Wednesday 14 March 2012
[Mr James Gray in the Chair]
Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Newmark.)
It is a pleasure to serve under your chairmanship, Mr Gray; this is the first time that I have done so in a leading role.
I am pleased to have secured the debate, which covers an issue that is important to me and certainly to the people I represent in Winchester and Chandler’s Ford, as well as to people across the country. I am pleased that so many of my colleagues have turned out this morning. I suspect that the postbags of many right hon. and hon. Members suggest that the topic is important to their constituents, too. The issue is about the strivers in our constituencies. I am not sure where that term came from, but it seems increasingly to be a feature of the political spectrum.
It is frequently asserted that we are a nation of home owners, as well as a nation of shopkeepers. Home owning, or striving to own one’s house, makes financial sense. It brings independence and is a source of great pride for many. It was Anthony Eden who first set out the noble vision of a nationwide property-owning democracy, and for much of the 20th century home ownership steadily increased. That was a good thing. There has been a striking increase in recent years in the number of people, particularly in the younger generation, opting to rent instead of buying, as property prices have shot up, deposit requirements have rocketed, and the economic outlook has remained uncertain. People’s aspiration, however, one day to own a property of their own remains as strong as ever.
I had an acute reminder of that yesterday, when I was proud to cut the ribbon in the Dell—not that Dell—the old Dell in Willis Waye in Kings Worthy. There are 29 brand new homes, which have been built by Homes and Community Agency partner Radian Housing, with a nice mix of shared ownership and rental, constructed to the highest standard possible, using local architects. I was fortunate enough to meet some residents yesterday, and they do not see home ownership as an unnecessary burden; they are proud as Punch to live in the Dell. I am proud that we have a positive Conservative city council in Winchester, with a forward-thinking portfolio holder in Councillor Tony Coates, and people such as my colleague Councillor Ian Tate on the planning development control committee; they have a passion to help the people we represent to realise their aspiration to own their homes.
I congratulate my hon. Friend on securing this important debate. Opportunity for first-time buyers is extremely important to all Members, from all constituencies, so is my hon. Friend a little surprised, if not concerned, at the lack of Opposition Members here to support the debate, which affects their constituents?
Yes. My hon. Friend tempts me. The turnout in debates in the House and Westminster Hall is a matter of fact and public record, not my judgment; that is for others. However, I thank my hon. Friend for pointing that out.
I mentioned aspiration and I shall say the word again—as, I am sure, will many of my hon. Friends. That is the starting point for me. The Government should exist to help people to realise their aspirations: not through a handout—although, yes, sometimes—but often through a hand up. The debate is unapologetically, for me, about our values. Politicians do not talk enough these days about what they believe in. It is as if ideology has become a bad word, and it is suddenly a crime to say what drives us. Of course policy making and implementation is about the head, but it must also be in equal measure about the heart. Why do we want to be in this place? Why did my party, and many hon. Members who fought seats for longer than I did to get here, work so hard to return our party to government and run the country, if not to pursue our mission? Part of that mission and why I wanted to come here was to help people to own their home. I do not accept that that is somehow to let people aim higher than they should be allowed to by the state. I know that Conservative Members utterly reject that.
I congratulate the hon. Gentleman on securing the debate. Does he also accept that the question goes deeper than simply owning a house? The ramifications of denying first-time buyers the opportunity to buy property affect the community as a whole. Where I come from in west Wales the issue is that young people are moving away from our communities; they cannot educate their children in local schools, and there are other community aspects.
Absolutely. We have often debated the future of sub-post offices, pubs and primary schools where falling rolls lead to changes and school reconfiguration. There is a need for new people to enter communities, to regenerate them. I ask hon. Members who are home owners to remember when they first walked into the first house they owned, and the excitement of that. We may remember how exciting it was as a child to play house; but that was playing house for real. I remember how exciting it was, and I want other people to experience that excitement. That is what the debate is about, which brings me back again to that word “values”.
I want to outline the scale of the current challenges to the UK housing market, and the difficulties that young families and first-time buyers experience in taking their first tentative step on to the property ladder. It is a daunting challenge. Since 2008, the number of first-time buyers has declined from a long-term average of about 500,000 a year to just 200,000. One of the key factors accounting for that is, of course, the astonishing rise in average house prices relative to earnings in the past 20 years —even taking into account the slight decline in prices in more recent years. I emphasise the word “slightly” because the situation in the part of the world that I represent may be different from that in some other constituencies.
I congratulate my hon. Friend on obtaining this debate on an important issue that affects so many of our constituents. I am not an expert on house prices in his area, but High Peak is a particularly beautiful rural area, and consequently house prices are disproportionately high, so it is even harder for first-time buyers to get on the ladder.
I thank my hon. Friend, who argues passionately for rural housing in his constituency. The changes that the coalition Government are bringing in—the neighbourhood plans that will be part of the localism agenda, which will work with the council’s local plan—are critical in achieving local buy-in to add stock sensitively and to increase supply in rural areas. That is not to impose, but to enable local planning, through the neighbourhood plan process, to increase supply, so that local people who have grown up in villages can afford to stay in them. That is critical. The new rules that the Government are bringing in, on local allocation, mean that we can make local homes for local people a reality. I know that my hon. Friend will press for that on behalf of the people he represents.
We know from figures from the Department for Communities and Local Government that between 2000 and 2007 the average UK house price more than doubled, from £106,000 to £214,000. For many first-time buyers, particularly those unable to access finance from the bank of mum and dad—a term that I suspect we shall return to over the next 90 minutes—those high prices have either delayed or ended hopes of owning bricks and mortar. In Winchester, the mean house price in the third quarter of 2011 was £368,500, whereas the mean price for England in the same period was just £245,000. The problem is particularly acute in my constituency.
It is a widely accepted fact of economic reality that house prices are high partly because housing is in relatively short supply in this country. As for the future, I know, having listened to Communities and Local Government questions on Monday, that the Government do not like to make forecasts of house building; but they must surely look carefully at what has happened in the past. In 2007, there were 178,000 housing starts, but by 2009—the last full year of the previous Government—that figure had crashed to just over 78,000. In 2011, the first full year of the coalition Government, it had risen to just over 98,000—a rise of 25%—but we are still clearly well short of where we want and need to be. Building more new, affordable homes should clearly be a priority. I hope, for all our sakes, that the new incentive-led, plan-led approach combined with policies such as the new homes bonus and genuine local buy-in through neighbourhood plans will make a significant difference.
As I have said many times in my constituency and in the Chamber, the stick approach to increasing supply has failed. Under the previous Government, house building fell to its lowest level since the 1920s. My aspiration for the new system of localism is simple: local authorities will step up to the plate and stop looking to London for their orders and work with local communities to deliver the homes that their area needs.
When I talk to people in my constituency—I am sure that Members from across the House will recognise this point—it is clear that they recognise the facts; they understand that we need to build new homes because they know that the people who are looking for those homes and who are locked out of the system are their children and their grandchildren. My children are aged four and one, so they are obviously a long way from owning their own home. None the less, that is what I want for them one day—actually at 5 o’clock this morning, I felt that it would be a good idea right now. I want them to be able to stay near mum and dad, perhaps not too near, but relatively near.
