cap, which is good. However, there are people who are carrying out an important caring function who might, in certain circumstances, be covered by the cap. I ask the Government to consider exempting them.
Important changes are also proposed in relation to the money that is given to families with disabled children. Disability additions under universal credit will continue to be given in similar ways to the additions and premiums that are given within the current benefit system. However, the current lower rate of benefit is being halved. We are told that the higher rate is being increased—by £1 a week—but many families who have children receiving the lower rate of payment will have their payment halved. The reason being given for that is that it brings the disability additions for children into line with the disability additions for adults. However, I have a question, one that I have asked previously in relation to these reforms. Why do such alignments always have to be downward? Why is it only deemed to be fair if we equalise downwards—not even meeting in the middle, but equalising downwards—in this way? Given the considerable additional costs that we know families with disabled children have, this change seems to be another particularly harsh one and it will worsen the position of many families.
There is a cumulative effect to all of these changes. There are benefit changes of several kinds that might kick in for the same household, together with changes in the support provided by local authorities for services such as home care. The cumulative effect of all these changes will be very harmful indeed to families who have someone who needs a certain level of care. There will also be a particular effect on the carers themselves, those people who we are only too pleased to praise in this one week of the year. We have to put our money where our mouth is on this subject.
To conclude, I have a number of specific questions for the Minister. What assessment have the Government made of the impact on carers of the estimated £1 billion of cuts to social care services in the current financial year? What arrangements do the Government have in place to monitor what is happening at local level, so that they can fulfil their pledges to improve support for carers? The changes in benefits, such as the change from DLA to PIP and the move to universal credit, could lead to thousands of carers losing carer’s allowance, so is the Department of Health assessing the impact of those changes to families and indeed to services if families can no longer afford to provide care? Will the Minister seek to ensure that carers do not lose out in the welfare law reform proposals? At the moment, we are being told that some of these things will be ironed out, potentially in detailed regulations. So, whatever happens with the Welfare Reform Bill today, detailed regulations could still be needed and I want to know what the Minister will do to raise this issue with her colleagues in the Department for Work and Pensions. Also, do the Government intend to accept the Law Commission’s recommendations set out in its recent report on carers? Finally, how should the forthcoming reform of the funding of social care take account of carers’ contributions?
I thank everyone for their attention to this subject today and I look forward to hearing the Minister’s response in due course.
The whole House owes the hon. Member for Edinburgh East (Sheila Gilmore) a great “thank you” for having secured this debate in carers week. As co-chair with Baroness Pitkeathley, who is in the other place, of the all-party group on carers, I am particularly glad to have the opportunity to take part in this debate.
In the US Congress, there is a wonderful device that allows people to read a chunk of their speech into the record. I am beginning to feel that for Westminster Hall debates I should have a standard set of three paragraphs about the budget deficit, which I will put on my website, and that those paragraphs should be read into the record. I say that because I think that it will be very tedious during the course of this Parliament if Labour colleagues simply come to Westminster Hall and say, “Woe is us, the Government are having to make budget reductions”, and I then have to explain, “Well, actually…”
I calculated all the money that the Government give to my district council, county council, the Thames Valley police authority and the health authority in my area. We are spending more in 11 days simply on funding the budget deficit than we are on funding all those services in Oxfordshire. That is just not sustainable. So we all have a collective responsibility to be grown-up about the challenges that the Government have to face on the national finances.
We have had this type of discussion before about productivity, deficit reduction and so on. However, is it not the case that the Government have made a firm commitment to protect the most vulnerable people in society and is it not right that Labour Members, who have turned out in numbers for this debate today, should hold the Government to account on that commitment? This issue is about choices and the Government are making a choice here that will affect some of the most vulnerable people in society.
Of course all of politics is about choices. However, the hon. Gentleman might want to reflect on the fact that the international credit-scoring agencies are now rating Greece as one of the countries that is at greatest risk of having its finances collapse; only Ecuador and Jamaica are at greater risk in that respect. If one does not take responsible actions to maintain the nation’s finances in good order, one runs that type of risk. The Government have made sensible choices about increasing spending on the NHS in real terms, but that means that there are consequences elsewhere and other choices have to be made. I think that we have to be grown-up about that.
The hon. Gentleman is of course right that those in government, whether that is central or local government, should be wise custodians of the public purse. Can he explain, therefore, why Birmingham city council defied advice that it was acting in breach of the Disability Discrimination Act 2005 and spent £750,000 on pursuing a case that ultimately failed? Would it not have been wiser for the council to have spent that money on care for the elderly and disabled in Birmingham?
With respect to the hon. Gentleman, it is often difficult for statutory bodies to know where their responsibilities lie and that is particularly so in the world that we all have to live in—a world of emerging human rights legislation. I must declare an interest as a practising barrister. I have to say that the main growth area for the Bar at the moment is judicial review, including judicial review in the Supreme Court, to test the statutory responsibilities of local authorities, and I am sure that we will see more of that. Having said that, I do not think that that gets away from the Government’s responsibility to try to bring the nation’s finances back into some balance.
I am sorry, but I will not give way any more because these exchanges demonstrate why I need to read into the record for future debates the three paragraphs that I mentioned earlier. We would all love to have lots more money that we could spend, but alas that is not the case.
With regard to this particular debate, it seems to me that there is a lot more that can be done to help and support carers without necessarily spending a huge amount of extra money. The first thing that we ought to do, or at least we ought to make a much greater effort to do, is to identify which people are carers and to encourage carers to see themselves as carers. Local authorities provide considerable services for carers, but of course they can only provide those services if people identify themselves as carers.
I will not give way, as I just want to make a little more progress.
I was quite interested in a note from Sainsbury’s. Sainsbury’s has been pursuing an initiative in Torbay to help to identify “hidden” carers. It was working with the Torbay Care Trust and it sought to identify customers in its supermarkets who might have caring responsibilities. Staff talked to customers and if it seemed that a customer might be a carer, they were asked if they were in fact a carer. If the customer said, “Yes”, they were then directed to a trained member of the Torbay Care Trust. In a very short period, that initiative led—in just one supermarket—to 140 new people signing up with the Torbay carers’ register.
Sainsbury’s is going to expand that initiative to other stores across the country. I suspect that huge numbers of people who act as carers do not know that that is what they are, for example, husbands and wives who look after loved ones, and young people who look after parents. We should be working as hard as possible to help people to recognise that they are carers. Considerable help and support are available for people who know they are carers. In carers week, one can see that a range of organisations have come together—
I will give way to the hon. Lady in a moment.
A range of organisations that provide advice and support have come together, including Age UK, Carers UK, Counsel and Care, Crossroads Care, Dementia UK, Macmillan Cancer Support, the Multiple Sclerosis Society, Parkinson’s UK and the Princess Royal Trust for Carers, but they obviously cannot give advice unless people actually recognise that they are carers.
I agree that identifying and supporting carers is important. Will the hon. Gentleman therefore communicate to the Minister with responsibility for care services that he should support my Carers (Identification and Support) Bill, which the Government have indicated they would not support? The Bill would provide a basis for the proper identification of carers by NHS bodies, local authority bodies and schools. It is more appropriate that public bodies help to identify carers, rather than the task being left entirely to supermarkets such as Sainsbury’s.
I do not dissent from that, and in a second I will come on to the Law Commission’s report. It is important that we recognise carers, and if statutory bodies can help to identify them, that too is important.
We are fortunate this afternoon to have the Under-Secretary of State for Health present, and I wish to make a couple of points about carers and health. Often nowadays, when a person being cared for goes to see their GP or a specialist, the carer is treated as if they were invisible. The concept of patient confidentiality is being used as a mechanism for denying the person who is being cared for the support of their carer, whether it is children taking their aged parents to see the doctor, or a husband taking his wife or vice versa. Often, the carer is able to provide counsel and care for the person they are caring for, and they should not be seen by the GP or the health service as invisible. The NHS, GPs and the Royal College of General Practitioners need to work out a protocol for how the NHS deals with carers. There obviously have to be some balances concerning patient confidentiality, but it must be possible to work out how the NHS should deal with and respond to carers.
Carers are most concerned about the people they are caring for needing access to the NHS in the evenings and at weekends, when there are out-of-hours systems in place. The out-of-hours GP system was, as it happens, brought in by the previous Government, and it is of variable quality across the country. I think that the Minister will find that one of the growing pressures on the NHS is the number of people who self-refer to accident and emergency departments in the evenings and at weekends, because they can at least be confident of being seen, even if they do not need A and E treatment. They cannot be turned away at the door because the NHS has a duty of care when they turn up. It might be sensible to have primary care triage in A and E departments. We have a Darzi centre in Banbury, but I see no reason why one should not have primary care triage at the door of A and E so that people who do not require A and E services can be confident of accessing primary care without having to hang on on various helplines, or talk to distant voices in which they have no confidence. That would give much greater confidence to carers and to those for whom they were caring, and would significantly reduce the cost to the NHS of the significant number of inappropriate treatments and admission at weekends and in the evenings.
Another responsibility of the Department of Health are carers’ breaks, about which many carers are very concerned. One of the longest running campaigns of the all-party group on carers over the years has been on carers’ breaks. There are supposedly significant amounts of money in the system—some £400 million—for carers’ breaks but, as is the case with so much money, it is not ring-fenced. Some PCTs have been extremely good about that, but we will need to watch where the money goes, particularly as we transfer to GP commissioning. Can we develop systems of best practice? It is not just a question of talking about carers’ breaks; we also need to ensure that systems are in place.
Sitting suspended for a Division in the House.
