House of Commons
Monday 31 October 2011
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Communities and Local Government
The Secretary of State was asked—
Fire and Rescue Services
1. What estimate he has made of the average change in funding for fire and rescue services between 2011 and 2013. (77094)
Driving down the nation’s deficit remains the Government’s principal priority, but we have protected fire and rescue services in the spending review by back-loading their reductions to 2013-14 and 2014-15. As a consequence, the revenue spending power of single-purpose fire and rescue authorities will be reduced by only 2.2% in 2011-12 and by 0.5% in 2012-13.
The local chief fire officer in Tyne and Wear advises me that although the average loss across the country is 6.5%, in the metropolitan areas it is 12.9%. He believes that if the cuts go ahead they will lead to a weakening of national and local resilience, firefighters made compulsorily redundant, a further reduction in the number of rescuers, a significant fall in the number of readily available appliances and fire station closures. What will the Minister do to ensure that that prophesy does not come true?
All local fire and rescue authorities must perform their statutory duties under the Fire and Rescue Services Act 2004 and act in a way that is consistent with their integrated risk management plans. The Government adjusted the fire formula following consultation with local fire and rescue authorities and increased the weighting given to the needs element and risk factors in urban areas.
Will my hon. Friend confirm that at least £630 million will be wasted by the Labour Government’s commitment to regional control centres and that in the south-east the taxpayer is likely to be paying £1.5 million a year in rent over the next 20 years for a control centre in Farnham that nobody needs? All that money could be better spent on the fire service today.
My hon. Friend is right to point out the exceptionally strong condemnation by the National Audit Office and the Public Accounts Committee of the previous Administration’s project. We have done our best to minimise the damage to the taxpayer by terminating the contract and thereby ending the haemorrhage of money. We have also reduced the maintenance costs of the remaining stations and are seeking end uses for them. We are making progress in finding an appropriate use for them, to get them off the public books as swiftly as we can.
Fire services in Hampshire, Essex, Dorset, Devon and Somerset are receiving an increase in the Government grant over the next two years. South Yorkshire, Tyne and Wear, the west midlands, Merseyside and Greater Manchester all face cuts of more than 12%. Why?
Apart from the adjustments to which I have referred, I used the same fire resources needs formula as I inherited from the right hon. Gentleman, so he should know.
The Minister should stop being so complacent about these terrible cuts to the fire service. He has been warned by the country’s metropolitan chief fire officers that if his cuts proceed lives will be endangered and our ability to respond to acts of terrorism and other major incidents will be compromised. Will he listen to their warnings and scrap his plans for even deeper cuts to the fire and rescue service in years three and four of the budget cycle?
I was about to congratulate the hon. Gentleman on retaining his post in the reshuffle; I might rethink that, because I am afraid it is the same old story and he is plain wrong. The Government have made it clear that we are protecting the fire service as a front-line service. We have back-loaded services and indicated to county councils with fire authorities that they should maintain the same profile. We have also made available £70 million of capital grant to improve their future adjustments and made it clear that we will protect all front-line operations.
Surplus Public Land/Offices
2. What steps his Department is taking to dispose of surplus public sector land and offices. (77095)
We are leading a cross-Government programme to release surplus public land for up to 100,000 homes.
I am delighted that my right hon. Friend envisages all that surplus land being released, but will he please explain how the finances will flow to provide those houses and say something about social mobility and housing?
My hon. Friend is absolutely right: it is one thing to release brownfield land; it is another to get it built on. That is why we introduced the innovative build now, pay later regime, which will get homes on those sites quickly, with developers paying for them only when the receipts start to come in. That will do a great deal for social mobility, as will the home swap direct scheme, which was launched last week, and which I noted the Opposition criticised.
The Minister will probably guess that I was against the abolition of regional development agencies. Some of us are worried about the arrangements that were made to enable staff to start social enterprises, with generous endowments from the RDA, who then go into competition with existing players in the third sector.
The hon. Gentleman need not be too concerned. We believe that the best way of getting homes built—and the most built—is proper free competition between different providers, different developers and different organisations, which would range from co-ops to registered social landlords and commercial developers. We see no problem with that, and we have gained some sense that it is working. After all, more affordable homes for rent were built in the first year of this Government than at any time since John Major was in power.
3. What the monetary value was of (a) council tax relief for second homeowners and (b) discounts on council tax for empty properties in England in the latest period for which figures are available. (77096)
The Department keeps no figures for Scotland, but for 2011-12 the estimated monetary value of council tax relief for second home owners in England is £45 million, and for discounts on council tax for long-term empty properties in England it is £70 million. The hon. Gentleman might wish to refer to the written ministerial statement on technical reforms to council tax that I have laid before the House today.
I thank the Minister for his response. What would he say to those who think his new policy, as in his statement, is a penalty surcharge? Does he agree that they are wrong and misguided?
I should point out to the Labour Whips that the hon. Gentleman’s question was not planted to coincide with today’s announcement. The Labour Government reduced the second homes discount to 10%. I would have thought that the hon. Gentleman welcomed what we are doing rather than condemn it. Perhaps he is of a mind that because the Tories are doing it, it must be wrong.
Second home and holiday home ownership in some Cornish parishes is as much as 80% of the overall housing stock. As part of the Government’s localism agenda, will my right hon. Friend consider giving local authorities the power to limit the number of second and holiday homes in an area?
I think that would be rather difficult and open to abuse. This is an important step for my hon. Friend’s constituents and it should enable council tax bills to be cut by an average of about £20.
4. What estimate he has made of the number of social housing units occupied by people earning over £100,000 per annum. (77097)
We estimate that there are about 6,000 households in social housing where the person named on the tenancy agreement and their partner have a combined income over £100,000 a year—something we intend to tackle through the pay to stay scheme, whereby those on six-figure incomes who wish to stay in their properties can pay to stay there.
The 2,345 people currently on the housing waiting list in Cannock Chase will be gobsmacked to learn that an estimated 6,000 people still living in council houses are paying a subsidised rent despite earning more than £100,000 a year—four times the average salary of my constituents. With so many people in need of housing languishing on waiting lists, what assurances can the Minister give me and my constituents that those people who earn more than him will be forced to pay their way like the rest of us?
My hon. Friend points out a real problem with the housing system—that it is possible to earn a six-figure salary, sit on the Labour Benches and still occupy a home built for some of the most vulnerable people in society, who deserve those homes. We will allow the pay to stay scheme to go ahead, meaning that people can stay in their homes and pay the market rent so that we can use all the money to build more affordable homes for people who really need them.
If the Government are so keen on restricting social housing to those on low incomes, how does the Minister explain the affordable rent regime? Is it not the case that in local authorities such as my own, even at 65% of market rents, the income required—without benefit—to pay for an affordable family-sized house is £77,000 a year?
We are keen to protect people on low incomes, not on high ones, as the hon. Lady suggested. The point about the housing benefit changes is that many of her constituents, along with mine and everyone else’s, will be asking how it can be fair for people in receipt of housing benefit to live in homes and streets that people on ordinary salaries cannot possibly afford to live in. That is the system that we are going to fix; when the Opposition were in government, they used to support that policy.
Will the Minister ensure that the revenue raised by pay to stay is ring-fenced for social housing?
I can provide a little more information. We expect some tens of millions of pounds to be raised by pay to stay. Those with six-figure incomes will pay a market rent to stay in their homes, and we will use every single penny of the money to build the more affordable housing that the most vulnerable people in society deserve and need.
Does the £100,000 to which the question refers constitute household or individual income?