People in Winchester do not want housing estates forced on them that are so big that they can be spotted from the lunar surface, and that are without the support services a community needs when it accepts 200 or even 2,000 new homes. They want to be involved. When we involve people, we find that they take the right decision for their community. That is what localism is about; nothing more and nothing less.
I welcome the coalition’s plan to release public sector land with the capacity for up to 100,000 new homes, and the £400 million that the Treasury has put into the get Britain building fund to support firms in need of development finance. I look forward to hearing more from the Minister about her aspirations in that respect.
Although the housing shortage and high prices have conspired against first-time buyers, undoubtedly the biggest obstacle is the size of the deposit that is required before a mortgage can even be considered. The Council of Mortgage Lenders has estimated that the average deposit for a first-time buyer now stands at more than £26,000. That represents 79% of the average annual income from which the mortgage is paid.
A constituent wrote to me last month:
“All the mortgage providers we have spoken to have offered 5% deposit mortgages but these come with massive consequences, such as interest rates which would make monthly payments the same as one of our monthly salaries, or a family member/friend who would invest £35,000 for three years to stand behind the loan. I don’t know about you, but we don’t know anyone who could spare £35,000 that they wouldn’t touch for 3 years, do you, Steve?”
No, Steve doesn’t, and that is the problem; I wish I did.
As the credit crunch took hold in 2007, liquidity dried up and more restrictive lending took hold. Thus, even though house prices have started to fall slightly in recent years in some areas, challenging funding criteria have meant that ever larger deposits are required, making the dream of home ownership for many first-time buyers nothing more than a remote fantasy. Add to that the rising costs of living and job uncertainty, and the picture can appear bleak for aspiring home owners.
In preparing my remarks for this morning’s debate, I asked myself whether we had a Government who were prepared to wash their hands of these young people. Do we have a Government who prefer to walk on by, on the other side of the street, and consign a generation of young people to a life living with mum and dad, which can have benefits; sofa-surfing, which does not have benefits; renting in the social or private sector, which works for many; or even, in extreme cases, homelessness? If I thought for one moment that this Government took that view and wanted to turn their back on young people, I would be their fiercest critic and we would be having a very different debate today. Yes, there are limits to what Government can do, especially with a national debt the size that we have, but there are a number of actions that can be taken to boost Britain’s housing market and to assist first-time buyers in getting a foothold on the first rung of the property ladder.
The most important step the Government have taken to support greater home ownership is their commitment to ensuring that interest rates are kept as low as possible for as long as possible. They are getting to work on tackling the national structural deficit. It is a factor that is easily overlooked, but without a credible plan to put the public finances on a stable footing, the inevitable higher interest rates that would result would also lead to higher monthly mortgage payments and increased repossessions. That key point should never be understated.
As well as maintaining the conditions necessary to secure a low interest base rate, the Government have introduced a range of initiatives designed to support prospective first-time buyers to own their own home. With the sort of timing that I could not have planned for—for the record I did not—two key announcements were made this week. The NewBuy guarantee scheme tackles the deposit problem head on, and I am pleased to see that it is led by the Home Builders Federation and the Council of Mortgage Lenders.
At the launch this week, the executive chairman of the Home Builders Federation said:
“NewBuy will help thousands of people to meet their aspirations to buy a new home, freeing up the housing market and helping first-time buyers and those unable to take the next step on the ladder.”
Paul Smee, the director general of the Council of Mortgage Lenders said:
“These mortgages will help creditworthy borrowers. It is good news for home-buyers and potentially good news for jobs and the wider economy too.”
Mortgage applicants are typically required to give a deposit of between 15% and 20% at the moment, whereas NewBuy makes it possible for first-time buyers and existing home owners to get a mortgage on a new-build property with only a 5% deposit, without all the strings that my constituent told me about earlier. With that new deal, instead of having to save a deposit of between £30,000 and £40,000, first-time buyers will now need only £10,000. The scheme indemnifies lenders against a limited amount of any future losses, opening up mortgage lending and stimulating demand for newly built houses and flats.
Only new homes built by house builders signed up to the scheme will qualify, but I am told that most of the major and many of the smaller builders are in the process of registering. Yesterday, I was encouraging Radian Housing to be part of the scheme, and it told me that it already was, which was excellent news.
Under the scheme, individual home builders will partner up with one or more mortgage lenders who will offer loans of between 90% and 95% on their properties. Let me stress that NewBuy has nothing to do with sub-prime lending, when mortgages were given to people who could not afford the repayments. Mortgages of 95% operated perfectly well in this country for many decades, and the criteria for lending are now much stricter. Nobody will get a mortgage who is not able to pay for it.
My hon. Friend is making an important point because there have been one or two concerns about that issue. Will he confirm that the Financial Services Authority will be watching this extremely closely? The scheme has been through a rigorous regulatory route, and there should be no concerns about comparisons with some of the sub-prime activity.
Yes, the FSA is monitoring the situation very carefully. There are some new lenders coming on to the market who are keen to step up to the plate, and the FSA is treating them with all the due care and diligence that we would expect. I know that as chair of the all-party parliamentary group on Citizens Advice, my hon. Friend takes a great interest in the matter, and I thank him for coming along this morning.
Nobody will get a mortgage who is not able to pay for it, not only at today’s low interest rates but at interest rates that will possibly rise at some future point. NewBuy is most welcome.
I thank my hon. Friend for organising this debate. While we are on the sub-prime crisis, is it not the case that we need to ensure that we do not have a situation in which people are borrowing 120% of their salary, which they clearly cannot afford, or self-certifying their earnings? Those aspects of mortgage lending led to the sub-prime crisis. Here, the focus must be on affordability first.
Absolutely. Affordability is the key word. One of the key lessons that must be learned from what happened in 2007 is that affordability must be at the heart of mortgage lending. That is why I am so pleased that the Council of Mortgage Lenders is backing this scheme. Obviously, through its lenders, responsible lending will be the watchword, but affordability is critical.
NewBuy is most welcome. I have taken great care to inform many of my constituents about it already and I understand that the website NewBuy.org.uk has, unsurprisingly, been very busy in its first 48 hours. Although I welcome it, I will just make this point to the Minister. Many first-time buyers will welcome any home, and a new build ticks many boxes, but I urge her to work with colleagues at the Treasury and in the Department for Communities and Local Government to explore ways in which we can extend NewBuy to not-so-new-buys because not all mature properties are thatched cottages worth a couple of million pounds, and sometimes first-time buyers do not want to choose a new build. There is much housing stock out there that could come on to the market, especially as we change the rules on assured tenancies.
Does the hon. Gentleman welcome the initiatives taken by some local authorities to develop their own local authority mortgage schemes? My local authority, Ceredigion, is pursuing that, and it is also being pursued in Conwy—I say that to add a slightly Welsh dimension to this debate.
I see absolutely no reason why such initiatives should not be developed; I suggest that they are a key part of localism. Perhaps I will rather unfairly pass the hon. Gentleman’s question on to the Minister, because I see no reason why a responsible local authority setting up an accredited scheme such as that could not be part of the NewBuy scheme. I thank the hon. Gentleman very much for making that point.