Let me conclude this part of my speech by asking whether the Minister will give an undertaking that her Department will closely monitor what happens to the money that is allocated for breaks for carers as we move from primary care trust funding to GP commissioning.
Finally, I want to make two brief points. First, the hon. Member for Edinburgh East spoke about the Law Commission’s proposals for reforming social care law. That sounds a rather dry topic, but an enormous amount of Back-Bench time has been invested in it. Most carers’ rights have come about in law because various private Members’ Bills have been brought before the House over the years by the right hon. Members for Coatbridge, Chryston and Bellshill (Mr Clarke) and for Croydon North (Malcolm Wicks), Lord Pendry and the hon. Member for Aberavon (Dr Francis). They have had carers’ rights at their heart, but the need for a carer’s assessment is the gateway.
Often, carers do not know that they are entitled to a carer’s assessment, and many local authorities, perhaps for understandable reasons, do not prompt people to think about asking for one. If such major social care rights for carers were incorporated in primary legislation, it would be the first time that a Government had taken such a step. It would therefore be helpful to know whether the Government intend to accept the Law Commission’s recommendations on carers. The only difficulty with the Law Commission’s proposals is that they deal only with adult carers. Any legislation needs to address the rights of parents of disabled children as well as the rights of the growing number of young carers.
Secondly—I will not repeat the points made by the hon. Member for Edinburgh East—will the Minister help the House in relation to carer’s allowance? To get it, people need to get a certain level of disability living allowance or, in future, personal independence payment. There is some concern and, indeed, confusion about who will be entitled to carer’s allowance in future. It is a significant allowance for many carers, because it is a non-means-tested benefit that signals and validates the fact that someone is a carer. It is therefore a valuable allowance in terms of not only the monetary value, but the recognition that someone is a carer. It would be helpful to have some clarification on that point.
It is a pleasure to serve under your chairmanship, Mr Streeter—let us hope that we do not have too many more interruptions.
There cannot have been a more worrying time to have caring responsibilities, given the abuses at Winterbourne View; there must be a real worry that such things are happening in other care homes or hospitals. There are real worries about the future of Southern Cross, which is still very uncertain. There are also the issues that we are discussing, including the cuts to council budgets, which are resulting in the downgrading or loss of packages of care services. Carers have a range of worries and fears, some of which I want to cover, because these are serious problems for many families and it is right that we are debating them today. I congratulate my hon. Friend the Member for Edinburgh East (Sheila Gilmore) on securing the debate and on the excellent way in which she opened it.
It is 10 years since I started to meet carers in the course of research that I undertook for the Princess Royal Trust for Carers. In that work, I met many hundreds of carers, who opened my eyes to the issues with which they live day in, day out. Some time after I entered Parliament in 2005, I introduced the Carers (Identification and Support) Bill—not all Members were here when I said that I will send a copy to the Under-Secretary of State for Health, the hon. Member for Guildford (Anne Milton), and to the hon. Member for Banbury (Tony Baldry) because he seems to support the ideas behind it very much.
This year, the theme for carers week is, “The true face of carers”, and its aim is to highlight what life is like for carers and the challenges they face. New research for carers week shows that 80% of carers are now worried about the consequences of cuts to services. As has been mentioned, the survey of social service directors showed that adult social care services face cuts of £1 billion. The Minister has been asked this question, but I would like to emphasise the point: what assessment have the Government made of the impact on carers of the estimated £1 billion in cuts to social care services? I have some detail on impacts being felt in Greater Manchester.
Whatever we think about it, many councils are having to struggle with the Government’s swingeing front-loaded cuts, amounting to 27% over four years—that is the figure in the Budget. Many have found themselves having to cut grants to voluntary organisations, which is having an impact, and many are increasing or removing caps on care charges. As we have heard, the survey undertaken by my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) showed that 88% of the councils that responded were increasing charges for social care and 54% were cutting support to the voluntary sector. It is a double whammy—cuts in support and increases in charges.
Like everyone else, carers are hit by increases in the cost of living, which we must also take into account. Fuel costs and VAT affect them in the same way as they affect other people. Most carers are financially worse off than other people, because many have had to cut down on or give up work so that they can care.
For this debate, I asked local organisations in Greater Manchester to tell me exactly how cuts or fears about cuts are affecting carers. A staff member at the Bury, Salford and east Lancashire branch of Parkinson’s UK told me of her experience. She said that there had been a big increase
“in calls from people who are living on very tight budgets with no chance of increasing the family income due to disability and caring responsibilities, distressed because they can’t afford day to day living costs.”
The calls that she receives are about the knock-on effects of lack of money—stress, not eating well, relationship difficulties or breakdown, anxiety and depression. They can lead to illness worsening, and if a carer becomes ill and cannot cope, it can lead to hospital admission. She also said something that ties in with points made earlier in the debate:
“More people with Parkinson’s disease are being turned down for”—
allowances such as—
“disability living allowance and attendance allowance. There is no sense to who gets the benefit and who gets turned down…The distress this causes families is huge because they feel that they are begging. I can only imagine that families who don’t have support miss out completely. The benefit is meant to pay towards the extra costs of having a disability, the fact that genuine people are being turned down means that carers”—
would end up—
“having to do even more.”
My hon. Friend the Member for Edinburgh East raised carers’ eligibility for benefit, which I think is and will become the key issue due to the Government’s programme of cuts and the uncertainty. The Minister has already been asked the question, but will she tell us in this debate what the impact will be if those carers who lose their carer’s allowance decide that they can no longer afford to care? The responsibility for caring will then fall to the local council and the state.
I do not think of my constituency as different from anyone else’s, so I am sure that the hon. Lady will agree that young carers clearly play an important role. Those who are 16 years old and under do not qualify for any financial assistance, but their role is critical for the family, parents and those they look after. Does she feel that the coalition Government should address the importance of young carers?
I very much agree. I have a point to make later about that topic, because the staff who work on the young carers project in my constituency have said that they are very concerned about carers losing their education maintenance allowance. That is the one support that the state gave young carers and it is going, which is a worry.
To return to the testimony from Parkinson’s UK, the final points were about more carers contacting the staff member to ask for help finding respite because they are struggling to cope; financially, they cannot now afford a break, a treat or a holiday. I am glad that the hon. Member for Banbury raised that point. The staff member said:
“I know of one carer who has had to take on a part time cleaning job in the early evening because money is so tight. She puts her husband to bed before she leaves”—
“at 4pm so that he is safer and so she won’t worry that he will fall while she is out.”
I think that we would agree that we would rail at care agencies that put a person to bed at 6 or 8 o’clock, yet this carer has to put her husband to bed at 4 o’clock because that is the only way that she can do the cleaning job that she has to do.
I also had some input from a branch of Age Concern in Greater Manchester about how cuts to grants are affecting its dementia support service, which is important because it is another line of support. Cuts to grants of 40% over the next three years are affecting its capacity to deliver individual and group support. That goes against objectives 5 and 7 of the national dementia strategy. The staff member told me:
“Carer support groups have had to close. These are groups where carers can get a break, have a chat to other carers and get advice and information from staff. These groups help to maintain morale and prevent carers from becoming socially isolated.”
Even though there are personal budgets, which will come in in Greater Manchester, carers of people with dementia often find it hard to mix in other social groups because of the “different” behaviour of the person with dementia. Carers have described the groups as a “lifeline” and something “to look forward to”. The fact that they are being cut back is important.
The proactive support to carers of phoning them every few weeks is another aspect of Age Concern’s work that is being cut. The staff member said:
“We now have to wait for them to contact us for time-limited intervention. We know that many older people are proud and longsuffering and will often suffer in silence rather than ask for help.”
Before the cuts, branches of Age Concern in Greater Manchester ran special events for carers such as a carers day each year, parties and trips. The reduction in funding means that it can no longer offer the extras that it knows give people a better quality of life. I am very concerned to hear that carers in my area in Greater Manchester are starting to suffer.
I want to return to the two sides to the debate—values and choices. We are fortunate in Salford because, due to the way in which the cuts and the organisational turmoil in the NHS are being managed, we are not suffering as much as other areas. There are choices. Labour-run Salford city council is now one of only 15% of local councils still providing support to people with moderate care needs, as well as to those with substantial or critical needs. We are fortunate to have an excellent carers’ centre run by the Princess Royal Trust for Carers. Salford has tried to ensure that carers continue to be supported through these difficult times. As I mentioned earlier, however much the council and our local NHS bodies support carers and try to maintain what they are providing, the national changes and cuts affect our carers.
The young carers project will be affected when the young carers lose their education maintenance allowance. The centre manager told me of two other concerns: the changes to benefits and disabled people being called in to take work capability assessments. The extra worry of having to take them and of having benefits curtailed are starting to affect carers.
The centre manager also said that a major concern for her organisation was that although the carers’ centre was very well established, the service has to go out to tender through the joint commissioning process next year. She said:
“We are aware of a number of carers’ services which have gone out to tender in other areas, and bids have come in from organizations and agencies which have no experience, knowledge or expertise in carers and carer issues, including organizations from abroad.”
What reassurance can the Minister give to staff of the carers’ centre that an established, trusted and effective organisation such as theirs will not be undercut in the tendering process by organisations with no local knowledge and no experience or expertise with carers or in carers’ issues? Our carers in Salford would lose out if they lost the valuable support that they get from their carers’ centre.
The Government’s economic policies are damaging support to carers. Government cuts to local council budgets have gone too far, too fast. Councils pleaded not to have their budget cuts front-loaded. We have lost £1 billion from adult care services at a time of rising need, and we have lost billions in grants to the voluntary sector, but the worst thing is that we are only a few months into the first year of cuts, and we can already see the impact on carers. Carers are fearful about the cuts and distressed that they cannot manage financially. People with serious conditions such as Parkinson’s are being turned down for attendance allowance and made to feel like beggars if they appeal. Young carers are losing their education maintenance allowance. Carers are now unable to afford a break or holiday. It is shameful that a carer should have to take a part-time cleaning job and put her husband to bed at 4 pm.