It constitutes the income of a household consisting of two partners.
5. What the percentage change in band D council tax was in (a) England and (b) Worcestershire between 1997 and 2010. (77098)
Council tax in England more than doubled under the previous Administration, and shire counties were hit particularly hard. Under that formula, Worcestershire saw an average rise close to 140%.
Will the Secretary of State take this opportunity to record his thanks to staff and councillors at Malvern Hills and Wychavon district councils, which have managed to make enough back-office savings to enable them to freeze council tax following those shocking increases?
I am happy to join my hon. Friend in thanking those two councils for prioritising their expenditure, for working together, and for protecting front-line services. After all, that is what local government should do, and it is what local government is particularly good at.
The Secretary of State has earmarked funds for councils for this year and next year to encourage them to freeze council tax. Given the importance to councils of planning, is the Secretary of State thinking about what will happen in the following year? Is he likely to continue his present policy? Does he accept that if he withdraws the grant he will not have frozen council tax, but will merely have deferred two years’ increases and produced the possibility of very large increases in the following year?
With great respect to the hon. Gentleman, I do not accept that for a moment. The arrangements for council tax in the current year will continue next year and the year after, throughout the spending period. On top of that, there is a one-off payment to councils to help them to reduce their expenditure. That seems eminently sensible to me. After that, the people will decide; it will not be up to me. The hon. Gentleman scoffs at referendums. The hon. Gentleman does not like talking about democracy. The hon. Gentleman seems not to think that the population are up to making such important decisions, but we do.
6. What steps his Department is taking to promote local enterprise. (77099)
8. What steps his Department is taking to promote local enterprise. (77101)
19. What steps his Department is taking to promote local enterprise. (77113)
My Department has been championing a series of measures to promote local economic growth. For example, our proposals for the local retention of business rates will reward councils for working with business, and will provide new incentives to drive growth. The 22 enterprise zones will generate new businesses and jobs in a targeted way across the country, from Newcastle to Newquay.
I thank the Secretary of State for his leadership in developing the enterprise zone at Warton. What steps is his Department taking to drive it and similar enterprise zones forward, and to create jobs for the people of Lancashire?
I am grateful for my hon. Friend’s kind remarks. I do not want us to become a mutual admiration society, but although my hon. Friend was initially unsuccessful in securing enterprise zones, he continued to lobby, made a very good case for them, and managed to form a coalition of the willing in industry that Opposition Members would do well to emulate. Following the announcement on 3 October, when the Chancellor invited the Lancashire and Humber local enterprise partnerships to put together a scheme, my officials worked with the Department for Business, Innovation and Skills and Lancashire councils to produce something of which the people of Lancashire will be very proud.
My question also concerns job creation. When I met the chief executive of my local council recently, we talked about what more could be done to support encourage local entrepreneurs. Will the Secretary of State do all he can to encourage all councils to display a “can do” rather than a “can’t do” attitude when approached by budding entrepreneurs?
My hon. Friend’s council has long had a reputation as a can-do council, and it is one of the best for keeping down the council tax and keeping satisfaction high among its residents. Given that quite a lot of the important developments in west London lie within her patch, we are looking to her and to the council to expedite badly needed growth.
Businesses in Oxford West and Abingdon tell me how important it is that they access local government procurement contracts, and about the difficulties they have in navigating some of the complicated procurement processes. The Government have taken some steps to support local businesses to access central Government procurement processes, but how can the Secretary of State’s Department help to open up local government procurement processes in the same way?
My hon. Friend makes a very important point. Indeed, we have been working very closely with the Local Government Association to try to free up procurement. Part of that, of course, has been ensuring that there is transparency so that we can see how councils are spending their money. I am particularly grateful to the LGA, with which we are trying to demystify the complexities of European procurement regulations to allow local businesses to bid.
The Secretary of State will surely acknowledge that in cutting two thirds of the funds available to the regions of England when the regional development agencies were abolished, the Government struck a blow at the very innovation, growth and enterprise that he has been praising this afternoon. Is it not strange and revealing that it has been announced today that Sheffield Forgemasters will be given a third of the loan that was originally sought? Is that not an admission by the Deputy Prime Minister, the Chief Secretary and the Business Secretary that they got it totally wrong last year?
The right hon. Gentleman is, of course, absolutely wrong. The regional development agencies cannot be described as a success by any stretch of the imagination. The north lost out in economic growth compared with the south under Labour, and gross value added per head as a percentage of the total UK level fell across the north from 1997 to 2009 but rose in London. The north lost out in private sector jobs created under Labour—for every private sector job generated in the north and midlands, 10 were generated in London.
Why was the Coventry and Warwickshire bid for an enterprise zone turned down?
It came very close, and I hope the hon. Gentleman will work with the local councils, because it is possible to have a local development order in the area. It is certainly possible to do a deal on broadband, and once the Localism Bill is in force it will be possible to do a deal with regard to local taxation.
How can the Secretary of State claim to be promoting local enterprise when the Government have kicked away its support? They abolished RDAs, against the advice of local business; he has paralysed the planning system; and his proposals for business rates mean that local authorities would be better off building big retail parks than supporting manufacturing and small business. As we now know that for every two jobs lost in the public sector fewer than one is being created in the private sector, why does he not admit that this out-of-date, ideologically driven policy is not working?
I welcome the hon. Lady to her new position. I hope all her questions are as feisty as that one.
The Labour party simply has to stop clinging to the comfort blanket of the idea that it somehow left a golden economic legacy. It did not. It is impossible for Labour to defend local government and at the same time say that all it would do is put up sheds for Spudulike and Carphone Warehouse. Local authorities are responsible, and they will use the new initiative to work together and bring about growth, unlike the regional development agencies, which by and large were not a good thing.
7. What recent assessment he has made of the level of protection afforded to high-value agricultural land in his proposed planning reforms. (77100)
The draft national planning policy framework contains strong protections to safeguard high-value agricultural land and recognises the importance of food production. We are now carefully considering the responses to the consultation.
Food and farming are vital to tourism and exports in Norfolk, and its produce is very high quality, as the Secretary of State found out when he visited the Norfolk food festival in Parliament earlier this month. Does the Minister agree that the planning framework should take into account the long-term value of agriculture, as once farmland is lost it is very hard to get back?
My hon. Friend is absolutely right—and when I was talking to the Secretary of State earlier, he extolled the virtues of the pies available at the Norfolk food festival. We must take into account the long-term value of food security as well as the short and medium-term economic benefits of food production.
Local Government Finance
9. What steps he is taking to help local authorities reduce the cost of their property. (77102)
First, let me pay tribute to my hon. Friend for his great work in the Westminster Sustainable Business Forum. Public sector assets are worth about £385 billion, almost two thirds of which are owned by councils.
I am grateful for the Minister’s reply. Is he looking forward to sending his boss along to next week’s launch of the second leg of the review of how much can be saved by reforming the way property is used by local public sector agencies and local authorities, which will highlight that this is about not just bricks and mortar but increasing productivity and spending money more wisely?
I have no doubt that my right hon. Friend the Secretary of State will enjoy that visit enormously, especially if good food is on offer. My hon. Friend is on to something here: public sector assets are worth £385 billion, and two thirds of them are council-owned. If a saving of just 20% in running costs were made, that could save about £35 billion a year in receipts over 10 years. There is an enormous amount of money to be saved, therefore, and I commend the work that has been done.[Official Report, 21 November 2011, Vol. 536, c. 2MC.]