I turn to right to buy, which, as we know, has been relaunched this week, with all the passion and enthusiasm of its creator, the former Member for Finchley. To this day, I meet people every time that I knock on doors on the big estates of Winchester who were given the chance to join the property-owning democracy by that lady and her policy when it was introduced the first time around. I am extremely proud that my party made that possible. The subject even comes up in conversation from time to time—started and prompted by me. I am extremely proud of that policy and we should never stop saying that we are proud of it.
I am delighted that the Government are ploughing ahead with their task of reinvigorating the right-to-buy scheme, by raising the maximum discount available from the current limit of between £16,000 and £38,000 to £75,000. Every home that is sold under the scheme will be replaced by an affordable home for rent. I am sure that the Minister will want to elaborate on the fine details, but I can report to her good news from the Queen’s own land of Winchester, where the Conservative-led Winchester city council has recently confirmed plans to build the first new council homes in the district since the 1980s. Those plans have been met with great excitement by local people. With 4,500 people on the city council’s waiting list, the plans are great news and, as the city’s MP, I could not welcome them more. I pay great tribute to the work that the Treasury has done with the Department for Communities and Local Government. I believe that it is a £19 billion deal to allow authorities such as Winchester to get themselves out of the housing revenue account—the so-called “tax on tenants”. That deal is making the new policy possible.
We often hear that the Government are taking us back to the 1980s, and dare I say that that is not said in favourable terms by some Members? As a child of that decade, I can see no problem with a return to music that people can really dance to. Seriously, however, if that kind of time travel gives us back the right to buy, as well as new council homes in Winchester and across this country, I say, “Bring it on.”
Let me refer again to the new homes bonus, whereby local authorities will be financially rewarded for delivering new housing, with matched funding based on new council tax receipts. For the first time, a premium for affordable homes will be included and the next sets of allocations have already been announced. Winchester is due to receive more than £1 million in allocated funding, which I am sure will be welcomed by city councillors of all colours. May they use it wisely and to maximum effect; that would be my message to them from Westminster Hall today.
I would like to probe the Minister a little on one issue in particular before I close. In 10 days’ time, the stamp duty holiday for first-time buyers will end, so any first-time buyer who buys a home worth between £125,000 and £250,000 must pay the 1% stamp duty tax. Evidence given to me—I must say that it is from Charters estate agents in Winchester—suggests that first-time buyers are moving quickly to avoid the tax. The head of mortgages at HSBC has reported that HSBC has seen a 20% increase in approvals for first-time buyer loans in the first six weeks of the year, as first-time buyers rush to take advantage of the stamp duty holiday.
I mentioned Radian Housing earlier. It operates the HomesinHants website and it told me yesterday that that website was receiving some 78,000 hits per day in January and February of this year compared with just 67,000 hits per day in the same two months of last year. It also says that many of the inquiries that it has received are from first-time buyers, who have been encouraged to get a move on by the stamp duty holiday.
I realise that there is a view in the Government that this stamp duty holiday has not been a huge success everywhere, but I ask the Minister in her reply to the debate to expand on that issue some more. It seems logical to me, and constituents have reported as much to me as their local MP, that in some areas and in some markets, this holiday can provide a nudge to the market and free up cash for those who take the plunge to spend that extra money elsewhere in the economy. In saying that, I appreciate that the Winchester housing market is different from some other areas of the country, to put it mildly. Nevertheless, I look forward to hearing the Minister’s response.
I will make one final point that seems odd to raise in a debate about Government help for first-time buyers—about interest-free loans to help employees with the cost of a rail season ticket. To say the least, the amount available has not kept pace with fare rises on the service from Winchester and Southampton to Waterloo, for instance, and for many of my constituents this outgoing is now one of the largest that they face each month. I believe that the Government need to look urgently at the interest-free loan figure; I have tabled questions to that effect. I would welcome the Minister’s comments on that, which will probably come in writing after the debate.
In conclusion, giving people the chance to own their own home is one of the best things that a Government can do for their people. My parents’ generation saw owning a home as a rite of passage, but it is more complicated than that these days, for many of the reasons that I have outlined this morning. In my opinion, young people have every right to believe that, if they work hard, do the right thing and save, they have a Government on their side and they can get on the property ladder. I welcome the steps that the Government are taking to reinforce and, yes, to lower the bottom rung of that ladder. I look forward to hearing from my hon. Friends in the debate ahead and, of course, to the Minister’s reply in due course.
It is always a pleasure to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend the Member for Winchester (Steve Brine) on securing this important debate, and I am very happy to echo all the views that he has ably expressed this morning.
I will make a few comments in particular about the Government’s Firstbuy and NewBuy schemes, as they are of special importance to my Milton Keynes constituency and, indeed, to the whole of Milton Keynes. For Members who do not know, Milton Keynes is a new town that is still very much growing; we have not yet reached our desired size. Indeed, we may become a new city in the fullness of time. We are awaiting the announcement of the diamond jubilee city with bated breath.
As I say, Milton Keynes is continuing to grow rapidly. We have more than 20,000 housing permissions already in place, and that is before we look at potential additional expansion areas. Figures from the National House Building Council show that monthly new starts in Milton Keynes run at a rate that is three to four times the national average. Despite the fact that there is certainly a good supply of new housing stock in Milton Keynes, there are still difficulties for people who want to get on to the housing ladder. As well as growing in housing numbers, the town’s economy continues to grow, so there is substantial inward migration to Milton Keynes, which of course puts additional pressure on the housing stock. For example, the new Network Rail national centre will open in Milton Keynes later this year. That is generating 3,000 jobs, about 1,000 of which will be generated locally, but about 2,000 people will come in from elsewhere in the country. That pushes up the demand for housing.
Also, there are issues from a demographic perspective. The first main expansion of Milton Keynes took place in the 1970s and 1980s, when, by and large, young families came to settle in the town. Now the children of those families are at an age when they want to get on to the housing ladder. So these two measures—the Firstbuy scheme and the NewBuy scheme—will have particular resonance in Milton Keynes, as they will help people on to the first rung of the housing ladder.
My hon. Friend the Member for Winchester referred to the Council of Mortgage Lenders, which has published a statistic that is very relevant to this debate: 85% of people aspire to own their own home. It is engrained into our national psyche that owning a home is desirable and, indeed, the right thing to do. Owning a home gives us a sense of stability and community. So it is absolutely right that the Government are taking all these steps to make owning a home as easy as possible, without—as my hon. Friend said—getting into the dangerous territory of unaffordable mortgages, which helped us to get into the financial mess that we are in. As I say, I will not repeat the very sound points that he made; I will just echo them.