That is not a record of which the coalition Government can be proud, and it is so early in this Parliament. I hope that carers week gives Ministers time to rethink the impact of the cuts that they are making.
Thank you, Mr Streeter. It is a pleasure to serve under your chairmanship this afternoon. First and most importantly, I congratulate the hon. Member for Edinburgh East (Sheila Gilmore) on securing this debate. It is the most timely debate that we could imagine, given that this is carers week. The hon. Members for Stretford and Urmston (Kate Green) and for South Thanet (Laura Sandys) and I were asked by Carers UK to act this week as carers’ ambassadors in our constituencies and elsewhere to promote some of Carers UK’s key messages.
On the true face of carers, the reality is that there are so many different faces, stories and anecdotes. As we have heard, there are 175,000 young carers. There are carers in work or grappling with the prospect of staying in work while managing their caring responsibilities—I will say a little about that in a moment—as well as elderly carers. We receive many different stories in our e-mails and postbags every week.
Let us celebrate carers week. It is about celebrating the invaluable work that carers do and showing our appreciation of those who give up their time, sometimes at a cost to their own health and financial well-being. That message has come loud and clear from many Members in this debate, and I echo it. I will focus my remarks on some of the personal experiences that constituents relay to us.
We as a society unquestionably rely on carers to provide a service, and there are clear benefits to people caring for their loved ones: not only do they make them more comfortable, but they reduce pressures on health and social services. I was privileged this week to launch a carers week event in my constituency. It involved the book “Dywedwch ‘’Dwi’n iawn’…a’i Olygu”—the hon. Member for Newport East (Jessica Morden) might be able to understand that—or “Say ‘I’m Fine’…and Mean It”. It is a good book that promotes some of the services available in my constituency and more widely. It was produced by Ceredigion council and a local project called Mind Your Heart to give carers advice on maintaining their physical and mental health. It is an excellent project. I agree with the hon. Member for Banbury (Tony Baldry) that the voluntary sector has done and is doing much, although that is being impinged on by the scale of the decisions made here and, in the context of my constituency, in the Welsh Assembly.
The outcome of a Wales-wide survey of carers—we heard the UK figures from the hon. Member for Worsley and Eccles South (Barbara Keeley)—revealed the extent of their concern and worry. As many as 71% of carers have suffered health problems as a result of caring, 64% have had to give up their career ambitions and aspirations since taking on their caring roles and 63% of carers were surprised at how hard it is to be a carer. Sometimes, at comparatively short notice—even very short notice, such as after a car accident—carers suddenly discover that they must undertake a life-changing role. Some 43% of carers have a disability, condition or illness themselves. I met an 88-year-old constituent on Sunday evening who had cared for his wife, also in her 80s, for many years. Carers week is an opportunity to highlight such issues and concerns, given the inevitable decisions on the deficit that the Government must take.
The title of this debate, commendably, refers to the effect of spending reductions on families. I will address that, but it is important to recognise that some decisions and prospective decisions made by Government could be good news for carers. However, there is a great deal of work to be done. The Government are embarked on a consultation on proposals to extend the right to request flexible working. I introduced a ten-minute rule Bill earlier this year to extend the definition of carers within current flexible working regulations and provide for so-called day one rights, allowing carers to request flexible working from when they start a job, rather than after waiting six months. I launched a lottery-funded project in my constituency with Crossroads Care and various local chambers to assist carers and boost their confidence in returning to the labour market where their circumstances permit it. The challenge of finding the confidence to return to the labour market after caring should not be understated.
We have had good news that the Government plan to introduce a right for all workers to request flexible working, which is to be welcomed as a big step forward. The Government have recognised that many successful modem businesses acknowledge the importance of respecting that their staff will have other responsibilities and that the best way to ensure that they remain motivated and reach their potential is to give them the flexibility that they need. It is a big issue. More than 150,000 people in Wales who are in paid employment have unpaid caring responsibilities. However, the Government have been less forthcoming on day one rights. There is a perception that it is somehow unfair for people who have just been appointed to a job to request flexible working. I contend that people should have the right to request flexible working at the outset. Many of us share the view that if carers wish to work, they should be given as much support as possible, but there is a barrier.
I have one minute, so I will rattle through my next points. I agree with colleagues about the concerns expressed by the hon. Member for Banbury, and consistently by Labour Members, on the arrangements for carer’s allowance, changes to disability living allowance and the uncertainty involved. As the hon. Member for Edinburgh East said, clarity is lacking on those matters. I also agree with the principle that if we embark on major changes, there must be a process for monitoring, evaluating and reporting back on them. Work on the awareness of benefits is fundamental as well.
To return to my original point, a quote from a carer in my constituency illustrates why carers week is so important in highlighting cases. A lady in my constituency who will remain anonymous cares for her disabled son. She says:
“I note the activities locally for carers week in Ceredigion, in which you are involved. I cannot attend such activities, as I am trapped at home looking after my son. When I do have time without him (when he is at school) I am at work trying to retrieve our family’s financial affairs from the effects of my son’s disability and trying to keep some semblance of a life for myself apart from my son. Disabled people and their carers are very often voiceless for these reasons. This sounds dramatic, but it is a very small divide between coping and not coping. And the implications of not coping are horrific.”
That is why this debate is important, why carers week is important and why it is crucial for all of us to continue to press the case for carers’ rights.
It is a pleasure to serve under your chairmanship, Mr Streeter, for the first time in a Westminster Hall debate. I echo the tributes to my hon. Friend the Member for Edinburgh East (Sheila Gilmore), whom I congratulate on securing this important debate on the effects of spending reductions on families with caring responsibilities, not least because of the important changes being made in the House of Commons in the Welfare Reform Bill.
I want to confine my remarks to a couple of issues, because of the shortage of time. A survey of more than 2,000 carers was recently carried out for carers week. It shows that 80% of unpaid carers are worried about cuts to services and that about 50% are unsure how they will be able to cope without the vital support that they currently receive. For the record and for anyone who is not involved directly as a carer, it is worth stating that three out of every five people will be an unpaid carer at some point during their lives. To respond to the point made by the hon. Member for Banbury (Tony Baldry), those unpaid carers save the economy a huge sum. It is difficult to quantify it, but it may be more than the total NHS budget—£103 billion each year.
We have done some research in County Durham. I am proud to speak up for the vulnerable, the disabled and for carers. My county alone has 61,000 carers and the estimated moneys saved to the public purse by the very important work that these unpaid carers carry out are £1 billion a year. We should not be dismissive of their needs and requirements. Each carer who works for nothing saves the Government, the taxpayer and the Exchequer the cost of a care worker, which is about £18,000 a year.
My own constituency of Easington is characterised by long-term ill health. As the hon. Member for East Londonderry (Mr Campbell) has mentioned, many carers, particularly in my area, are themselves victims of ill health. That was highlighted by a recent report by Carers UK. The legacy of coal mining and heavy industry has left many thousands of people debilitated in later life by long-term disabilities and in need of care, which is often provided not by the state, but by close family members.
I shall speak briefly about a number of issues. In particular, I want to draw Members’ attention towards, and place on the record, the effects being felt by some of my constituents as a result of the transport costs they now face due to local government cuts, and towards respite care, which has been mentioned. I also want to ask the Minister a couple of questions—I hope that she will answer them—about carer’s allowance and the provisions in the Welfare Reform Bill.
A constituent who came to see me recently is a full-time carer for her husband. She has one day a week of respite care. Her husband attends a day-care centre in Grampian House, in Peterlee in my constituency, once a week for four and a half hours. That is the only break she has. It is an excellent facility and I pay tribute to its care staff. I have visited it myself and a close relative of mine is in there. They do tremendous work in terms of physiotherapy and rehabilitation. However, from September, due to the front-loading of cuts of £67 million this year to my local authority of Durham county council, transport to the centre will be cut. It will cost my constituent £72 for specialist transport, which means that she will not be able to take her break and take advantage of the respite care.
The issue of transport has been raised by many of my constituents. They understand that cuts to social care by local authorities are due almost entirely to the swingeing, front-loaded cuts that the Government have imposed. Councils are struggling to cope with massive funding reductions from central Government.
People are also aware of the impact that the Government’s £18 billion package of cuts to the benefits system will have on carers in particular. The Government accuse Labour of rejecting welfare reform, but I am proud to say that we stand firm on the principle that the most vulnerable should not be paying that £18 billion when some of the richest in society—most notably, the bankers and the banking sector—contribute only between £2 billion and £5 billion to the cost of the deficit.
I shall conclude my remarks, because time is short. Another big issue that has been raised is that of ring-fencing moneys for social services, with a distinctive sum identified for carers’ services—the carer’s grant. Although it was not ring-fenced under the previous Government, councils at least knew how much money they were receiving for that purpose. The Minister has responsibility for public health and I would like to congratulate my own soon-to-disappear primary care trust, County Durham PCT, on clearly ring-fencing, identifying and spending its allocation from the Department of Health on the provision of respite care for people with disabilities and their carers.
How will the Government fulfil their pledges to improve the support for carers in the face of massive cuts to local government? How will the Government ensure that the proposed reforms, outlined in the Welfare Reform Bill, do not result in carers losing their carer’s allowance? The Government could give two promises that would give confidence to those who are most vulnerable and most in need. First, budget cuts should not result in carers losing the services that they rely on. Secondly, carers should not lose out under changes to the benefits system.