National Planning Policy Framework
10. What recent representations he has received from environmental organisations on the national planning policy framework. (77103)
I have received several representations from environmental organisations on the draft national planning policy framework, and we are now considering our response to them.
That was a short, and not particularly sweet, reply. As I am sure the Minister knows, the wildlife trusts are calling for local wildlife sites and nature improvement areas to be included in the national planning framework, in order to protect wildlife against developers and to give councils more strategic guidance on improving local ecological networks. Will the Minister explain why such locations are not included in the framework?
I have been having some very constructive discussions with the wildlife trusts, in which they have made precisely that point. The hon. Lady will understand that I cannot pre-empt the outcome of the consultation, but I can say that we have heard their perfectly reasonable representations and have listened very carefully.
There has been considerable outcry about the presumption in favour of development in the new framework, but is it not correct that there has been such a presumption in our planning framework for the past 40 years?
My hon. Friend is right, but the presumption in the draft framework is in favour of sustainable development and it is very important that development that would damage the future environment and social aspects of our towns, cities and countryside does not go ahead.
As the Minister will be aware, many environmental organisations, ranging from the Campaign to Protect Rural England to English Heritage and to the National Trust—which might be better known to the Minister as left-wing nihilists—have raised a storm of protest about the Government’s planning proposals. Are their fears about the future protection of the environment likely to be allayed by the revelation that Treasury officials were much more involved in writing the national policy framework than were environmental planners?
First, may I welcome the hon. Lady to the Dispatch Box? It is good to have her serving on the Opposition Front-Bench team, as she has a long-standing interest in environmental and social matters. I am happy to correct the report to which she refers, however, which I think was based on a series of written parliamentary answers. I can assure her that a wide range of officials from many Departments participated, including from my Department and the Department for Environment, Food and Rural Affairs. That report was therefore incorrect.
Affordable Rent Scheme
11. How many bids to participate in the affordable rent scheme have been received to date. (77104)
We received offers from 197 providers for the affordable homes programme by the deadline of 3 May. On 14 July, we announced that, subject to contracts, 146 providers will deliver 80,000 new homes for affordable rent and affordable home ownership, with Government funding of just under £1.8 billion.
Nearly six months into this scheme, has my hon. Friend had an opportunity to assess what impact it might have on the provision of social housing in areas such as my constituency?
I hope that my hon. Friend will be reassured to know that 15 of the 146 bids were for the Milton Keynes and Aylesbury Vale area. Ten of the bids were accepted, and nine have been signed up with the Homes and Communities Agency. Overall, the Government are committed to investing nearly £4.5 billion in new affordable housing, delivering 170,000 new affordable homes compared with the 150,000 originally estimated. That means we shall be increasing the supply during this Parliament rather than reducing it, as the previous Government did.
Will the Minister tell us how much money is being provided to local authorities to develop new council homes? Why are his Government insisting that any self-funded local development be provided by increasing council rents to 80% of market value, which makes those rents totally unaffordable in many urban parts of this country?
I want to set the hon. Gentleman straight, because the ratio of the rent packages under the affordable rent offer in London is averaging 65% of market rents across London. Of course, tenants of those homes are eligible for housing benefit, as required.
14. What steps his Department is taking to support home ownership. (77108)
This Government are, of course, committed, first, to ensuring that interest rates remain low for as long as possible, so we have been tackling the deficit to help first-time buyers. In addition, we are helping 10,500 first-time buyers through our FirstBuy scheme and 100,000 new right-to-buy tenants currently in council houses will own their own homes.
My right hon. Friend will be aware of the gap between deposit aspiration and deposit actuation for first-time buyers in Banbury and Bicester. Will he update the House on how the FirstBuy scheme will support young first-time buyer families in my constituency?
People are having to save such large deposits for their homes and we are keen to do something about that, so the FirstBuy scheme ensures that they need to save only 10% rather than the current average of 20%. I am pleased to tell my hon. Friend that 169 homes are available in his constituency under the scheme.
At a time when the Scottish Widows research shows that the average age of first-time unassisted buyers is set to rise to 44, is the Minister at all concerned that he might be just a little too complacent in his response?
First, just to correct the figures, we think that the current average age is about 37. There was a report suggesting that over the next 20, 30 or 40 years the figure might increase unless action is taken. We are absolutely focused on taking that action, which is why, as we have discussed, 100,000 homes are being sold through the right-to-buy scheme, with 100,000 affordable homes being built. This afternoon, we have discussed the 100,000 homes on Government land and, of course, the 170,000 homes through the new affordable homes programme, which the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell) mentioned. Yes, we are confident; we are doing many of the things that never happened under the previous Administration.
Because the Government have mismanaged the economy, consumer confidence, house prices and house building are falling, and we have a mortgage market in which people cannot get mortgages. Were it not for the 60,000 homes that were commissioned and paid for by a Labour Government but built in the past 12 months—Labour’s legacy—the house building industry would have been on its knees. Will the Housing Minister now back Labour’s call to repeat the bankers’ bonus tax in order to build 25,000 homes and create tens of thousands of jobs and apprenticeships? Will he also work with lenders and the house building industry to introduce a mortgage scheme that will offer hope to those who wish to buy their own home that they will be able to realise their dream?
I welcome the hon. Gentleman to his new position. He will be the eighth housing spokesman or deputy on the Labour side whom I have faced either in government or in opposition. I hope that he stays there longer than the previous incumbents. I think the main questions are about the new homes bonus, the HomeSwap Direct scheme, the opposition to £100,000-salaried tenants in council homes and whether the gap in policy and the constant switching of Ministers are going to come to an end, because without that the Opposition have nothing to say about housing policy at all. We are starting to get homes built in this country for the first time in years.
National Planning Policy Framework
15. What assessment he has made of the legal opinion obtained by the Campaign for the Protection of Rural England in relation to the green belt and the national planning policy framework. (77109)
The Government have clearly stated their determination to maintain strong protections for the green belt. Of course, by abolishing regional strategies we are removing the threat to the green belt in more than 30 separate locations across the country. We have received a large number of representations in relation to the NPPF and we will give all of them, from all sources, appropriate and careful consideration.
I note that the Minister is ignoring the legal opinion. Let me read to him what CPRE has to say. It is concerned that
“Green Belt policy would be undermined by the sustainable development presumption together with the expectation that applications should be approved unless there are adverse impacts to policies in the NPPF as a whole.”
What is he doing to address those concerns, which result from a legal opinion? Does he agree with that advice?
I have to say that one comes across a lot of legal opinions—I have done so myself in a previous life—and I have every respect for the author of that opinion, but we will consider it along with all the other submissions we consider in relation to the NPPF.
Perhaps the difficulty is that the countryside is not defined and neither are green spaces or green areas. Could we perhaps refer to “appropriate” rather than “sustainable” development?
I am grateful to my hon. Friend for her contribution. Obviously, we will consider any constructive suggestions, as we have made clear. It is worth bearing in mind that the presumption enhances a plan-led approach. Indeed, the significance of up-to-date plans is strengthened under our proposal, which I note that another eminent QC described in the planning encyclopaedia as an “excellent piece of work”.
Landlord Accreditation Schemes
16. What steps he is taking to encourage local authorities to develop landlord accreditation schemes for the private rented sector; and if he will make a statement. (77110)
Good accreditation schemes can play an important role in developing a local authority’s relationship with its local landlords. Experience shows that accreditation works much better when it reflects local circumstances at local government level.
Given that it is only seven weeks until the official beginning of winter and that one of the great failures of the private sector for tenants is that it often provides badly insulated homes, what can the Government do to make sure not only that tenants stay warm but that they do not have ridiculously high fuel bills?