I will also make some additional points about how these policies tie in to our localism agenda and our wish to develop sustainable communities. There has been a trend whereby we have had new housing developments, particularly flats, and a large percentage of the new properties have been bought up by people making buy-to-let investments. There is absolutely nothing wrong with that—it is a perfectly valid investment option—and there is absolutely nothing wrong with the private rented sector, which fulfils an invaluable role in the mix of housing stock that we have in our country. However, I have certainly noticed in Milton Keynes—it may be prevalent elsewhere, too—that so many of the properties, particularly the flats, in those new build estates are buy-to-let investments that there is a huge turnover of occupants. That makes it more difficult for a new community to build a sense of well-being and for the roots of community to be established. That is not impossible, but it is more difficult when there is a constant turnover of tenants. It is a question of balance.
I should like policies to assist a greater proportion of new estates, particularly new flats, to be owner-occupied, so that the bonds of community can more easily develop. That is a feature that characterised Milton Keynes when it first grew. It is often falsely characterised as a soulless place with identikit housing estates. The reality is different. There is a rich sense of community, generated by the people who came to the new areas of Milton Keynes at the outset and who wanted to build a new place together. Although the housing stock was new— 20 years before, the area was just open fields—a rich community quickly developed.
My hon. Friend is absolutely right about the bonds of community. Does he agree that encouraging first-time buyers with the policies that the Government are proposing will have huge and positive knock-on effects down the line? He has talked about bonds within the community, but the policies would also free up more private and social rented accommodation, and that would have a real impact on homelessness, which is rising in North Yorkshire at the moment. Such policies would feed down the line and have positive knock-on effects across the board.
My hon. Friend makes a powerful point. I will be making a few additional points about how the policy will interact with the social housing sector. I congratulate my hon. Friend on making that point.
On localism and building sustainable communities, we need to get away from simply building new flats as the primary housing stock, which was a feature of the old top-down system. Local authorities were given targets for new houses, and the easiest way to fulfil the target was to build blocks of flats. There is absolutely nothing wrong with flats; they have their place. I live in a flat in my constituency—there is nothing wrong with it—but the situation has got out of proportion.
Does my hon. Friend agree that when local authorities give planning permission for such developments, the future of a community that involves children should be considered? We need appropriately sized houses for families. First-time house buyers will presumably get married and start families. Once people start families, we get community cohesion with schools, pre-schools and play schools and so on. That really does create a family community on new housing estates.
My hon. Friend makes an excellent point. The new neighbourhood plans in the Localism Act 2011 will help enormously. Having a proper mix of housing stock in an area will build up a sense of community.
My last point concerns how we can develop policies in future. I absolutely agree with the scope and direction of the two policies I have mentioned and the right to buy. As my hon. Friend the Member for York Outer mentioned, there is a link with the social housing sector. Even with additional help, taking out a full mortgage will still be beyond the means of some people. My wish is to see a much more flexible transition from social housing to owner-occupancy. We have had the shared-ownership scheme for some time, which has been successful up to a point, but it is a little limited in its scope. As we move forward, I want a scheme—this is a long-term plan over 20 or 30 years—whereby it will be easier for people who cannot afford a full mortgage at a particular point in their life but might be able to afford, say, a quarter of the equity of the house to take that. I want a flexible scheme so that, as people’s circumstances change, they might be able to build up more and more of the equity to reach full owner-occupancy later on. There are many suggestions about how we get there. I just want to put that on the table for the Government to consider and to build on what has been an excellent set of policies to help young people on to the ladder.
I will conclude my remarks now; I know that others wish to contribute. Once again, I congratulate my hon. Friend the Member for Winchester on securing this excellent debate.
I, too, congratulate my hon. Friend the Member for Winchester (Steve Brine) on securing this debate today. Buying a property for the first time is a huge undertaking for anybody, but doing so has become increasingly difficult, as we have heard, in the current economic climate. This issue affects my constituents in South East Cornwall. We have heard that it also affects the constituents of many hon. Members.
First-time buyer numbers have tumbled to levels not seen since 1974, with only 200,000 recorded first-time buyers in 2011, compared with 400,000 in 2005. People trying to get on the property ladder are struggling to do so, owing to the increase in house prices. The average UK property price increased from £163,000 to just below £165,000 in 2011. This correlates with the rising price of deposits, with many people needing to save for years to cover the cost.
Does my hon. Friend agree that we should be worried about not only the falling number of first-time buyers, but the age of those first-time buyers? That is evidenced by the increase in deposits required. People have to get to a much greater age before they manage to save up the deposit.
I was going to come to that point a little later. In fact, my hon. Friend is probably psychic. This is not purely an issue that affects young people; the average age of first-time buyers is 35.
The major issue is the fact that house prices are continually rising. Prices on the Nationwide index rose by 0.6% in February, and prices were 0.9% higher in February compared with a year ago. The house price to borrower’s income ratio has been gradually rising since 2007, making it harder predominantly for first-time buyers. Another issue is that the number of mortgage approvals has remained generally flat since early 2010, at below half pre-recession levels. Housing starts have increased since the recession, but still remain below pre-recession levels. The Government have recognised this issue. They have pledged to alleviate the struggle for first-time buyers, and I congratulate the Government on that.
In November, the Conservative-led Government launched a scheme to underwrite mortgages worth hundreds of millions of pounds for new homes. A central part of the new housing strategy is the £400 million get Britain building fund, which pays for the construction of up to 16,000 new homes. The fresh drive could result in a further 100,000 homes being built, so creating 200,000 jobs.
I also congratulate the Government on the two new initiatives that were launched this week, which will be crucial to aid first-time buyers. The NewBuy scheme makes it possible for first-time buyers and existing home owners to get a mortgage on a new build property with only a 5% deposit, as opposed to the 15% or 20% that we are used to. This deal means that where buyers have been typically required to save a deposit of between £30,000 and £40,000, they will now need only £10,000. The other scheme—it has been mentioned by previous speakers—is the right-to-buy scheme, which will enable council tenants to buy their homes at a discount and increases the maximum discount cap for tenants to £75,000. That will provide tenants who have the right to buy or preserved right to buy with a real incentive to buy their home, and that is no bad thing.
The schemes will make a big difference to the lives of constituents such as mine in South East Cornwall, where things are particularly hard for first-time buyers. Cornwall is a popular tourist destination, which attracts more than 5 million visitors each year. That has artificially raised house prices in my constituency, as it has become attractive to affluent people from all over the country buying homes or second homes. The average house price in Cornwall is £216,000, according to the Land Registry for England and Wales. That does not seem too high, but compared with the annual average wage in my constituency, it is very expensive. Average annual earnings in Cornwall are just under £21,000, well below the averages for the south-west and for Britain. That makes it hard for first-time buyers to come up with a deposit for a house or flat, as they are competing with wealthier holidaymakers who can afford properties in South East Cornwall. That is where the NewBuy scheme will have a positive impact.
The story was different 20 years ago. When I moved to my village from Stoke-on-Trent, I could buy a property that needed renovating. Although even then there was a massive difference in property prices, I had the opportunity to buy my own home. Sadly, young people in South East Cornwall do not have that option, as the older properties have already been sold and renovated. The situation is different from when I purchased a property in the 1980s.
As a Government, we are doing what we can to help first-time buyers. I am confident that the figures will become more encouraging after the Government’s introduction of these fantastic incentives.