Thank you, Mr Streeter, for the opportunity to contribute to this vital debate, and I congratulate my hon. Friend the Member for Edinburgh East (Sheila Gilmore) on securing it. I will not rehearse the arguments that we have already heard, because time is short.
As a carer for my 86-year-old father, who was born deaf, I have a deep personal understanding of the issues and challenges that many carers face. I am deeply concerned that the decisions taken by this Government will massively compound the financial and emotional pressures that carers face. Others have discussed the national policy changes, but I would like to talk quickly about issues that affect my constituents.
Both of the two cases that I wish to address relate to services provided by Lancashire county council as the social care provider in my constituency. The Derby day centre is a fantastic facility in Ormskirk. The staff are committed to providing high-quality care and support to people who use the centre. It offers a wide range of facilities to meet the needs of the individual, whether they have dementia or a physical disability. I have visited the centre many times and I am always impressed by it.
In a shock move, however, Lancashire county council has announced that it is increasing the daily cost from £5 a day to £30.75. That is not a small increase, but an increase of nearly 500%. I wonder how that fits with the mantra of not affecting front-line services. The council says that, this year, it will not charge users more than £30 a week extra. However, next year that will also increase so that people will not pay more than £60 extra. It is clear that, before long, anyone attending or wanting to attend the centre will have to pay the full cost of using it. Today, my office received a call from a centre user’s family who were angered by the scale of the increases. For them, the cost will rise from £40 a month to £160 a month for two days a week at the centre. That is just one issue in Ormskirk. There are many cases in which the elderly or disabled are being impacted by Lancashire county council decisions. The dial-a-ride service, for example, has been almost decimated. Some families will grumble about the cost but will be able to pay. Others will not be able to meet the costs and the council will help. However, a great number of families in the middle will be sitting at home wondering whether, financially, they can afford to continue to use the centre and, conversely, whether, emotionally, they can afford not to.
The second case is a group of mums who told me of their concern about funding for Aiming Higher for Disabled Children. That programme finished at the end of March and since then no short breaks or activities have been available for families, even for a day or a few short hours. The county council has said that it will consult parents on how the scheme will work but, in the meantime, there are no services—zilch, nothing. No support is being offered whatsoever, and that is a huge burden. I understand that the summer holidays are coming up and that interim arrangements will be made, but that still does not address the proper concerns that exist. In 2010-11, the funding for Aiming Higher was £4 million. Officers are now telling us that only £3.5 million will be available for two years. That is a reduction of a half. Does the county council believe that half the need for the scheme will evaporate while it is considering its budget cuts, or is it dumping the care, responsibility and the cost of children with disabilities back on to hard-pressed parents?
I will end my remarks because I have to cut them short. I am really, really sad that when the local newspaper asked me about the matter, I said, “Well, this is now the typical Conservative attitude. They know the price of everything and the value of nothing.” I find it gut-wrenching that the elderly and the most vulnerable will have to live with the consequences of the Government’s decisions. We keep hearing that we are all in this together. Families with caring responsibilities in West Lancashire are now realising that some people are in this more than others. How can the Minister justify this, and look carers and their families in the face?
It is a pleasure to serve under your chairmanship, Mr Streeter. The debate could clearly have gone on for twice or perhaps three times as long. A feature of it has been the number of people who wanted to speak and have not been able to. My hon. Friend the Member for Newport East (Jessica Morden) wanted to speak, as did my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). My hon. Friend the Member for Glasgow Central (Anas Sarwar) had also prepared something, and my right hon. Friend the Member for Croydon North (Malcolm Wicks) had told me that he wanted to make a contribution. The fact that many people have shown an interest in the matter demonstrates its huge importance.
I congratulate my hon. Friend the Member for Edinburgh East (Sheila Gilmore) on securing the debate. It is very easy to come out with a number of platitudes about carers, but carers want to hear what we will do to help them. Carers probably save this country more in money than is spent on the national health service. By 2017, it is likely that the UK will reach a tipping point, as the number of older people needing care will exceed the number of people of working age with families. There will be a crisis and we need to ensure that we are up to dealing with it. We must be able to support those people on whom we rely entirely. As has been said, if anyone is demonstrating the Prime Minister’s big society, it is carers up and down the country, so we need to look after them.
Where is the good news? There is some good news, which has come from the Law Commission. It has published a report that has largely received broad support from social care groups. A number of proposals are well thought out and will be well received, for example, rather than the carer needing to request an assessment, the local authority will have a duty to provide one. In addition, those assessments should be made for people who provide some care, rather than being restricted to those providing substantial care. Both those proposals are sensible. The third proposal is to ensure that a national system of eligibility assessments will provide some consistency across the country and allow people to move from one local authority to another without there being a huge time lag, which causes great distress to families. That will allow some portability of care.
The Under-Secretary’s brother Minister who is responsible for care, the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow), has so far welcomed the Law Commission’s report. In his pre-coalition past, he expressed support for many of the ideas it recommends. However, many of the issues will not come within the Department of Health’s ambit, but within that of the Department for Communities and Local Government. Given that the Secretary of State for Communities and Local Government has indicated that he wants to conduct a review of local authority duties, there is some concern that he may be resistant to a new duty being put on local authorities to ensure that carers are assessed as well as the person needing care. I hope that that is not the case and that people are speaking strongly in his ear, so that the Law Commission’s recommendations can be implemented in full because they are to carers’ advantage.
The other piece of good news may be the Dilnot inquiry. I met Mr Dilnot again today. He is very generous with his time and is meeting a broad range of people. The meeting he had with me and my right hon. Friend the Member for Wentworth and Dearne (John Healey) was the first of eight meetings that he is holding today. Of course, we all agree that we need to make fundamental changes, that the status quo will not do and that we must have a fundamentally reformed care system. The Opposition believe that there should be high-quality care for those who need it and that care needs to be funded in a fair way, with proper accountability for those who deliver it.
We repeat the Leader of the Opposition’s invitation, which was made on Tuesday 7 June. We welcome cross-party talks and we would like them to happen as soon as possible. We will come with an open mind because we want to be able to work together for the best way forward. I understand that the Prime Minister has welcomed that approach, but we still have an empty diary and we want to be able to get on with it. If the failures of the past are repeated, we will not be forgiven by those who use the care system or their families. It is important to remember that, even with co-operation and a fair wind, we are unlikely to see any of Dilnot’s suggestions implemented until 2014-15. The current problem for carers is what is happening now to the social care system and their support .
I am afraid that that takes me to the end of the good news and into the bad news. As has been said very eloquently by my hon. Friends, social care cuts are clearly having a fundamental impact on the lives of carers. I was going to congratulate the Minister of State, Department of Health, the hon. Member for Sutton and Cheam on finally taking his fingers out of his ears, stopping singing, “La la la la la,” and accepting that the cuts to social care will affect front-line services. That is inevitable; there is no other option. Given that social care is top-tier councils’ biggest area of discretionary spending, we simply cannot have 27% cuts to local authorities without there being cuts to social care. It just does not work. Unfortunately, the Government have ignored the advice of the Association of Directors of Adult Social Services and the Local Government Group, who know what they are talking about.
Although no centralised assessment of the impact of the cuts to local government on social care was carried out, several people have done the Government’s job for them. A wealth of evidence has been provided by ADASS, the BBC and my own survey. As has been mentioned, my survey of the directors of social care received 61 replies from councils and shows some very worrying results. I am pleased that the Minister of State, has complimented my survey as being robust, accurate and, indeed, more reliable than that done by the BBC. However, he needs to look at the impact of it and what it means. We will do the survey again next year and the year after, and I am afraid that we will not get good news.
ADASS has shown this year that the shortfall to adult social care spending is £1 billion. The Government have done their best not to affect adult social care, but next year they have to cut again and the year after they have to cut yet again. If things are bad now, as has been so eloquently reported by my hon. Friends, where are we going? Do the Government have any idea of the impact of these cuts on carers? This has already been asked, but I repeat: how many of those who no longer meet councils’ very narrow eligibility criteria will need to rely on the informal care provided by their families? Do the Government know how many carers will have to go without support from their local authorities and will, as a result, be forced to give up work to meet their new obligations?
I was particularly pleased to hear what the hon. Member for Banbury (Tony Baldry) said about respite care—I support him in that. The Government are right—our Government was right—to ensure that money is put aside for respite care. The difficulty is that the mechanics do not work. Primary care trusts have been given that money. It is not ring-fenced. It is not clearly labelled. There is no accountability. The Department of Health is very unclear about which PCTs have spent it, in what way, how much they have worked with local authorities, or how much they have worked with carers—there is no overall picture. Frankly, is that not the sort of thing that the Government should do? It is not just a question of handing out the money. Surely there needs to be some form of accountability.
The Princess Royal Trust for Carers has been doing its best to conduct an audit of that, just as I am doing an audit of local authorities and the impact of the cuts on social care, but surely that should be a job for Government. Surely the Princess Royal Trust for Carers has things to do other than conduct an audit of whether the money given by the Department of Health to PCTs for respite care for carers is actually being spent on carers. That is part of the knock-on effect of the chaos that has been created through the proposed partial abolition of PCTs in the Health and Social Care Bill. What action will the Government take if PCTs do not work with local authorities and carers of organisations to publish plans and budgets?