My right hon. Friend makes a very important point. Both fuel poverty and carbon emissions are major targets of the Government’s policy. That is why we are introducing the green deal next year, which is available to landlords for the private rented sector, and that is also why we have the energy company obligation. My right hon. Friend will know that the Energy Act 2011 provides the opportunity to introduce minimum standards in the private rented sector from 2018 if we need to go further.
Is the Minister aware of the growing trend whereby the produce of drugs sales is used to fund the private rented sector and as a means of laundering the money involved? If so, what is he going to do about it.
Clearly, if the right hon. Gentleman has evidence of that, I am sure that he will pass it to the proper authorities so that action can be taken. I am well aware that such matters will be vigorously investigated by the police and, if necessary, the Revenue.
Order. I had been advised that the hon. Member for St Ives (Andrew George) had withdrawn his question, but a simple nod of the head will suffice to reinstate him. We are grateful.
17. What contribution he expects the private rented sector to make towards future housing need. (77111)
I call the Minister, who I am sure has come fully briefed.
The private rented sector has already responded flexibly to housing need over the past few years. By 2010 it had expanded to house some 3.4 million households in England, an increase of 1 million since 2005.
I am grateful to the Minister for his response and apologise for any delay, which was caused by my train. In view of his response, what assessment and modelling has his Department undertaken on the impact of the change to the thirtieth percentile for housing allowance and the extension of the single-room rent to those under 35 years of age? Many private landlords are extremely concerned about the impact on their viability.
I thank my hon. Friend and am grateful that his train got him here on time. The Department for Work and Pensions has published a full assessment of the number of residents projected to be affected by the changes that have been brought forward and has presented to the House the facts of the situation.
If we accept that, as the Minister suggests, we will be more dependent on the private rented sector, what action will he take to deal with the very high rents and very low standards in much of the sector?
The hon. Gentleman might be interested to know that satisfaction surveys have shown that 70% of tenants in the private rented sector say that they are fairly satisfied or very satisfied, which contrasts with 69%—slightly lower—in the social rented sector, so we need to be careful not to jump to conclusions about that. It is of course important that accommodation is of a high standard, which is why many local authorities have developed accreditation schemes, and in some cases licensing schemes, to deal with the problem.
Green Belt Land
20. What steps he is taking to protect green belt land. (77114)
The draft national planning policy framework is unequivocal in continuing the protection of the green belt. By abolishing the previous Government’s regional spatial strategies, we are removing the top-down pressure on councils to take away the green belt in 30 areas across England.
My constituents in Hanbury, a small village near Redditch, are facing a proposed development of over 400 homes, which would considerably change the nature of the village. Will my right hon. Friend reassure me that their rights will be protected under the framework and that due consideration will be given to their concerns?
My hon. Friend knows that I cannot comment on the particular situation to which she refers, but she should be reassured about the new powers set out in the framework. The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), quoted from the legal bible on planning, the planning encyclopaedia. It states, “The most impressive of the sections in the NPPF is that on the green belt.” As a précis of PPG, it states that, “it could not be bettered, in particular in respect to inappropriate development. It would certainly be inconsistent with the policies herein contained for there to be any significant encroachment of built development on the green belt.”
21. What plans he has to increase the powers of local authorities to deal with unauthorised development. (77116)
The Localism Bill includes five provisions aimed at strengthening local planning authorities’ powers to tackle unauthorised development. These include restrictions on the use of retrospective planning applications when an enforcement notice has been served and the ability of councils to take action against unauthorised development that has been concealed deliberately.
Does my right hon. Friend agree that unauthorised developments have created tensions between Travellers and the settled population and consequently created community dysfunction?
My hon. Friend makes a very reasonable point. The Traveller community has managed to live side by side with the settled community for many years, but recent changes in planning law and recent reliance on human rights have created a number of difficulties. We will be issuing some revised guidance very soon, which will complement the Localism Bill.
T1. If he will make a statement on his departmental responsibilities. (77119)
Last week I spoke at the conference on supporting local communities after August’s disgraceful riots. Money is already reaching local firms, but at the request of councils we are extending the deadline for the high street support scheme until after Christmas in order to ensure that even more firms can be helped.
I have a meeting with Louise Casey, who is leading a new troubled families unit in my Department. Such families cost the economy more than £8 billion, and they have been failed by up to 20 overlapping agencies.
This morning I represented Her Majesty’s Government at the memorial service for Sir Simon Milton. His influential voice will be greatly missed, and the Prime Minister in a written tribute said:
“A gentle and modest man, he earned the respect and admiration from politicians of all political colours and from the communities he served so diligently.”
He will be greatly missed.
Repatriating council houses, as well as their rents, will be positively welcomed by tenants and enable Cornwall to build much-needed new council housing, so will the Secretary of State assure me that plans to change the self-financing of council housing are on track to be delivered in April next year?
I know my hon. Friend has a considerable interest in council housing and has been a substantial champion of it. Yes, indeed, that reform is part of the coalition agreement, and, although it has taken some while to negotiate, once it is delivered we will be able to distribute debt throughout the country and place authorities in a much better and stronger position. I know that it enjoys support across the House.
May I associate myself with the Secretary of State’s words about Simon Milton?
As a direct result of a decision taken by the Secretary of State, the most deprived 10% of single-tier councils will see their spending power reduced by almost four times as much as the least deprived 10%. So far, he has failed to justify that choice of his. Will he now explain to the House why he thinks that it is fair?
I welcome the right hon. Gentleman to his new post. I hope that he will be extremely comfortable, and we will do our best to increase his comfort as the months go on.
The answer is very straightforward. The previous Government made a number of decisions to attack the most deprived areas by removing measures such as the working neighbourhoods fund. They left no provision, so it was up to us to put in some provision to help the most needy. In addition, we have ensured that under those schemes the most needy authorities receive more than the least needy authorities.
I thank the Secretary of State for his kind words, but an answer to the question would have been even nicer, so let me try another one.
In the Secretary of State’s speech to the Conservative party conference this year, he promised new safeguards for playing fields. In fact, he is scrapping Labour’s planning policy guidance in a way that
“significantly weakens the current protection on sports facilities”—
not my words, but those of Sport England. Why is he doing that, and will he now revise his national planning policy framework to put that protection back in?
I know the right hon. Gentleman is new to the job, but he is very distinguished and should at least have done his homework. He knows perfectly well that that is certainly not the case. We are having very constructive discussions with Sport England about planning policy, and those protections will be there.
T2. What are the Government doing about empty homes and, in particular, homes above shops as a way of easing pressure on the green belt? (77120)
I thank my hon. Friend for his question. We now have some 700,000 empty homes, of which over 300,000 have been empty for more than six months, and it remains a key priority of this Government to bring them back into use so that some of the 1.7 million families on council house waiting lists and the many more who would like to purchase their homes can do so.
T3. Will the Secretary of State confirm the really startling figures from the first quarter of the operation of the new homes bonus, which show that new home starts went down by 18% compared with the same period last year, and that residential planning permissions went down by 23% compared with that same period? If he can confirm that those figures are correct, will he tell us what plans he has to revise the mechanisms of the new homes bonus? (77121)
Every question from the Opposition seems to involve an attack on the new homes bonus, which will pay the same amount as last year—nearly £200 million—for new homes started, in addition to another sum which may well be similar again, and in addition to an additional £20-plus million for the affordable housing element of the new homes bonus. The House needs to understand whether or not the Opposition support a bonus being paid when new homes are built.