It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend the Member for Winchester (Steve Brine) on securing the debate. The subject is important in a week when the Prime Minister has made two significant announcements. At a time when the Liberal Democrats are taking policies in my manifesto and planting a nice yellow flag on them as though they had always owned them, I want to ensure that we claim both those policies as having been born, brought to fruition, made aware and brought to life in the Conservative party, with a big blue sticker on them.
I am proud of what this party has done for first-time buyers, not just since I have been an MP but since I was born, and even since the party was founded. We have always been the party of the first-time buyer. I make no apology for that, and I am proud of it. I know that our critics—sadly, they could not arrive today—normally say that we are opposed to social housing and that we look down on it. Far from it; as my hon. Friend the Member for Milton Keynes South (Iain Stewart) pointed out, we see the importance of the tenancy escalator. We see social housing as a springboard or trampoline, not quicksand from which one should never escape.
There is a reason why that is in our party’s DNA: we are real people with lived experiences. In my family, on my mother’s side, I had relatives living in Myrtle Gardens, a modernist estate in the heart of Liverpool. It was rather like the Karl Marx-Hof in Vienna but, in that part of Liverpool, possibly more left-wing. In the 1930s, it was a model of its time, but by the 1980s and the Toxteth riots, it was a shadow of its former self. What happened? Along came Lord Heseltine, who made sure that Myrtle Gardens was rebuilt and sold off to local people at prices that they could afford, which turned that estate around. In the heart of Liverpool, the Conservative DNA flickered, and we should be proud of that as well.
Council estates should be more than just assemblages of houses where we put people for social engineering purposes, as many on the left have always sought to do. My home village of Weaverham, where many people bought their houses in the 1980s, was two-thirds council estates, mostly for people working in the local Imperial Chemical Industries plant. Looking around, I found that they built a community from within the houses that they bought; they did not rely on someone else to do it for them.
It is clear that after 13 years of Labour rule, the challenges that we face are far different. As other speakers have pointed out, numbers of first-time buyers are falling sharply, from 50% of all house buyers in May 2009 to only 20% now. My hon. Friend the Member for South East Cornwall (Sheryll Murray) cited the age of the average first-time buyer as 35. I heard 37. Maybe we will hear an upwards bid from the Labour spokesman, although I doubt it. That is Labour’s legacy.
Perhaps the most shocking legacy that we inherited was 50,000 statutorily homeless people. We do not mention that figure often enough, as my hon. Friend the Member for York Outer (Julian Sturdy) pointed out. Because the social housing market did not work as it should, we inherited 50,000 people trapped in temporary, substandard accommodation. That is not a legacy of which the Labour party should be proud for one second.
It is no wonder that groups such as Priced Out exist to campaign for people of my generation—20 to 35-year-olds—who are being priced out of the housing market, unable to afford a first house. I was fortunate. I bought in the last housing development in Greater London where prices were still under £100,000. I got in just in time. Another year or two and I would have been the sort of sofa surfer that my hon. Friend the Member for Winchester discussed.
Why should my generation be denied opportunities that previous generations had? We should enable people, not tell them how to live their lives. It is a cultural battle as much as a political or economic one, because it is about the belief that housing policy is somehow about social engineering. It most certainly is not. It is about enabling people to choose how to live their lives. Home ownership is a natural objective for 86% of people, according to the Department for Communities and Local Government. We should not sneer at that or think that it prevents our wider dreams of creating a new Jerusalem. Far from it. True communities come from families having a stake in the society in which they live. That is the nub in terms of policy.
When those on the left criticise our NewBuy policy, I want to take them to Westminster Gardens in Bispham or Hawley Gardens in Thornton in my constituency. The criticism is that we are doing it just for the sake of the house builders. I want to take them around those new estates. Westminster Gardens was being built five years ago, when I was first elected to fight the seat. It is still being built; it is what is called a stalled development. Those who think that we are just trying to benefit house builders should speak to the residents of that estate and find out what is actually going on there.
A stalled development means that the local council will not adopt the roads, so they are left with substandard paving and road quality. They are left with dangers to small children from building sites and higher numbers of road traffic accidents and injuries. Merely to say, “Oh, you’re just doing it for the sake of the house builders” shows once again the failure of the left to engage with people’s lives as they are lived. Once again, it is only seeing the schematics, which is deeply unfair to the people investing in those estates who want them to be completed.
More concerning still is how our social housing market is blocked up, as my hon. Friend the Member for York Outer said. Many social tenants now are not moving through the system. That is why large numbers are stuck in temporary accommodation: there is not sufficient turnover. Labour has almost destroyed the right to buy by tweaking criteria, lowering thresholds and trying to prevent people from buying their council homes. I am sure that Labour Members pay lip service to the concept, but they do not believe in their hearts that owning one’s own home is a good thing. They look on it with suspicion, distaste and almost distrust, which angers me.
I could easily do cheap politics—
I am sure that the hon. Gentleman will get a chance to have a go at me later, and I look forward to hearing it, but since he encourages me, I will talk about union leaders occupying social housing and the fact that here in the royal borough of Westminster, there are 2,000 social tenants who earn more than I do as a Member of Parliament. Perhaps that should give us pause for thought. Perhaps we should reconsider how we use social housing and what it is for. I do not think that it is there to give Bob Crow a pleasant place for life.
I agree entirely. Perhaps we would like to see a gesture from leader of the National Union of Rail, Maritime and Transport Workers as to what he will do in future.
We need to use our social housing stock better, which is why I welcome the Prime Minister’s announcement on enhancing the right to buy. We have to stop seeing our social housing stock as ghettos that we create. When I first moved to London, into the housing development that I mentioned, as ever, the housing developer built the required proportion of affordable housing at the end of a cul-de-sac; there were two rows of cheaper housing. It became ghettoised and stigmatised, as is always the case. We need to move beyond that and to think of social housing as a resource for the use of the community, not areas of a town or village that are regarded as somehow less worthy. That has always been my concern about the social engineering aspect of housing policy, which many Labour Members seem to want to create—communities that they can somehow control. That strategy is desperately wrong.
I am listening with interest to—perhaps “enjoying” is the wrong word—the hon. Gentleman’s comments. In his tour de force on the history of the left and its attitude to social housing, will he return to Nye Bevan and the great period of the invention of social housing in the aftermath of the second world war, and point to who on the left, in the Labour party, thinks of social housing as just a matter of social engineering?
Thank you, Mr Gray. I shall bear that advice in mind.
It is vital that the receipts from the new right-to-buy initiative are reinvested in affordable rented social housing, as I know has been made clear. The key aspect of the issue is the turnover of tenants in social housing. There needs to be an escalator. People may start off in a vulnerable situation needing full tenancies, but they need to be able to move swiftly and quickly on and escalate as high up as they wish. If that leads to home ownership, that is a good thing. However, we need to have fluidity in the social housing market, which we have not had under, I would suggest, any Government. The changes that the Government are announcing this week and those that are contained in last year’s housing Green Paper mark the start of trying to regard our housing stock as an asset for the whole community that is not geographically restricted.