The other piece of bad news, which has been mentioned, is welfare reform. We welcome the Government’s announcement that carer’s allowance will be outside universal credit. We also welcome the news that disability living allowance will be excluded from the overall benefit cap. However, the bad news is that, when the Government talked about introducing personal independence payments, they said that there would be a 20% cut to DLA. It is not just a 20% cut to DLA. Those people will not be springing from their beds, suddenly well. People with dependants will still be there. Not only will they, but their carers will lose their money, because carer’s allowance will be attached to DLA. There will, therefore, be a huge impact on the families of those people who are losing their DLA. Do the Government have any idea of how many carers will lose out as a result of moving DLA to the personal independence payment and the 20% cut? Are the Government aware that carer’s allowance is not excluded from the proposed benefit cap, while DLA is? I am sure that the Minister would agree that that is, at the very least, not consistent, let alone fair.
May I just come back to this last point? It is shocking that, at a time like this, carers suffer in the way that they do. It is a question of priorities and hard choices. As my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) so eloquently put it, it is not right that a woman has to put her husband to bed at 4 o’clock in order to do a part-time cleaning job to pull things together. It makes “We are all in it together” hollow rhetoric.
It is a pleasure to serve under your chairmanship, Mr Streeter. Time is very short. I have about seven minutes, so I say up front that I will ensure that hon. Members receive a note to answer the questions that I will not be able to address. As the hon. Member for Edinburgh East (Sheila Gilmore) knows, this is an important debate. Like her, I would like to feel that this is about more than just press releases this week. Indeed, we praise carers this week. We should praise them every single week and every single day—those we know about and those we do not.
As the hon. Lady knows, in her constituency the Scottish Government have overall responsibility for devolved budgets and I am sure that she will therefore take up some of the issues with them. I note the cautionary tale about ring-fencing—mentioned by a few other hon. Members—and also tracking funding. Local authorities, however, have a duty to provide community care to those who meet eligibility criteria. The Department has set out an eligibility framework, which is important to bear in mind.
Who cares for the carers? Somebody first said that to me a very long time ago—in fact, when I was a district nurse. Those with caring responsibilities need care themselves, so that they can maintain their own health and well-being. Although it has not been mentioned today, the figures on the physical, mental and emotional health of carers are shocking.
Care and support services from both the statutory and voluntary sectors face challenges, irrespective of funding, like never before. Demographic changes mean that most of us will either become carers or need care. Some of us already care for children with disabilities and are often lifetime carers. Others care for partners as they grow older; some for ageing parents, neighbours or friends. Carers come in all shapes and sizes, and with different needs. It is important, when government at any level tries to meet the needs of carers, to recognise that they need specialist and personalised help, which is why personalised budgets are an important step.
I will run through some of the money that is coming through, so that hon. Members can raise, with their local authorities, what is happening to it. The spending review allocated an additional £2 billion by 2014-15 to support the delivery of social care. Some of that funding is already getting through. Some £162 million went in during January, which was money transferred from NHS budgets to support care services that improve people’s health and support carers. A further £648 million will pass to local government in England in the same way. A further £1.3 billion is now supporting the transfer of funding and the commissioning of learning disabilities services from PCTs to local councils, which will help. One hon. Member raised the issue of integrating services. That is very important. It applies to several Departments, and it is also true at local authority level.
Taken together, that is the biggest ever transfer of hard cash from health to social care. That is an important development and comes on top of the £530 million for social care this year from the Department of Health, which we rolled up into the Government grant formula. The Department for Education is providing more than £800 million in the next four years for short breaks—they are absolutely critical; respite breaks are a lifeline to parents of children with disabilities—as part of the new early intervention grant.
We recognise that the current funding system needs overhauling. We cannot avoid the wider challenges that demography brings us. My hon. Friend the Member for Banbury (Tony Baldry) was 100% right about how the money is spent, and the hon. Member for Edinburgh East also mentioned monitoring. It is extremely important that we identify carers early, so that we can meet their needs early and they can continue to do what, essentially, they want to do, which is to care for those who live with them.
The Dilnot commission will report in July and will help us find new ways to modernise the funding of social care and ensure that it is more in line with the demands and expectations of the 21st century. The carers strategy, which we published in November 2010, sets out our priorities. Those priorities are important because we measure what central Government and local authorities do against them. They are: to support those with caring responsibilities to identify themselves as carers at an early stage, and involve them in designing local care provision and planning individual care packages; to enable those with caring responsibilities to fulfil their educational and employment potential, which is absolutely critical as young carers do not necessarily get to any step on any ladder as far as education and employment are concerned; to personalise support for carers, which is critical, and to support carers to maintain physical and mental wellness, because the physical burden of providing care for a friend or family member can be significant. Ideally, carers who are identified at an early stage can get the help that they need.
My hon. Friend the Member for Banbury mentioned the work that Sainsbury’s is doing. We should congratulate it. Of course, it is not a substitute for other things, but it is an important addition. Tomorrow morning, the Minister with responsibility for care services will launch a new e-learning tool for all GPs, developed in partnership with the Royal College of General Practitioners and the Princess Royal Trust for Carers. That will be an important tool in enabling GPs to do what we need them to do. The Department of Health has made a further £1.5 million funding available for other initiatives to support GPs to help carers further. Alongside the carers strategy, we published examples of how the principles of personalisation have been applied locally, emphasising the value of finding ways forward that make sense and work best locally.
I have to say to Opposition Members that the country is financially where it is because that is where we found it when we took over from the previous Government. The hon. Member for West Lancashire (Rosie Cooper) shakes her head. We cannot get away from the fact that we inherited a massive budget deficit that we are now having to tackle. Opposition Members look as if they are in denial. The hon. Lady, who is a sensible person, asked how we could look carers in the face, but how can members of the previous Government look carers in the face? We have been left with some difficult decisions. We have to ensure that every £1 of taxpayers’ money actually buys £1-worth of care, to support carers in the ways in which they need it.
Eyesight Tests (Drivers)
I am delighted to have secured a debate on eyesight regulations for drivers, especially as we are in the middle of national eye health week. As I speak, an event to mark the week is taking place in Parliament, and in my home city of Sheffield a wide range of organisations is holding an awareness day in the city centre. South Yorkshire police, in conjunction with the Sheffield Royal Society for the Blind, are focusing on the issue that brings me here today: the importance of good sight for driving and, in particular, drivers who do not realise that their sight is deteriorating.
I have been engaged on the subject for some time. I was contacted by my constituent Joy Barnes, whose niece tragically died in a road accident caused by a driver whose eyesight was not up to the necessary standard. Joy’s niece, Fiona Buckley, was just 43 when she died. She was born with spina bifida and hydrocephalus, so spent much of her adult life in a wheelchair. Fiona worked in the city centre Shopmobility service and in the Royal Hallamshire hospital as a welcomer. A bubbly person, she enjoyed a lively social life and, in her younger days, was an accomplished swimmer, later becoming an avid photographer and Scrabble player. Her family describe Fiona as a generous and courageous spirit.
At 10 pm on 6 December 2008, Fiona was crossing the road, with her friend Kay Pilley walking just behind. Witnesses said that the car approaching did not attempt to overtake or brake, but ran straight into them, and Fiona was thrown over the vehicle. She suffered a major head injury and her pelvis, spine and leg were broken. Six weeks later, she died in hospital from multiple organ failure. Kay suffered head and knee injuries and was treated at hospital; she could not remember what had happened.
Police officers subsequently tested the 87-year-old driver’s eyesight, and found that he could not read a car number plate from the required distance of 20.5 metres. He was later found to have cataracts in both eyes, which had probably been there for some 18 months. A doctor said it would give him “foggy or hazy” sight that could have rendered Fiona almost invisible to him. He also suffered from age-related macular degeneration, which blurs the central vision. With his right eye, he could see only from 6 metres what people with good vision can read from 24 metres. The driver admitted causing death by careless driving, but the judge decided not to punish him for killing Fiona. The driver was given only three penalty points. Fiona’s aunt, Joy Barnes, speaking on behalf of her wider family said:
“Fiona’s death hit us all hard. The driver should not have been on the roads with such poor eyesight and it is a travesty that nothing is done to make sure that drivers meet a minimum standard of sight. If this driver had been made to have a sight test to keep his licence then Fiona would still be with us.”
During the current driving test, the examiner gives the driver three chances to read a number plate, from 20 metres for vehicles displaying the new-style plate or 20.5 metres for old-style plates. Following that, the drivers of cars, small vans and motorbikes need not take any form of eye test for the rest of their life, unless they voluntarily report that they have a serious vision impairment to the Driver and Vehicle Licensing Agency. Once drivers have reached the age of 70, in order to renew their licence they are asked to confirm that they have acceptable vision, but they are not required to prove it.
The Department for Transport has been consulting on the medical standards that should apply to eyesight tests for safe driving. Astonishingly, the Department is proposing that the testing distance should be reduced from 20.5 metres to 17.5 metres. The Sheffield Royal Society for the Blind is extremely concerned that any relaxation in the requirements could be detrimental to road safety. Can the Minister give me details of the evidence that was considered before reaching that proposal? What is her evidence to suggest that such a test is adequate in any way?
The current eyesight test is simply no longer fit for purpose. In contrast with the tragic death of Fiona Buckley, it is not possible to attribute many road accidents directly to poor eyesight. Eyesight is often only one of the factors that might be involved; others include the time of day, the weather, the condition of the road and tiredness. However, it is common sense that poor vision will impair any driver’s performance, even taking into account all other conditions.
The distance number plate test has been in place since the 1930s and is outdated. It has remained unchanged, despite increased numbers of vehicles on the road and developments in road safety standards and clinical technology. It is not scientifically based and does not reflect modern day knowledge of vision. The number plate test also only measures visual acuity—put simply, the ability to see at a distance. It does not produce consistent results and can be affected by environmental conditions. Drivers can fail the test in different lighting or weather conditions. Several scientific publications have questioned the accuracy and reliability of the number plate test as a method of screening visual acuity. Also, it does not test visual field—put simply again, the ability to see around while looking straight ahead. Visual field loss can advance significantly without a person becoming aware of a problem. For instance, glaucoma is a condition that someone can have and yet pass a number plate test with insufficient field vision.