T6. Does the Minister agree that the key to opening up public sector procurement opportunities for small and micro-businesses is to ask local authorities to ensure that companies that are experts in their fields are not effectively excluded by the use of consolidated contracts that favour larger businesses that might be a jack of all trades but a master of none? (77124)
I am grateful to my hon. Friend for raising that important point, because this is precisely why we are working with the Local Government Association on its local procurement programme. The programme is looking in particular at what are sometimes described as micro-lots, which are used as a means of breaking up a large contract into smaller bundles, which are specifically designed to be more accessible to smaller firms and providers.
T4. Even though a five-star dinner at the Savoy, which was paid for by the lobbyist Bell Pottinger, had in attendance at least one firm that had an application in with the Secretary of State’s Department, he says that he has no reason to register it in the Register of Members’ Financial Interests because that day he was eating not as a Minister but as a private person. If we are to have a robust, transparent system of lobbying, does he not think that that loophole needs to be closed, so that we do not have to guess on which days Members are eating privately and on which they are eating ministerially? (77122)
Order. I wanted to hear the question, but the registration of Members’ interests is undertaken by Members in their capacity as Members, rather than as Ministers. I suspect that there will be a correspondence or exchange subsequently, but that is my understanding of the position.
T7. Southend council is facing a sensitive planning application to build a hospice on green belt land. What reassurance can my right hon. Friend give to local residents that that would not create a precedent for more building on the green belt? (77125)
My hon. Friend knows that I cannot comment on that particular application, for reasons that he understands, but I think it has been clear from our exchanges today that our determination is to protect the green belt through the national planning policy framework, and to take away the threats that are placed on local councils to remove it.
T5. As a member of the armed forces parliamentary scheme and a strong supporter of the British Legion, I am concerned to ensure that returning service personnel receive the strongest possible support. Why, therefore, did the Minister admit on 10 February that his Department had done nothing to assess the housing needs of that group? (77123)
I am not sure whether the hon. Lady intended to suggest that I had made that comment, but let me reassure her that I have held a returning forces summit to talk about and act upon those people’s rights to get into new-build homes and to get to the top of the waiting lists. I can further tell her that it is my intention to ensure that they have No. 1 priority when we launch the tenancy directions in a week or two. It is the absolute priority of our Department to ensure that returning personnel get every advantage when it comes to new homes.
T8. With reference to planning policy, what measures are the Government going to introduce to ensure that councils can encourage businesses to thrive and prosper, and encourage new ones to come to their area? (77126)
This is happening in relation not only to our planning policy but to the change in the way local government is financed. We have heard some discussion about the new homes bonus, and we are changing and repatriating the business rate. We are also working alongside business in the new enterprise partnerships, rather than dictating to it as the previous lot did.
Greater Manchester is set to lose up to 500 firefighters during this Parliament. How can it be right that Greater Manchester fire service faces a two-year funding cut of 9% when Essex and Cheshire will enjoy an increase of 2%?
The fire distribution formula is based essentially on a needs element, which in turn looks at the pressures on the fire authority, including risks and issues that arise from being urban. In fact, as I said in response to an earlier question, I increased the weighting given to urban factors within the formula. Larger authorities often have the greatest ability to deal with shared services, joint operation and better procurement. The spending power reduction takes account of reserves and council tax, and always remains significantly less.
T9. Many companies in my constituency are finding it hard to cope financially at the moment. What action will the Minister take to boost local enterprise and local business in Kent? (77127)
I am sure my hon. Friend will be delighted with today’s announcement of the regional growth fund expansion in east Kent, including the funding of small and medium-sized enterprises. This supports delivery of critical infrastructure to provide jobs, and at £40 million it is one of the highest awards. I am delighted that the regional growth fund is helping investor technology, and we are seeing the start-up of a local enterprise partnership at the Sandwich site to deal with those questions relating to Pfizer.
Is the Secretary of State aware that when the working neighbourhoods fund was created, local authorities in Bolsover and Chesterfield provided lots of apprenticeships in north Derbyshire. Unless that working neighbourhoods fund is continued through 2012, those apprenticeships, which are like the song and dance of one of his ministerial colleagues, will be gone. What will he do about that?
Before the hon. Gentleman gets into his version of the two step, let me tell him that the former Labour Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), announced the ending of the working neighbourhoods fund, which ended in March. We found some transitional relief, so if the hon. Gentleman is interested in dancing, I suggest he do a tango with his right hon. Friend.
Wiltshire council continues to spend eye-watering sums of taxpayers’ money on redundancy payments. Will the Secretary of State back last year’s Audit Commission recommendation that councils should publish details of such severance payments within a short, set time period?
Controversially, developers in Rochdale wish to build 600 houses on the site of what was the world’s biggest asbestos factory. Will the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), say why, during a recent party political visit to Rochdale, he held a private meeting at the site with the council’s head of planning, which excluded everyone else, including long-standing local community campaigners?
All meetings are dealt with appropriately through the codes. The hon. Gentleman will know full well that in any planning application all matters must be dealt with entirely appropriately and transparently.
Time and again, my constituents complain about the effects of garden-grabbing on the character of local neighbourhoods. Will my hon. Friend assure me and the House that planning reforms will protect residential gardens, and stop inappropriate development in future?
I certainly will. We have already changed the definition of brownfield sites so that gardens are not included and no local authority is obliged to build on gardens if it does not want to.
How many jobs and businesses will be created as a result of the enterprise zone being set up on Teesside?
The hon. Gentleman seems to scoff at the idea. Having being in Teesside, it seems to me that job prospects are considerably enhanced. Frankly, he should get behind that, and not criticise it.
I thank the Secretary of State for visiting Great Yarmouth last week and seeing our enterprise zone at first hand. With the announcement then of businesses already signing up to an enterprise zone, and today a signature to the memorandum of understanding with Scottish Power for our port and outer harbour, does he agree that such working together by local authorities and businesses will see the growth of real jobs through enterprise zones?
I was very impressed by what I saw in Great Yarmouth, which has within it Nelson ward—the fourth most deprived ward in the country. What impressed me was people’s determination. Great Yarmouth had an opportunity, about 30 years ago, to become the Aberdeen of the south, and with the move towards carbon capture and similar moves on energy it has an opportunity to become a major driving force within the United Kingdom.
May I draw attention to my interests in the register?
Is the Secretary of State aware that Notting Hill Housing Trust, a housing association, is reported to be marketing overseas some of the homes that it is currently building? Although it may be understandable for private builders facing the very serious crisis in selling properties to do this, is it not totally unacceptable, at a time of chronic need for housing for British people here in this country, for a housing association to be selling homes overseas? What is the Minister going to do about it?
I am grateful to the right hon. Gentleman, who has a long history in housing, and I will certainly undertake to look into the subject that he has raised. Let me mention something else that has come to my attention. A lot of people who are in council houses have second homes, and they rent out their main home or the council home. That is another scandal that I am sure he will appreciate our bringing to an end.
I very much welcome the establishment of the new national social housing HomeSwap website. Is it not a shame that the shadow Housing Minister describes it as a “gimmick”, particularly since his party destroyed the last one?
The opportunity for people in social housing to be able to swap homes in exactly the same way as in the private rented sector, or indeed for home owners, is absolutely invaluable. The scheme says a lot about this Government’s intention of ensuring that social mobility applies to all. It is a great pity that the Opposition spokesman criticised it, given that it will give people the opportunity to move for social reasons, family reasons, and, of course, work.