Two of my favourite architects are Alison and Peter Smithson, a married couple who built many modernist buildings—probably many of them in Milton Keynes. Some of their views were bizarre, and they had a vision for housing. While they wanted to see the rubbish chute replace the village pump, somehow they believed that putting us all in high-rise blocks would enhance the bonds of community. As a Conservative—
Order. I am sorry, but I fear that the hon. Gentleman is launching into something of a tour de force on the whole of housing policy. We have to focus. Two other hon. Members are trying to catch my eye before I call the Front Benchers. Perhaps he could focus his attention specifically on Government help for first-time buyers and possibly, out of courtesy to the two other hon. Members, wind up his remarks quite soon.
Thank you, Mr Gray, for your help. I shall therefore come to an end by quoting one of our predecessors, Mr David Eccles, a Member of Parliament for Chippenham, who said in 1948:
“Men are partly selfish and partly idealist, and they give their best when they believe they have a reasonable chance to put something in their pockets and to realise a fragment of their dreams.”
That is what the Government have been doing and what we need to keep on doing. I shall give way so that the two following Members have their chance.
It gives me great pleasure to follow the passionate remarks of my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard). I compliment my hon. Friend the Member for Winchester (Steve Brine) on securing the debate. Like him and many other Members present, I am prompted to contribute to it both to represent my constituents and out of concern for the ability of my children’s generation to get on to the housing ladder. I have four children aged between 13 and 26, who will wish to buy their own home and rather sooner, I suspect, than the children of my hon. Friend the Member for Winchester.
The Government can support first-time buyers in two ways: through financial support to enable them to get started, and through support for the development process. We have heard accounts from many hon. Members this morning about why action is needed. There has been some dispute about the average age of first-time buyers—it varies between 33 and 37—but we know for sure that it is much older than it was for my generation and my parents’ generation.
As recently as 2005, 65% of first-time buyers were aged under 30. By 2011, that had fallen to 22%. As a consequence, young people are remaining in rented accommodation for longer, often permanently, against their will. Many remain at home with their parents, as I know from personal experience, and it is leading to a culture change among our younger people. That has happened because, in the first instance, house prices have risen beyond the reach of many people; they are outside the multiple of average earnings—significantly higher than previously. The second issue is about lenders’ deposit requirements, as lenders react to problems caused in earlier years by the granting of high loan-to-value loans. The differential in my constituency is rather smaller than the problems faced by my hon. Friend the Member for South East Cornwall (Sheryll Murray); in my constituency of Rugby, first-time buyers are looking to find sums of £25,000 as deposits. That is a significant sum for people getting started. It is ironic that the fall in house prices—something that we consider desirable from an affordability perspective—is exactly what has caused lenders to look for larger deposits, as they try to avoid making loans that exceed the value of the properties against which the loans are secured.
It is important to debate the matter because first-time buyers are drivers in the housing market. They enable others at the next stage of life to move on, and the supply of housing is in itself an important driver of economic growth.
Many colleagues have referred to Government initiatives, such as the Firstbuy initiative and the NewBuy guarantee announced only yesterday. There is also local support for first-time buyers provided by local authorities. My council in Rugby is helping first-time buyers. It announced, just a week or so ago, £1 million in its budget for 2012 as part of the local authority mortgage scheme, which will enable 50 first-time buyers in Rugby to make a start on the housing ladder.
I want to focus my remarks on the supply side. We can do whatever we like about supporting demand, but if we do not take action on supply, there will be no point. The Government’s housing strategy told us that in 2009-10, there were 115,000 new build housing completions in England. However, household projections are growing at a rate of 232,000 a year. Therefore, the housing that we are currently building supplies only 50% of the requirement. The cumulative position is worse, because the Chartered Institute of Housing tells us that there is a backlog of something like 1.9 million houses, or a total of 8% of all households, built up over previous years. Therefore, even if we build at the rate of existing household formation of 232,000 a year, we will not go anywhere near providing the number of houses that we need. Development therefore needs to happen quickly.
The Government can and are doing several things to make that happen. The national planning policy framework, which I understand is due to be announced on Budget day, with its presumption in favour of sustainable development, will encourage more land to be made available. We need our local authorities to be progressive and to develop plans that make land available for housing development, working with neighbourhood plans. People often say that local people do not want new housing, but in my opinion, whether existing communities accept new housing depends on the kind of question they are asked. If we ask them, “Do we want to build houses in an area that does not currently have housing on it?”, most people will say no. However, if we ask people whether they want housing that will enable young people to buy their first-time home and allow retirees to downsize, that usually gets the answer yes.
Neighbourhood planning will enable local people to have their say in achieving that. I am delighted that my authority takes a very positive attitude towards development. Work is about to start on a site with 1,300 new homes—the Gateway site by junction 1 of the M6 —and a site with 6,200 new homes in a sustainable urban extension is also being developed in my constituency. I urge Members and local councillors to encourage their councils to take as positive an attitude to new housing development as my local authority.
The Government can do other things to improve supply and they are taking action. There is the build now, pay later scheme, which will free up land for development. The Government objective is for that to deliver 100,000 new homes. Cash flow is an issue for builders, and that scheme will enable builders to buy the land out of the proceeds of a sale. The new homes bonus is a simple yet powerful incentive. It means that local authorities, such as mine, which promote and welcome growth will share in the economic benefits of development and use the funds derived from that to provide communities in which people want to live. The community infrastructure levy encourages a more positive attitude from local authorities to development, because it means that the development itself will pay for the infrastructure that goes along with it and that it will not be a burden on the local council.
A further reason why local authorities should support housing growth is that it can support existing town centres. Recently, the Portas report has dealt with the decline of many town centres. If populations remain stable, town centres will need to shrink as people spend more on the internet and go out of town. An alternative is to defend an existing town centre and allow for additional housing growth. I am delighted that my authority is taking that route.
I know that this is a debate about first-time buyers, Mr Gray, but I want to talk for a moment about people known as second-steppers, who want to move from their first home. It is crucial that those people who have started a family and want to move up from their first to their second home can do so, because if they cannot, it creates a block for first-time buyers. Lloyds Banking Group says that 61% of second-steppers want to move but have been stuck on the property ladder for 12 months. They often have the same problem as first-time buyers in that there is a limited supply on offer to them. However, crucially and often uniquely, they have to cope with the problem of negative equity as prices have fallen over the past couple of years.
In today’s market, many of those second-steppers would have bought close to the peak and, having got on the first rung of the housing ladder, they are finding it increasingly difficult to get off it. People can benefit from Firstbuy if they are moving to a new home, but there is no particular scheme to support second-steppers. I would like the Minister to consider providing some help for that group.
I welcome the Government’s initiative for first-time buyers. Schemes are being introduced that will assist people to get on to the property ladder. I commend my local council for its commitment to both the supply and demand side of support and for ensuring that land is available. I ask the Minister to consider second-steppers who want to move on.
I will keep my contribution short to give the Minister and shadow Minister time to have their say. I congratulate my hon. Friend the Member for Winchester (Steve Brine) on securing this incredibly timely debate, given the announcements made by the Government this week. I recognise his comments about having a young family who climb into the bed—normally my side—at 4 o’clock in the morning to warm their cold feet. I look forward to the day when they will move away—not too far, but far enough.