The current system also requires self-reporting and therefore relies on individual drivers being aware of the required standard, realising that they do not meet it and knowing that not notifying the DVLA of any problem is a criminal offence. However, many drivers do not notice what can be a gradual change in their vision, remaining unaware that they fall below the required legal eyesight standard.
I can suggest one method of checking everyone’s eyesight, including mine. I register an interest as a diabetic—type 2 of course, controlled by diet. If people visit an optician every year, the optician tells them about their eyesight. Might that be a method whereby people can check if their eyesight is deteriorating?
The hon. Gentleman makes an interesting point about what could be done if the current system, which puts the onus on the driver, continues. I will argue, for good reasons, that an eye test should be a requirement.
Many people with glaucoma do not have any symptoms until the condition is quite advanced. The National Institute for Health and Clinical Excellence guidance advises that once vision loss becomes apparent, up to 90% of optic nerve fibres might already have been damaged. The general manager of Sheffield Royal Society for the Blind, Steve Hambleton, said:
“when people are diagnosed with an eye condition that impacts upon their ability to drive safely, the onus is on the driver to notify DVLA. We encounter too many people who do not do this and continue to drive. In these days of data protection etc., it is extremely difficult if not impossible for organisations such as ours to advise DVLA of our concerns.”
Last month, I attended the launch of the UN decade of road safety, which was addressed by the Secretary of State for Transport. The UK has a proud record: Great Britain had the fourth fewest road deaths per million people, we have been in the top five performing countries throughout the past decade and we were in first place in 2009. Yet on eyesight testing, we are lagging behind many countries and many of our neighbours in the European Union. The EU has recently published directives to standardise driving licences and to harmonise European standards. The UK lags behind best performance of most other European countries in assessing drivers’ vision. A report released only this week outlines that a majority of EU member states assess visual acuity and visual fields in advance of issuing a first full driving licence. The UK is among the minority that requires no further assessment of vision throughout a driving career.
The 2006 and 2009 EU driving licence directives continue a long path to harmonise driving licences with the overall aim of improving road safety and facilitating enforcement throughout EU countries. Is the Minister really content to see our otherwise excellent record on road safety lag far behind the best practice of our near neighbours? Given that the EU directive recommends a visual field of at least 120 degrees, how can the number plate test be sufficient to comply?
The only way to make sure that drivers continue to have adequate vision is to make eyesight testing mandatory at regular intervals throughout the time they hold a licence. Drivers should have to provide regular proof that they have had their eyes tested by a medical professional and that they meet minimum standards for visual acuity and visual field. That should happen at least every 10 years, coinciding with drivers renewing their photo driving licence. That would be a simple and inexpensive step that would vastly improve the eyesight of drivers throughout the UK. I also recommend that when drivers reach the age of 70 and have to self-certify that they are fit to drive, they should be required to submit evidence from an appropriate professional that they have a safe and legal level of eyesight.
The present inadequacies must be addressed. That view is supported by the Optical Confederation, which represents 12,000 optometrists, and the 6,000 dispensing opticians and 7,000 optical businesses in the UK. Those organisations and many others concerned with road safety have submitted their concerns to the Department for Transport's consultation. Will the Minister report on the outcome of the consultation, and when will the Government respond to it?
Having good eyesight is one of the most basic requirements for safe driving. It is widely recognised that 90% of sensory information when driving comes from vision, which underlines the importance of always driving with good eyesight. Being an experienced and skilled driver who is aware of the dangers of the roads is simply meaningless if one is unable to spot hazards in time. Research shows that one in six drivers cannot see well enough to pass a very basic eyesight test. People who are reluctant to give up their driving licence cannot be relied on to inform the authorities if they have eyesight problems.
Making the changes that I suggest would have public support. In vox pop interviews this morning, my local radio station, Radio Sheffield, spoke to five people—only a few, but four of the five thought that those changes were sensible and saw no problem with them. BRAKE, the road safety charity, released a survey, which no doubt involved a few more people than the five in Sheffield, showing that 75% of drivers support compulsory eyesight testing for drivers every five years.
Continuing with a system of drivers self-reporting any problems that they may have is not the answer. Poor driver eyesight kills, and every death is devastating to the people involved. The Government should act on the professional advice, which commands support among drivers, and change the driving test to ensure that all drivers can see what lies ahead of them while on the road.
It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate the hon. Member for Sheffield, Heeley (Meg Munn) on securing this debate, on her speech today, and on her long-standing work on this important issue. It is a welcome opportunity to highlight the crucial point that those with defective eyesight that does not meet the required standards should not drive on our roads.
I want to put on record my sincere condolences for the hon. Lady’s constituent, Joy Barnes, on the tragic death of her niece, Fiona Buckley, in the incident that the hon. Lady described. The case was tragic, and I offer my sympathies to Fiona’s family and friends for their loss.
In responding to the issues raised by the hon. Lady, it may help if I reiterate and clarify the current arrangements for renewing the entitlement to drive. Most drivers do not need to renew that entitlement until the age of 70. They must then renew every three years for as long as they remain fit to drive. Someone at the age of 70 could be fitter, more alert and more active than some individuals who are younger, which is why licensing decisions are based on health rather than age. Although age is not always a reliable indicator of an individual’s physical and mental health, it is widely accepted that health can deteriorate in old age in ways that may affect the ability to drive safely.
When renewing their entitlement to drive, drivers must, as the hon. Lady said, complete a self-declaration affirming their ability to read a number plate from 20 metres away. They must also confirm that they do not have any medical condition that affects their ability to drive safely. That allows attention to be focused on those individuals who declare that they have a medical condition, those who have been found to have one, and those who need some sort of investigation to determine whether they can retain their licence to drive. Those detailed investigations into medical fitness to drive may include the collection of information from the driver and their doctor, a physical examination or a driving assessment.
The hon. Lady expressed concern about drivers who do not tell DVLA that they can no longer meet the level of fitness, including eyesight, needed for driving. One may speculate that that is because they worry about the impact of losing their licence, or because a medical condition makes them unaware of the implications of their failing health. That is why DVLA accepts notifications from third parties, and that is an important element of the enforcement process. Around 8,000 notifications of concern received from doctors, police and family members are investigated each year. Guidelines produced by the General Medical Council for doctors confirm that they are justified in telling DVLA about a patient who fails to stop driving following medical advice to do so. Similar guidelines have been produced by the College of Optometrists for its members.
DVLA forms and literature remind drivers of the ongoing requirement to meet the eyesight standard, and specifies that failure to meet the standard is an offence. Whenever DVLA contacts drivers, consideration is given to whether it is possible to highlight the continuing obligation to notify the DVLA of defective eyesight and appropriate medical conditions. We also seek to give information to drivers about the conditions that they must tell DVLA about relating to field of vision. That is an important part of the enforcement process. Directgov has an A-Z of medical conditions to help drivers to decide whether they need to tell DVLA of any aspect of their health. Detailed guidelines for doctors are also available to help them to advise their patients on medical notification requirements.
The Government’s view is that the current arrangements strike the right balance between road safety and personal mobility. There is not sufficient evidence to suggest that a more burdensome and costly regime would have a significantly positive effect on road safety. The majority of older people continue to drive safely, and to retain insight into their ability to do so.
I understand what the Minister is saying about conditions, and being able to look things up, which is fine if someone knows that they have a problem, or someone has suggested that their sight is deteriorating, for example, but much of the evidence is that people simply do not know. Providing information does not help them, and unless they have a test they may not know that they are suffering a problem.
As I said, whenever possible, the communications that DVLA sends to drivers refer to those conditions to alert them to the continuing need to ensure that they can pass the 20 metres test. One of the benefits of that test is that it is simple, and people can do it if they walk outside this building. We seek in those ways to alert people to the importance of doing that test regularly. On the whole, older people make sensible decisions about when and how they drive, and some older drivers voluntarily engage with local services to improve their driving skills and get independent advice.
The hon. Lady made a number of points about the effectiveness of the number plate test as a way of testing vision. As she said, the standard of vision required for safe driving requires someone to read a number plate at a distance of 20 metres. For people with visual field problems, other specific standards have to be met. All drivers are required by law to meet the appropriate eyesight standard at all times while driving. If they are unable to read a number plate, even if that is only because they failed to wear the appropriate prescribed glasses or lenses, they are committing an offence. Driving licence applicants must declare that they are able to read a number plate to obtain a licence. They will be asked to prove their ability to do that to their driving instructor during the practical driving test.
I assure the hon. Lady that we comply with EU directives on the visual field. The number plate test is not expected to test the visual field. A visual field problem is caused by an underlying medical condition, and those with such conditions are required by law to notify the DVLA, which has long-standing procedures in place to assess whether the minimum visual field requirements are met. Those requirements include referral to an optometrist for a specialist examination and report. The Government believe that the number plate test is an effective screening tool. Its use as a means of assessing whether a driver meets the required eyesight standard has been subject to departmental and Scientific Advisory Committee scrutiny, and it has stood the test of time.
The hon. Lady referred to a consultation document that was issued in relation to a possible revision of health standards for driving. That consultation looked at whether, instead of maintaining our current higher standard, the UK standard should be brought into line with the minimum required by the European Union. No decision has yet been made, but if it were proposed to align our standard with the minimum standard required by the EU, the distance over which someone is required to read a number plate would be reduced. Responses to the consultation are being analysed; some issues need further consideration and that is under way at the moment. It is important that any proposed changes are evaluated fully and that appropriate consideration is given to their potential impact. The points raised by the hon. Lady this afternoon will no doubt feed into the process of reaching an ultimate decision. Once an evaluation of the consultation responses is complete, the Government will take an informed decision on how to proceed and issue a formal response to the consultation.