The Government have made much of localism. Does the Minister believe that it is appropriate that local people and Lewisham council can prevent further betting shops in Deptford high street, given that we already have eight betting shops and four pawnbrokers? Will he revise the Use Classes Order 2010?
The right hon. Lady rightly takes up the cause of her constituents, as do other Members across the country. We are taking this very seriously, and we will have more to say about it during the weeks ahead.
Does the Minister with responsibility for localism believe that Government, and indeed local government, websites can provide an invaluable way of allowing ordinary people to express their point of view? If 100,000 people were to express a point of view, does he think that they should be listened to? A simple yes will suffice.
I hope that we are a listening Government, and I hope that my colleagues in local government are listening councils.
Order. Demand has exceeded supply and we must now move on.
(Urgent Question): To ask the Secretary of State for Energy and Climate Change if he will make a statement on the Government’s proposals to reform feed-in tariffs.
Since the feed-in tariffs scheme started, it has been successful in encouraging people up and down the country to get involved in local, clean green energy generation. Solar photovoltaic has led the way, and more than 100,000 homes now generate their own electricity. It is a very attractive technology to install, driving forward the coalition’s ambitious, decentralised energy agenda, but let us be clear: the current returns now available on solar PV investments, funded by energy consumers through our energy bills, are unsustainable. Falling PV costs mean that returns are at least double those originally envisaged for the scheme. This does not provide value for money to consumers. If we do not act now, the entire £867 million budget for the current spending review period would be fully committed within the next few months. That would limit the number of people able to benefit from feed-in tariffs.
We are therefore consulting on new tariffs for solar PV installations. Owing to the urgency involved, we propose that the new tariffs would apply to all new installations that become eligible for FITs on or after a “reference date”, which we propose should be 12 December. We are also seeking views on other proposals, including one to strengthen the link between feed-in tariffs and energy efficiency. It cannot be right, and it is a fault of the system that we inherited, that we subsidise renewable energy generation on energy-inefficient buildings.
We are determined to secure the continued success of feed-in tariffs through sustainable growth, not boom and bust. We are consulting on new tariffs for solar PV to secure the FITs budget in the interests of all eligible technologies and to bring greater coherence to the Government’s ambitious policies to green Britain’s homes.
Thank you, Mr Speaker, for forcing the Government to come to the Commons today. With thousands of jobs and businesses at risk, it was rather a surprise that the Government wanted only to issue a written statement. It is a shame that the Secretary of State for Energy and Climate Change could not spare the time to be here.
Today’s announcement is yet another example of a Government who are out of touch, are cutting too far and too fast, and have no plan for jobs and growth. Last year, the solar industry employed 3,000 people in 450 businesses. Today, it employs 25,000 people in 3,000 businesses. With growth flatlining everywhere else, today’s announcement threatens to strangle at birth the solar industry. It is a kick in the teeth for families who want to do the right thing by investing in solar. The new proposals guarantee that lower-income households will lose out, as fewer firms offer the lifetime deals that are currently available, and that solar will be available only to the well-off.
The Minister claims that installation costs have fallen by 30%. That is partly, I would argue, because of the mass, bulk investment in this new industry. If that is so, why have the Government reduced the tariffs by more than 50%? With a new rate of 21p per kWh, how many jobs and businesses have been put at risk? The UK has installed only 3% of the solar energy installed in Germany in the past two years. Is that the level of the Government’s ambition—3% of German productivity?
The Minister claims that the current scheme could add £26 to domestic electricity bills. The fact is that this Government’s failure to stand up to the powerful vested interests in the energy industry has led to £175 being added to bills in the past six months alone.
Will the Minister tell us why, when the consultation is not due to finish until 23 December, the cut-off point for eligibility under the existing scheme is 12 December? What does he say to people who have already commissioned domestic solar power systems and paid a deposit, but who, through no fault of their own, will not manage to install, certify and officially register them by 12 December?
Labour started the process of feed-in tariffs and we remain proud of it. It may have needed adjustment as costs fell, but the coalition has messed around with it repeatedly, given out mixed messages and left 25,000 workers in a high-tech industry of the future facing the dole. In opposition, the Conservatives promised a more ambitious scheme; today’s announcement is just another broken promise.
This is rather extraordinary, because there has only ever been one substantive vote on feed-in tariffs in the House of Commons. Everyone on this side of the House voted in favour of feed-in tariffs. The right hon. Lady and all her hon. Friends voted against them. Will she apologise because the last Labour Government had to be dragged, kicking and screaming, into setting up a feed-in tariff system? Not only that, but they so begrudged it that they set up the worst scheme that they could imagine. The amount of detail that was wrong and the scandalous way in which it was set up by the now Leader of the Opposition were disgraceful. The faults that we are rectifying were created by the previous Government.
The right hon. Lady says that we are out of touch. We may be out of touch with the solar lobby, but we are not out of touch with energy bill payers. She says that they are groaning under a £175 increase, but she wants to put that up. If we did not act now, consumers would face massive increases in energy bills. Today, she has come to the House with a different face on and she does not care about the cost that she proposes to add to energy bills. If energy bills go unchecked, it would add around £1 billion a year—that might be small beer to Opposition Members, but Government Members understand just how much strain energy consumers are under.
The right hon. Lady talks about the level of ambition. We know that had the previous Government had their way, there would be no ambition, because there would be no feed-in tariff scheme. The only reason we have a feed-in tariff scheme is that the Labour Government were defeated in the House of Lords by Liberal Democrats and Conservatives united.
The new tariff that we are proposing to pay is on a par with the tariff paid in Germany. Across Europe, the cost of solar subsidy has been falling. It is a real shame that the right hon. Lady is rushing to make partisan points rather than engaging in a sensible discussion on how we get the best value for money out of the feed-in tariff scheme. We have £867 million. We want it to be spread as widely as possible; she wants it to be enjoyed by the lucky few. Bumper double-digit returns of 10% or 15% for those lucky enough to install panels is disgraceful when people are lucky to get 1%, 2% or 3% at the building society. The Government are recalibrating the return on feed-in tariffs to the level—similar to 5%—that was originally intended. I am afraid that the right hon. Lady is the one who is out of touch.
Finally, the right hon. Lady asks why eligibility will start from 12 December. It is very simple. Were we not to do that, and were we to announce a change now and leave the current arrangements in place until next April, there would be a massive gold-rush, and the entire budget for feed-in tariffs—the entire £867 million—would be gone by then. The last people from whom we should take lessons on how to manage a budget are Labour Members.
As someone who thinks it is very important that we get lower energy bills, I welcome any move in the right direction. Will the Minister tell us how much his proposals might knock off the bill, and will there be other measures to get the price down further?
This is saving money rather than knocking money off the bill, but I can assure my right hon. Friend that we are absolutely determined to ensure that green policies deliver real value for money. Unlike the Opposition, we are engaged not in some sort of illusion of green never-never land, but in the realities of what will deliver savings to consumers now, and real green jobs and growth. It is that rather than wishful thinking that informs our policy making.
What are the implications for housing associations, such as Peabody, which by providing solar energy in my constituency is helping the very poorest in the country to cut their energy bills?
That will depend on the assumptions that the housing association has made of the rate of return that it will get. If it worked on the basis of the rate of return that was originally intended for the scheme when the right hon. Lady was in the Department—that is, around 5%—it will have absolutely no problem in going forward. If it has based the rate of return on the inflated rate that we have seen this year as a result of the dramatic fall in prices—conservative estimates are that the fall in costs is 30%, but others, such as Bloomberg, say that it is up to 70%—and if it is assuming a double-digit rate of return, it will struggle to finance the scheme.