If there is any such thing as a British dream, it definitely involves owning one’s own home. I was born and bred in a council house on a council estate. During the 1971 Macclesfield by-election, I remember a parliamentary candidate knocking on our door. I went to the door with my mother and a man was there with his blue rosette. It was Nicholas Winterton saying, “Good evening, Mrs Evans, are you aware of the Government’s right-to-buy policy?” She was not, but we were after that and, in 1972, we bought our council house.
Most people think that that was a Thatcherite policy, but it was, in fact, the Ted Heath Government of 1970-74 who introduced it. As my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) said, it is in the Conservative party’s DNA to give people the right to buy. However, for millions of people, achieving that dream seems further away than ever. One of the most important things that any generation can do is build enough good new homes for the next generation. However, the previous Government presided over a fall in house building to its lowest peacetime level since 1974. Inevitably, that led to a sustained decline in home ownership and soaring housing waiting lists.
The figures are most depressing. The number of first-time buyers fell from around 501,000 in 1997 to 185,000 in 2009. That is the lowest figure since records began. The average age of a first-time buyer without financial assistance from the bank of mum and dad is, as was mentioned by my hon. Friend the Member for Blackpool North and Cleveleys, 37. Admittedly, that age is somewhat exaggerated by the recording of divorcees buying a home on their own rather than jointly for the first time. However, it still highlights the current gloomy outlook for many young people in my constituency who hope to get on to the property ladder for the first time.
Luckily for those striving to own their own home, the coalition Government are pursuing an unashamedly ambitious housing strategy to help boost opportunity in our society. The Government are supporting an innovative new build indemnity scheme led by the Council of Mortgage Lenders and the Home Builders Federation that will allow home buyers to secure 95% loan-to-value mortgages for new build properties. That will help people in two simple ways: it will increase access to affordable mortgages, and it will encourage more homes to be built, driving down the long-term price of houses.
The Government are also investing £500 million in a new Firstbuy scheme that will help thousands of people longing to be home owners to get a foot on the housing ladder by contributing to their deposit on new build homes. Crucially, as announced on Monday, the coalition is also breathing new life into the hugely successful right-to-buy policy. That policy was so popular because it gave millions of people the chance to own their home when they had previously thought it impossible—families such as mine.
Labour disgracefully made repeated cuts to right to buy and deliberately reduced discounts and restricted eligibility. The new proposals to increase discounts dramatically will make it considerably easier for people living in social housing to buy their home. Under the new plans, for every home purchased under right to buy, a new affordable home will be built in its place. That should allow for a further 100,000 extra affordable homes to be built and help create a significant number of new jobs.
Finally, the Government have also created the new homes bonus. That multi-million pound programme rewards communities when they accept more house building in their area, creating a huge incentive to build the new homes that we desperately need. Critically, the programme also applies to empty properties brought back into use, which will help to end the scandal of thousands of good quality homes lying empty while people are left in limbo for years stuck on housing waiting lists.
It is very clear that there are many exciting developments that will help bring the dream of home ownership much closer to realisation for so many of our constituents. I am very proud to support the Government, who are absolutely committed to making that happen.
As ever, it is a pleasure to serve under your chairmanship, Mr Gray. It was a slight disappointment to me that you forced us to forgo what I am sure promised to be a stimulating aside on my great hero Nye Bevan, but perhaps we can hear that another day. I, too, congratulate the hon. Member for Winchester (Steve Brine) on securing a very entertaining debate and on giving me the opportunity to spend so much time with so many entertaining, warm and welcoming Government Members.
The debate is prescient given the announcements—or perhaps I ought to say re-announcements—earlier this week about the NewBuy scheme. I will come on to that in a moment. We have had an interesting range of passionate contributions. There has been a rerun of the golden greats of the Tory past—Thatcher, Heseltine, Eden—and I even heard about building a new Jerusalem. There were times when I could almost hear “Jerusalem” playing as the backing track to some of the tales of bucolic English home owning.
We have also heard some facts today, and I would like to add to some of them to provide some context. Let us be clear: there is a crisis in housing and home building. It is not new. It did not start under this Government. It has been going on for a long while and it is certainly getting worse. We need to be honest. Some of what the Government are doing is intended to help the crisis, but it is far from certain that they will be successful. As the Opposition, we intend to ask searching questions about what is intended and what will be achieved.
The facts are that, under this Government, house building is down, homelessness is up and it is harder to get mortgages. Rents in the private rented sector, where many have been forced to go, are climbing. In part, that is because the Government’s broader economic strategy is not working. The construction industry is being hit particularly hard as an effect of that failure to get the economy moving. Far from criticising the Government for seeking to assist the construction industry, the Opposition are urging them to go further.
Total construction, in terms of output, has declined by £2 billion since the Government came to power. New work output by the construction industry is down almost a quarter, by 23%. It is not getting better—it is getting worse. The previous two months, December and January, were the worst two months since May 2010. Compared with the last 18 months of the Labour Government, all house building has fallen by 11%. Completions, where a house builder finishes a house and brings it to market, are now at their lowest levels since the second world war, having fallen by 10% under this Government. That is not a new trend; it is an ongoing trend, but it is getting worse. The 60% cut to Labour’s affordable homes programme has meant that only 454 affordable homes were built in the past six months. Most shocking perhaps is that homelessness rose by 14% and rough sleeping was up by 23% in 2011. Those are the facts and Government Members need to remember them.
First-time buyers are key to getting the market moving. Government Members noted that the number of first-time buyers has decreased significantly over a long period, down from 700,000 per annum in 2004 to 350,000 in 2010. Why? There was a lot of comment about that. Ultimately, it is due to a squeeze between incomes and prices. House prices are high, and incomes have been depressed over a long period. As the hon. Member for Rugby (Mark Pawsey) pointed out, the reason for that is supply—we are not building enough houses. The number of houses in the market is very limited and successive Governments, including mine, have not done enough to arrest that. The current Government should not kid themselves that they are getting anywhere near arresting the problem.
There is also a problem of affordability, caused by the squeeze on earnings, limited supply and the contraction in mortgage lending that has occurred since the credit crisis. All those factors have combined to drive up the average deposit required by first-time buyers to approximately £100,000 in London and more than £50,000 across the UK as a whole. The average age of unassisted first-time buyers has risen from 37 to 44 right across the country in that same time period.
Labour understands—and understood—that something needs to be done to address that, which is why we set out to address supply. Between 2005 and 2010, we delivered 256,000 additional affordable homes in England. Contrast that with the scale of ambition shown by the current Government, who propose to build just 170,000 affordable homes—80,000 fewer affordable homes—in a comparative five-year period between 2010 and 2015.
What about helping first-time buyers get on the ladder? Hon. Members will have no doubt read in The Daily Telegraph this morning about the effect of the stamp duty holiday, which was introduced by Labour and is being cut by the Government. Although a couple of months ago, the Chancellor dismissed the stamp duty holiday as wholly ineffective, it has led to a 20% increase in recent months in the number of first-time buyers applying for mortgages. That indicates clearly that, far from being an ineffective measure, it was working and the Government needed to give it time to bed in and not abandon it, which is what they have done.