In the meantime, there is much to be said in support of the current system. The number plate test is a simple and functional assessment of vision that can be easily carried out in the driving environment and reproduced regularly by an individual, as opposed to a periodic appointment with an optician. Although it is largely a test of visual acuity, to some extent it can test glare and contrast sensitivity. It provides a good indication that the licence holder meets—and continues to meet—the required visual acuity standards for driving. The test is easily reproduced at Driving Standards Agency test centres by examiners, and at the roadside by the police.
At a modest estimate of £20 per test, it would cost more than £20 million each year if an optician’s certificate or eyesight test were required by the 1 million motorists who apply for their first driving licence. If such a test were compulsory for each of the 2.5 million motorists who renew their driving licence each year because their photograph is 10 years old, it would cost more than £50 million a year.
The Minister is generous in giving way again. Given the cost of motoring, the figures she mentions are tiny amounts of money compared with what people spend on learning to drive. Does she understand how complacent she sounds, and how angry my constituent will be at her response? Given her inability to offer any comfort to my constituent, will the Minister take on board the need to do a great deal more to raise awareness of this issue?
I completely refute the allegation of complacency. The Government are very focused and place high priority on road safety. We are determined to continue the UK’s good record on road safety, but we believe that the current arrangements are an effective means of maintaining safety on our roads. We must take into account the costs of what the hon. Lady proposes. Household budgets are stretched at the moment and it is tough for people to add to those budgets commitments of this kind. If each of the 1.5 million motorists who renew their driving licence at the age of 70 were required to undergo such a test, that would cost a further £30 million each year—a significant sum of money. As all drivers over 70 are entitled to a free eyesight test, that additional burden and cost would fall on the Department of Health and the devolved Administrations. Added to that is the caution that, while an optician’s certificate, or equivalent, might provide assurance that someone has had their eyes tested, it would not guarantee that they could meet the current eyesight standard while driving, or that they used their prescribed glasses or corrective lenses. The optician’s test does not provide all the answers.
In conclusion, the Government are confident that current arrangements are effective and working well. The UK has one of the safest road networks in the world and I am afraid that we simply cannot justify the cost that indiscriminate, mandatory eyesight screening would impose on individuals, the Government and the devolved Administrations. Furthermore, there is little evidence to suggest that compulsory formal eyesight tests would have any marked positive effect on road safety.
The coalition Government take road safety seriously and are determined to maintain and improve the country’s long-standing and strong record. Any road death caused by defective vision is an avoidable and unnecessary tragedy, and all of us who use UK highways must take personal responsibility for ensuring that we have an appropriate level of vision for driving. I take the opportunity to place on the record how important it is that all drivers, regardless of age, do not simply wait for their next eye appointment, but check regularly that they can read a number plate from a distance of 20 metres. That simple test can alert individuals to a deterioration in their vision that they may not have noticed, and to the need to make an appointment to see their optician. The number plate test is saving lives on our roads. It is an effective test in which the Government continue to have confidence.
I do not think that our paths have crossed, Mr Streeter, but I am pleased to serve under your chairmanship and to face my colleague the Minister. This is a wonderful opportunity to highlight an important issue, and I hope that I do it justice.
A famous statistic alleges that Bradford once had more Rolls-Royces per head of population than anywhere else in the world. If that were ever true, I am sad to say that it must have been a long time ago. I remember being a young councillor during the recession of the 1980s—that really was a recession—and one council estate I represented had 70% male unemployment. Most of the unemployed men on that estate walked out of school in the ‘50s, ‘60s or even the ‘70s, and went straight into jobs. Sadly, when made redundant, many never worked again. Sadder still, their children went on to have children who have never worked.
Believe it or not, two thirds of the entire Bradford district is rural, and it is one of the most diverse areas in the country. It ranges from the prosperous Ilkley, where house prices are, surprisingly, at their highest ever level at present, to areas such as two wards in my constituency where, in some parts, 68% of children are categorised as living in poverty.
Bradford has gone from being one of the wealthiest cities in the world to being a city with deep economic and social problems. Over 30 years, Bradford has had millions of pounds of regeneration funding from every scheme that was on offer. The schemes were not without success, but the fundamental weakness of the economy has led to deep-rooted problems of poverty, high unemployment, low educational attainment, dire health outcomes in many areas, a decaying housing stock and, at times, as we know, frightening social tensions.
The housing problem stands out as one of the many consequences of economic failure in Bradford. I started this speech on housing by referring to the declining economic history of Bradford because, in addition to the contribution that housing policy can obviously make to meeting housing needs, it can make a contribution as a fundamental element of the regeneration of the community’s economy.
I must admit that there are many concerns about some of the proposals that the Government are considering. Those include changes to the shared room rate and paying the rent element of universal credit directly to tenants. That may have severe consequences: 80% of the tenants of the largest social landlord are on benefits. The changes include flexible tenancies, restricting housing benefit for tenants who are under-occupying and capping local housing allowance at the four-room rate. Many of those changes will potentially have adverse effects on people in Bradford. I will continue to campaign on those issues on other occasions. Today, in the limited time available, I want to focus on the most crucial aspect of housing policy—its contribution to economic regeneration.
The Government’s housing policy as it affects Bradford can at worst impair economic regeneration, or, if delivered with consideration of and adaptation to local circumstances, play an integral part in fulfilling the deep need for economic regeneration. I am sure that the Minister is well briefed and is well aware of the scale of the difficulties that we face. On current projections, Bradford’s population will increase by 150,000 in the next 20 years. To meet the projected growth, we need at least 2,700 homes each year. Currently, we are missing that target by a long way.
I commend the hon. Gentleman for bringing this debate to the House. As he knows, there are two proposals for big building developments in Micklethwaite and Menston, in my constituency, on beautiful, picturesque green fields. Does he agree that building houses on the outskirts of the district does nothing to alleviate the housing need in the centre of Bradford and that at a time when the council and all of us are trying to regenerate the centre of Bradford, it is rather counter-productive to build houses in that part of the district, the residents of which will shop in Leeds, regenerating Leeds even more, rather than Bradford?
That is a massive issue. I am sure that the hon. Gentleman is well aware of the fact that, as people progress up the housing chain, they move out of the inner-city areas. There is a long history of that happening in Bradford. The simple answer is that the housing must come from somewhere. We are missing the targets on new houses: at the peak of the housing boom in 2008, just over 2,000 houses were completed, but by last year the number had fallen to just 700.
Bradford’s low-wage economy and high unemployment in the areas where housing demand is strongest mean that about half the homes required will have to be in the social rented sector. There, the gap in delivery is even greater. Currently, fewer than 300 affordable homes are built each year—it is little wonder that there are 20,000 people on the social housing waiting list.
Added to the high demand for new homes is the fact that much of Bradford’s private sector accommodation is not fit for people to live in: 40% of Bradford’s private sector accommodation currently fails the Decent Homes standards; 10% is overcrowded; and across the district more than 7,000 properties stand empty and, often, derelict.
How could a national housing policy contribute to the economic regeneration of the Bradford district? Bradford has the youngest, fastest growing population outside London. That could be a great opportunity for Bradford’s economy, but only if there is somewhere for those people to live. Meeting the demand for new housing and stock improvement would provide much needed jobs in the construction industry. The Home Builders Federation has calculated that, for every £1 of public money spent on social housing, a further £3 of private sector investment is generated. Tackling poor-quality housing could change the image of Bradford. Our housing is critical to the way in which we are perceived as a district and to the confidence that investors require to put money into the district. In addition, improving basic housing conditions would remove many of the factors that contribute to the poor health and low educational attainment that perpetuate cycles of deprivation.
My concern is that the array of housing measures proposed by the Government will fail the test of delivering the quantity and quality of housing that we need to underpin the economic revival. Bradford’s ability to meet its targets for affordable housing will inevitably be hit by the halving of national capital funding. The Government’s much lauded affordable rent model is seen as a way forward in terms of replacing direct Government funding. We are told that it will generate 150,000 new affordable homes. It may well offer a viable replacement for lost grant funding in many parts of the country where market rents are high, but it is unlikely to be the answer in Bradford.
There is very little difference in Bradford between target rents and 80% of the market rent. I know that the Minister is aware of that. Taking into account the fact that the areas with the highest turnovers also have the lowest rents—of course, this measure will apply only to re-lets—Incommunities, the largest social housing provider in the district, which manages two thirds of the social housing, has projected that using affordable rents alone would generate for the whole of the Bradford district only an additional £120,000 a year. That would be almost but not quite enough to build two or three houses.
I am sure that the Minister will be keen to mention the new homes bonus—a key plank in the Government’s housing policy and one that in principle we have to support. The danger is that the policy simply gives more to those who already have, where land values are higher. Because of the distribution of funding being based on council tax bands rather than the grant formula of the Department for Communities and Local Government, which is based on levels of deprivation, Bradford will again lose out.
My fear is that funding will be skewed to areas with healthy housing markets at the expense of more deprived grant-dependent local authorities such as Bradford. Certain areas will gain additional homes because the affordable rents model will work, but on top of that, they will get the new homes bonus. I stress that the new homes bonus and the affordable rent model, as the two key policy levers for increasing housing supply, will not work sufficiently in areas such as Bradford and that broader consideration of other policy mechanisms is needed. It is not enough to say, “It cannot be expected to work everywhere.” We need measures that will work in a place such as Bradford.