However, I would say to the right hon. Lady, who I know is committed to this agenda, that we must see this stage of feed-in tariffs as building the foundations of a decentralised system that includes a large element of solar. However, even given the high costs of solar, at 21p it will attract the highest level of any subsidy of mainstream technologies. At that level, we cannot simply give an open cheque for unfettered deployment.
I listened with the very closest and most intense interest to the answer by the Minister, but if we could have slightly pithier answers from now on, it would aid us all greatly.
The requirement for participants in the scheme to achieve a certain energy efficiency will work against people in rural houses with solid walls, who will find that difficult to achieve. Will the Minister say something about those people, who are often in fuel poverty?
Yes, we want much greater integration in the Government’s various policies, certainly the ones that we inherited. We think that before anybody does anything they should improve the energy efficiency of their home. That obviously presents particular problems for people in rural areas, which is why the green deal will include a substantial element of annual subsidy through the energy company obligation, which will particularly help those with solid walls and in off-grid and rural areas.
Given that the installation and registration deadline for the existing tariff is 11 days prior to the close of consultation, will the Minister confirm whether it is a new Government policy to consult on things despite having already fixed a deadline? If, on the other hand, the consultation finds that the deadline is inappropriate and the Government reach that conclusion after listening to the public, what will they do about those who fall into the gap in the meantime?
This is a difficult issue. The hon. Gentleman will appreciate that we are trying to save the budget. If we were to leave this scheme open until next April, as we had originally intended—although we said that we would act if there was an urgent need, and there is—there would be a run on the fund. The cut-off date will be 12 December, but people will not get a reduction in tariffs until April. It is complex. It is driven by the fact that there is a run on the budget, and we are acting responsibly to preserve the budget for lots of other consumers and to ensure that it does not just disappear in the next few months.
Will the Government explain how our policies compare to those in Europe where feed-in tariffs have also become unaffordable?
Of course, in socialist Spain we have seen boom and bust writ large, with the entire solar tariff scheme collapsing, causing a complete run in confidence. Elsewhere across Europe, we have also seen massive falls in solar prices. The more nimble, smarter tariff schemes have adjusted down their tariffs. We aim to get ours on a par with something similar to that in Germany.
Proven Energy, a firm in my constituency, went bust because of the inadequacies of the planning regulations for small wind energy. For that reason, the 55 people now on the dole do not accept the Government’s proposition that they are the greenest Government ever. What evidence can the Minister give me that today’s announcement will be any different from previous commitments and that this is not just empty rhetoric with no substance?
It will not be a surprise that I disagree strongly with the hon. Gentleman. We are the greenest Government ever. This is the Government who have put £3 billion into a green investment bank; who have cut their emissions by 13.5%, despite Opposition Members saying that it was not possible; and who are backing green energy and have an ambitious plan for a whole range of technologies, and who are not one-club golfing.
Order. May I remind the House that Members who were not here at the start of this exchange should not expect to be called?
I understand the necessity of ensuring a sustainable scheme, but will the Minister assure me that the voices of small companies such as C. Gascoigne, a family-based electrical installation company in my constituency, will be heard as part of the consultation and that it will not be left just to the big companies to set the policy?
Absolutely. It is because we value the work of small and medium-sized enterprises and smaller companies that we do not want many of the larger companies simply to gobble up the whole budget within months. We will be listening carefully to SMEs and trying to provide a sustainable pathway that they can build on.
I believe that the Minister is aware of Brighton energy co-op in my constituency, which uses investment for local people for community-owned solar panels. The project’s director is deeply concerned about the impact of these new proposals. Will he offer a stay of execution for community projects with planning permission so that they can get up and running and not be bound by the December deadline?
One of the faults of the scheme that we inherited from the Labour Government was that there was no way of recognising within the tariffs any sort of community scheme. One way in which we will reform the scheme will be to consider creating a special tariff for community schemes, which were totally ignored in the system set up by Labour Members.
Will the Minister reassure the House that anyone on the existing feed-in tariff will not see it reduced?
Absolutely; these changes do not apply to anybody already claiming the tariff.
The hon. Gentleman knows that I have been campaigning for those off the gas grid. Many people who do not have mains gas pay the highest winter fuel costs; is there a possibility that those who have moved over to PV will be looked at specially? Is there a special discount for people who do not have mains gas?
There is no special discount for those off mains gas, but obviously the counter-factual makes the offer even more attractive for them. I would encourage those such as the hon. Gentleman’s constituents who are off-gas not only to look at solar PV, but to look at the renewable heat incentive and the renewable heat premium payments, which are already out there, and to see whether they can apply for some of the vouchers for the range of technologies that will help them with their heating, which will form a much larger proportion of their annual energy bills than electricity.
I very much welcome the Minister’s comments to the hon. Member for Brighton, Pavilion (Caroline Lucas) about community schemes. May I urge him to look closely at this issue? In my constituency, Wadebridge renewable energy network—which I believe he is aware of—is looking hard at the scheme, which could have huge benefits as the money is reinvested to deliver more carbon reduction schemes across our communities.
We are keen to encourage community schemes wherever we can, but we have a budget to manage and it is clear that demand far, far outstrips supply, particularly with the current, inflated subsidies. We are therefore trying to recalibrate the scheme and put it on a sound footing, to ensure that the money will be available for years to come to support exactly the sorts of schemes to which my hon. Friend refers.
Given that cost is the main criterion, why have the Government not reconsidered the costs of nuclear power, which are ballooning? Is it not true that the coalition has been taken over by the bad science loonies of global warming denial?
That is absolute rubbish. There is no subsidy for nuclear power.
I share people’s concerns about the suddenness of the change and the effect on individuals and organisations that were already planning solar installations between December and April and had budgeted appropriately. One example is Ridgefield, a new primary school in my constituency. Will the Minister consider carefully whether exemptions could be made for deserving cases such as that?
I am afraid it is just not possible to make exemptions in such a system. We need to drive down the cost of solar. We will achieve that by ensuring that people do not price to the tariff but are incentivised to bring down costs. We need to ensure that the fall in costs internationally is passed on to consumers and that the industry does not continue to price to the tariff.
As we see this Government’s credentials as “the greenest ever” crumbling before our eyes, where is the Secretary of State?
This may come as a surprise, but we have a team on this side of the House. I have been leading on this issue, and the Secretary of State is very happy for me to do so. [Interruption.]
Order. This is not said pejoratively, but I have noticed that whenever the Minister is in the Chamber, Opposition Members seem to get very wound up and excited. I do not know whether it is his fault that he winds them up or their fault that they allow themselves to be wound up, but the House needs to calm down a little.
I appreciate that something had to be done about the overly large tariff subsidies, but Electrical and Testing Services in my constituency is worried about the speed of change. What advice and guidance will my hon. Friend give to small businesses so that they can get through the transition period without having to lose any staff?
My hon. Friend is absolutely right to look to the interests of small businesses, many of which were feeling slightly excluded, because of the speed with which larger firms were gobbling up the budget. It is because we want to preserve the budget over the longer term that it will be more sustainable for smaller businesses. However, I would recommend such businesses to look not just at solar PV, but at integrating a range of technologies into their offer—in particular, energy efficiency—and at how they might offer services for the green deal.
Feed-in tariffs should be about more than just solar. What is the Minister doing to help small businesses that are working on innovation and other technologies to compete and to provide a wide range of technologies for people to chose from, particularly when we get into the green deal?
The hon. Lady is absolutely right. The danger was that solar, which was already taking more than 90% of the feed-in tariff budget, would take the whole lot. There are a lot of other micro-technologies out there that I want to see supported, such as micro-hydro, micro-combined heat and power, small-scale wind and small-scale biomass technologies. There are lots of different technologies that we need to come into the system and that also need fair funding. There are, of course, opportunities in the comprehensive reviews to look at the support for other tariffs, and we may even consider raising them where they act as an insufficient incentive to bring on those other technologies.
The Minister may be aware of a recent research paper produced by the Parliamentary Office of Science and Technology, which estimates that solar produces three times as much carbon per kWh as other renewable technologies such as wind and nuclear. Why are we subsidising solar more than the others?
I am not aware of that particular paper, but I have to say that I remain a fan of solar. The issue is about the cost of solar. The fact is that it currently attracts four times as much subsidy as any other form of renewable generation. It is not viable to have a mass roll-out of that technology when costs are still that high. We need to bring the costs down. When we get to that point, we will see a mass roll-out in the UK—but not before costs have been brought down further.
The Minister has not answered one important point made by my right hon. Friend the Member for Don Valley (Caroline Flint)—that he has buckled under pressure from the big six energy producers. Is it not the truth that they make money out of selling electricity and they do not want competition?
That is why, unlike the previous Government, we are bringing forward transformational proposals as part of our electricity market reform. We have already had one Energy Bill in this Parliament; another will be along shortly.
I fully appreciate that the previous Government intended to reduce feed-in tariffs at some stage. However, what assessment does the Minister make of the effect of this announcement on small and medium-sized enterprises that have flourished in installing solar PV over the past couple of years?
They have flourished only really in the last few months. The rate of deployment doubled between September and June. We are seeing an extraordinary bubble that has grown over the past few months. Of course, these enterprises will see their order books reduced relative to the past few months, but we need to put them on a sustainable footing. A lot of people in the industry have raised such concerns privately with me. Anyone who talks to solar producers knows that they realise that there needs to be responsible and sustainable growth, not a quick burst.
What about the 100 jobs lost and the effect on 4,000 households in Stoke-on-Trent as a result of what seems to be retrospective legislation through consultation? Surely the Government should do the right thing and allow at least those applications that are in the pipeline not to be affected so severely by any change in tariff.
It is our judgment—it is a matter of judgment; I do not pretend that we have it absolutely right—that the 12 December cut-off date is a fair assessment of how long it will take those currently in the system to get through to deployment. That is why we landed on that 12 December cut-off date, but I appreciate that there might be individual exceptions to that rule. I say to the hon. Lady that this is about creating a sustainable future. The Labour party accused me earlier in the spring of butchering the solar industry, since when deployment has trebled.
Small companies based in and around my constituency are concerned as they feel that they stepped up to the plate as the Government asked them to do, and created growth, businesses and jobs—yet they now face an uncertain business model going forward. Will the Minister agree to meet me and small business owners in this industry in my constituency to discuss the practical impact of these changes?
I am happy to meet my hon. Friend, but he must understand that the one thing that would be absolutely wrong would be to encourage these firms to rush forward in a burst of growth knowing that the money would run out in a matter of months. A sustainable pathway for growth is what they need.
On a day when the Government are saying that they are in favour of jobs and growth, I find it extraordinary that the Minister is standing at the Dispatch Box and criticising Labour Members for arguing for small businesses which have invested on the basis of Government policy. These businesses will be completely shafted in six weeks’ time by his decision not to implement a satisfactory stable investment framework. What impact does he think his decision today will have on future investment in the solar industry in the UK?
I find this scaremongering and doom-mongering from Labour Members to be absolutely reprehensible. We are taking the scheme back to the same rate of return as when it was launched 18 months ago. We are simply trying to reduce the bubble created by the ineffective scheme set up by Labour. We believe in a sustainable path for growth, not in boom and bust like the Labour party.
Will the Minister confirm that the cost of solar installation has fallen by 30% in less than two years? If that is the case, is it not right for feed-in tariffs to be adjusted accordingly?
My hon. Friend is right, and in fact the cost of some systems has fallen by much more than 30%. Bloomberg estimates that the cost of some of them has fallen by more than 50%—indeed, by up to 70%. This is not a United Kingdom phenomenon; prices have tumbled spectacularly throughout Europe. However, because of the ineffective system that we inherited from the Labour party, there was no way in which tariffs could keep pace with that.
The last fast-track of the solar feed-in tariff was derided because nothing—I repeat, nothing—changed as a result of the consultation. This consultation will end after the date of the start of the new scheme. May I ask the Minister, in all seriousness, what impact assessment he has made in relation to the number of community schemes that are currently in progress but will not proceed as a direct result of his proposals and the 12 December deadline?
I am grateful to the hon. Gentleman for his question, because it was he who accused me of butchering the industry after the last review. Since then, deployment has trebled. He was wrong earlier in the year, and he will be spectacularly wrong again. He will know that because of the way in which the system was set up under the—[Interruption.] If hon. Members will calm down slightly, I will answer their question. Perhaps they will allow me to get the words out.
The fact is that the way in which the system was constructed—[Interruption.] I am trying to give the answer. Because of the way in which the system was constructed, there is no way of rewarding community schemes. There is no tariff for communities. There is no way of distinguishing between a City hedge fund manager and a village hall because of the way in which the system was constructed by the last Government. We will try to change that so that we can specifically recognise community schemes, and we will consult on that work.
I must declare an interest. We recently had solar PV installed on our roof. The people next door saw it, and they now have it as well. I understand that the scheme has been a victim of its own success, but how confident is my hon. Friend that the change in tariffs will not cut off the growth of, and interest in, solar PV as a source of renewable energy in other households?
Obviously there is a difficult balance to be struck, and I know that many firms will find it difficult to navigate the system, especially in the short term. I must make it clear, however, that it would have been wrong to do nothing, and to allow the whole budget to be burnt through in a matter of months. Had we done that, the industry would have been looking at oblivion, but now, thanks to timely intervention, it can look at a sustainable pathway to growth.
What would the Minister say to the work force and management of Kingspan, a firm in my constituency that manufactures solar panels and solar cells? A representative of that firm told me on the telephone this very morning that the effect of the Minister’s decision on pre-order contracts will cost it £12 million between January and April next year. Is that the way to improve manufacturing industry in Britain?
What I would say is that we intend to reduce tariffs to levels comparable with those in Germany, which has the highest level of renewables deployment in Europe. We are lowering tariffs to encourage market competitiveness. Kingspan is a great company that manufactures a range of products, not least insulation products, which will benefit from a boom as a result of the roll-out of the green deal between now and 2020.
I note the need to recalibrate and safeguard the budget, but does the Minister agree that it is important to encourage local councils to create the right framework for investment in a package of energy-saving measures?
Absolutely. We must get away from the silo culture that concentrates exclusively on solar PV, on the technological flavour of the month, or on one or two types of intervention. We need an holistic approach to energy measures, the most important of which is energy efficiency and the least important the generation of electricity. The right hierarchy consists of energy efficiency, then heat, then renewable electricity, and local authorities are key partners in that regard.
The Minister said at the solar photovoltaics conference last Friday that he had not come to kill solar PV tariffs. Does he accept that these appalling policy lurches—two in the past three months—are killing the solar industry’s future, as was reflected by all those present at that conference? Will he now review the time scale for the most recent lurch, and at the very least extend it so that those who currently have contracts up to when there was originally going to be a review can carry out that work? Otherwise, no one will ever believe anyth