It is not as if we are not trying as best we can with the limited resources available. The council has been attempting to tackle poor-quality housing through equity share and home appreciation loans, which in the long term would provide a small but self-sustaining pot of funding. However, the loss of the private sector renewal grant means that when the scheme comes to an end, there will be no provision to help vulnerable people to fund improvements to their properties.
The role of the private sector in realising economic benefits is crucial, and I am sure that the Minister welcomes the good cross-sector work that is going on through initiatives such as the Bradford Together procurement partnership, a public-private sector partnership that links construction contracts with the development of skills and jobs, which will benefit local communities. Over the last five years, Incommunities, the largest registered social landlord in the district, has built 400 homes, which has created jobs and provided 30 apprenticeship places. There are successes—they do exist—but they have to be set against the context of complex and large-scale housing needs.
What am I asking for? I seek a commitment from the Minister that he will speak in Bradford to those engaged in the challenge of increasing the quantity and improving the quality of housing in the district; they know far more about the subject than I ever will. I would welcome a response from the Minister about the possibility of the large surpluses generated in some parts of the country through the affordable rents model being redistributed to areas such as Bradford, that gain so little from the scheme. In a recent case, a registered provider, Affinity Sutton, considered investing in affordable housing in Bradford, using a surplus generated in the south, but it was unable to take that forward because the Homes and Communities Agency was unwilling to allow it to reallocate surpluses between regions.
The Minister may also like to say whether he believes that it would be sensible to take account of the difference in additional revenues generated through the affordable rents model, and to see whether they can be taken into account when calculating the allocation of grants through the HCA. Should not the remaining grants be targeted at those areas that have an acute need for affordable housing but are without the conditions required to benefit from the affordable rents premium?
I welcome the £100 million of additional funding to bring empty homes back into use—I have already mentioned the 7,000 empty properties in our district—but that amounts to only £338 per empty private home in the country. When considering the scale of the problem in places such as Bradford, I question the adequacy of the amount being made available. I ask that it be reconsidered. My plea is that the Government should resist the temptation to micro-manage and centrally control how the money is used—avoiding that is localism at its best. We have creative and innovative people working in the housing sector in Bradford, and I would welcome the Minister’s assurance that the Government will trust them to do what works best in our area.
The challenges that Bradford faces can at times appear daunting, but they are not insurmountable. Housing can be part of the solution to unlocking Bradford’s economic potential, but only if we get the policy levers right. Conversely, if we are not able to tackle housing effectively, Bradford’s problems will be compounded by the growing cost of homelessness, overcrowding and squalid conditions. As these problems escalate, households’ basic needs will not be met, and the search for a job will take a back seat for those affected as they try to deal with their living conditions.
If the Government are to be judged a success, they need to understand places such as Bradford when considering legislation. To take the time to understand places such as Bradford and to respond accordingly would be a much more critical test of the Government, and would be evidence of the extent to which they actually care about them. We await the outcome of that test with desperately keen interest.
It is a pleasure, Mr Streeter, to serve under your chairmanship. I am pleased to have the opportunity to have the opportunity to respond to my hon. Friend the Member for Bradford East (Mr Ward).
My hon. Friend said that he was a councillor as a young man; those in the Chamber can see that it can only have been a year or two ago. He has a long history of serving his constituents with great diligence as a member of the council and, since last year, as a Member of Parliament. He painted a clear if at times rather bleak picture of Bradford, and of the extremes of poverty and riches there and the problems for his constituents in respect of education, health and, as he rightly said, housing.
The Government certainly share my hon. Friend’s view that housing is an important component of building a growing economy. That is why we are continuing to invest in housing, through the Decent Homes programme, to bring social housing up to an acceptable standard, and through a new-build programme. We are not simply rolling forward the programmes that we inherited, although we are continuing with them, but developing a new programme using the affordable rent model. I hope that I can give my hon. Friend some comfort that the Government appreciate the problems that Bradford faces—and other places, too, but my hon. Friend highlights Bradford—at a time when, of necessity, the UK economy is in a period of stress.
My hon. Friend asked a number of specific questions. One is easier to answer than most. I think that he has invited me to speak in Bradford. I am happy to speak in Bradford—and, indeed, more or less wherever I am invited—and to say something about the Government’s policies.
That was a very proper correction, from a most diligent constituency MP. I would be even happier to go to Bradford to listen than to have to give any kind of response or speech. I am sure that we can come to a way of operating that provides both of us with what we need.
My hon. Friend asked whether the affordable rent model might work to Bradford’s benefit. I shall say something about that in a moment or two. He also put in a plea that the Government should not try to micro-manage how Bradford chooses to operate. I hope that he will take some comfort from the actions of the Government so far; in particular, I draw his attention to the fact that we have de-ring-fenced—a new phrase—many of the specific grants that were the bane of local government when budgeting and making policy. That gives Bradford far more flexibility to decide its priorities and how it should spend its money for the benefit of its citizens. Further measures will assist, under the local government resource review, details of which are likely to be published next month. I can promise to visit Bradford, and I can promise that there will be ever less micro-management, although we doubtless need to keep prudence thoroughly in mind.
The Government are committed to increasing housing supply across the country. We have an investment programme designed to achieve that—in fact, we will add 150,000 affordable and social homes during the life of this Parliament. Included in that is bringing back into use 5,000 extra empty homes, which I hope will be some consolation to my hon. Friend. However, I cannot guarantee that they will all be in Bradford. Clearly, we are also looking at ways in which we can bring empty homes back into use, stimulate action and promote good practice without necessarily requiring money to be spent either by us or by Bradford. We are investing in new homes and in getting empty homes back into action.
My hon. Friend mentioned the new homes bonus. Let me remind him that Bradford has benefited from the new homes bonus to the tune of £2.8 million this year, and that was without Bradford even trying. The figures that were used in allocating that money were simply based on the number of additional homes that became available in Bradford during last year, before the council or anybody else knew that that was how we were measuring things. In future years, there is the opportunity for Bradford and its partners to work harder and more diligently to bring empty homes into use, for which the new homes bonus is payable, and also to bring new homes into use.
The growth that my hon. Friend has reported for Bradford is part of a general growth across the whole country. More households are being formed each year. They are being formed at their highest level since the 1940s, and yet the number of homes being built is at its lowest level since the 1920s. The previous Government left the country in a position in which house building was at its lowest peacetime level since 1924. We inherited social housing waiting lists at record levels. There are currently 250,000 families living in overcrowded conditions. The reality is that the number of social homes in the country has gone down by a significant number. We have seen a reduction of more than 400,000 social homes available for rent since 1997. Of course that frustrates people. It frustrates my hon. Friend, and it certainly frustrates his constituents who are left on the waiting list. We have a clear intention to address that situation.
Let me pick up on my hon. Friend’s point about how our new policy of affordable rents might benefit Bradford. I want to make it clear to him and to the partners who deliver housing in Bradford that there is no ring-fence on funding from the conversion of re-lets to prevent money being generated in Sutton by Affinity Sutton and used to fund development and build in Bradford. It is true that the affordable homes framework document encourages partners to reinvest the capacity generated from affordable rent in the area from which it was generated, but that is all that it does. It encourages such practice; it does not place a ban on doing something else. My hon. Friend has it in mind that there was a scheme for Affinity Sutton to build 200 homes in Bradford, but because it offered us a reason for not going ahead with it, a rule was passed that prevented it transferring the benefits of affordable rent elsewhere to use the money to invest in Bradford. That is not the case. Perhaps we can discuss that separately. If he needs me to reinforce that point, I would be happy to join him in meeting the Homes and Communities Agency .
The affordable rent model allows the Government to build more social and affordable homes than they would have been able to do if they had kept in place the model that they inherited. That model required more than £80,000 of subsidy per home in order to produce a home for someone to occupy. The model that we have will require less than half that money per home. We are stretching the resources so that we can build the largest number of affordable homes possible. There is nothing in that model that prevents money being spent in Bradford to deliver the homes that my hon. Friend wants.
I have spent a long time dealing with some of those points, but I hope that my hon. Friend gets some sense that the Government take seriously the kind of situation that he has so eloquently outlined.
I also want to make it clear that among the other things that are available is the green deal, which will allow many homes, especially in the private sector but not exclusively so, to have investment to bring them up to a more acceptable standard and to make real inroads into fuel poverty for my hon. Friend’s poorest constituents. That plus the energy company obligation, the money that we are investing in empty homes and the other work that we are doing to make more efficient use of the social housing stock will, I hope, give my hon. Friend some comfort that we are making a good attempt to deal with the problems that he has identified.
My hon. Friend said that the test for this Government would be whether we took seriously the towns, the cities and the communities, such as his constituency in Bradford. I say to him that we are taking all parts of the country extremely seriously. That is reflected in the way in which we amended our grant-making formula at the start of this year to increase the amount of stress that we place on poverty and the way in which money should be distributed. It is why we introduced the transitional payments and why we have the regional growth fund. Areas such as Bradford could bid for RGF funds which could then be matched by European regional development funding.
My understanding is that Bradford did not submit a bid to the first round of regional growth fund applications. I do not know whether it has bid for the second round, but a route exists for investment to be made in Bradford, using the Government’s regional growth fund.
I look forward to my visit to Bradford and to listening to my hon. Friend’s constituents very carefully. I hope that I can reassure him that Bradford will be free to deliver as it sees fit with the money that it has available. I look forward to working with him over the next few years to make absolutely sure that at the end of this Parliament he has the satisfaction of knowing that he has improved Bradford with the help of the Government.
Sitting adjourned without Question put (Standing Order No. 10(11)).