The Government have also abandoned Labour’s HomeBuy Direct scheme, which was funded to the tune of £380 million and designed to help 10,000 first-time buyers by providing a 30% reduction on the loan over five years. The Government have replaced that scheme with their own far less generous scheme, which is worth just £250 million, and offers only a 20% reduction. Other than that, the two schemes are largely similar.
The latest wheeze is the mortgage indemnity scheme, which was re-announced this week. It was first announced in November. It is designed to help a further 100,000 mortgage holders get on the property ladder through effectively giving them a 9% reduction—or indemnity—in the volume of their mortgage, thereby reducing the cost to the lenders and allowing them to offer 95% mortgages. There are many problems with that, but one is that 95% mortgages were already being introduced into the market at lower interest rates, in certain instances, than the ones announced by the Government. Barclays, Nationwide and some of the other lenders involved are lending at an average of 5.3% and 5.4% over the period on the 95% mortgage, whereas 5.25% was already available from the Leeds building society on precisely the same terms. We need to ask whether the scheme does what it says on the tin.
What guarantee is there that the scheme will actually assist first-time buyers? It is open to all prospective buyers up to £500,000. How can the Government be sure that this will help first-time buyers? How can they be sure that it will go to those families who are most hard pressed, as opposed to those who are slightly better off and can perhaps afford to raise a mortgage?
Finally, how can the Government reassure us that this will address the underpinning cause of the crisis in our housing market—the lack of supply? Can the Minister offer us any guarantees that this will lead to a dramatic increase in the number of houses being built, or will it simply displace activity, both in the mortgage market and in the house building market, that would otherwise have happened naturally as the economy bounces back?
I start by joining the round of congratulations to my hon. Friend the Member for Winchester (Steve Brine). He has not only secured an important and topical debate, but spoken with real passion. I pleased to respond on behalf of the Government, both to him and to those who have also contributed with passion, whether from Blackpool, Milton Keynes, Cornwall or elsewhere. We have heard about homes, homelessness, history and our hopes for our children. We have heard about stalled development and proper community development, which I will touch on briefly. If Mr Gray will forgive me, I will also insert a small piece of history from my own constituency of Norwich North. I believe that the Mile Cross estate was the first council estate in England built outside London, something that I am very proud about. I shall stop there, before Mr Gray tells me to sit down.
My hon. Friend the Member for Winchester highlighted the package of support that the Government have introduced to help people own their home, and I will set out our progress on that. Before I do so, I will deal with some of the questions that were asked about the detail, principally by my hon. Friend. He asked whether NewBuy could be extended to existing properties, not just new properties. NewBuy builds on an industry-led scheme. That is very important, because it builds on support from both builders and lenders. It makes homes affordable, it stimulates economic activity, and, crucially, it increases supply.
The Home Builders Federation estimates that new build could deliver 25,000 additional homes in three years, supporting in turn up to 50,000 additional jobs, which I think all hon. Members will agree represents a real boost to the economy at a time when it is most needed.
On new versus existing, it is important to state that home building and the supply of new homes at present is not meeting the demand in the economy, so there is a pressing need for new build in that sense. A scheme focused on existing homes would be different and could have different financial consequences.
My hon. Friend also asked about the first-time buyer discount on stamp duty land tax, as did the hon. Member for Pontypridd (Owen Smith). Hon. Members will be aware of a review by Her Majesty’s Revenue and Customs in November 2011, which brought forth some staggering numbers that they may not be aware of. The review indicated that only 1,000 of the additional first-time buyers who bought a property between April 2010 and 2011 would not have purchased it without the relief. That 1,000 figure is derived from the 118,000 first-time buyers who used the relief, of whom it is believed 117,000 would have done so anyway. Hon. Members will agree that those remarkable numbers suggest that the relief was not effective in increasing the numbers of first-time buyers entering the housing market.
Before the hon. Gentleman asks me further questions, I must address his point about the cost of furthering the relief for a year being estimated at £150 million. I hesitate to give way to him, because in his comments and the questions that he asked me, he once again showed his party’s rather tenuous grip on credibility—if he thinks that such a sum represents value for money in helping first-time buyers and other purchasers. He then quibbled about whether the scheme that I shall outline really helps first-time buyers. He must ask serious questions if he thinks that £150 million spent in that way furthers that aim with no dead weight.
I would have to look at the numbers before lending them any credibility. It would also make sense for the Minister to concede that her comments are based on numbers predicated on a scheme that has not yet ended. She is talking about November numbers, whereas the scheme runs through to March. The Council of Mortgage Lenders suggested that there has been a 20% increase in the intervening period, which will radically change the figures.
The hon. Gentleman knows as well as I do that the scheme ends on 24 March 2012. No doubt some will try to get in before then. Indeed, a review has to take place at a certain point and, on the broad thrust of a year, if figures such as those I mentioned have been achieved, it is unlikely that it would continue to be a sustainable way to support first-time buyers.
Let me turn now to the point of the debate, which is to query how we can best support those who wish to enter home ownership. There has been a clear correlation in recent decades between wider economic problems and volatility in the housing market. The best thing that we can do, first of all, to support the housing market is improve the country’s financial and macro-economic stability. That is why we are taking action to get public finances back on an even keel. Only through that action will we give people the confidence to invest in new homes and allow the building industry to go ahead and build the homes that we need.
We need to tackle the underlying structural issues that have had such negative consequences for the housing market. That is why the Government are taking action to improve stability in the credit markets and are reforming the planning system. Without such reforms we will face cyclical problems, time and again, of the sort experienced in recent years. However, we understand that we need to help people now, which is why we are taking action to help first-time buyers and other purchasers own their own home.
The effects of the recent financial crisis were particularly pronounced for first-time buyers, as mortgage lenders have cut back on low-deposit products. I can confirm, from Government figures, that the average age of an unassisted first-time buyer is 37, compared with 33 before the crisis. The Government are taking action now to help first-time buyers and others to attain home ownership.
On Monday, the Prime Minister launched the NewBuy scheme, which will deliver a significant increase in housing supply—I have already put numbers to that—and access to affordable mortgages for those without large savings who wish to purchase a new home. The scheme is not aimed at borrowers who cannot afford the mortgage, but at borrowers who lack the savings to fund a deposit, giving creditworthy borrowers a leg-up in the property market. I should like briefly to note hon. Members’ comments about second-steppers, who are important and have serious contributions to make in our effort to get the housing economy moving.
Detail on products is available to Hon. Members who wish to look for it, but I can confirm that although prior to Monday there were no 95% loan-to-value new build mortgage products on the market, today buyers will now be able to purchase a new build property with a 5% deposit. Builders are partnering with lenders to offer 90% to 95% mortgages. Three lenders are offering new mortgage products in that arena. We expect more builder-lender relationships and associated mortgage products to be confirmed over the coming weeks and months. Therefore, in total, the Government have made provision to help up to 100,000 families and young people to buy their own home.
We are committed to invigorating the right to buy, which hon. Members have applauded in today’s debate. On Monday, the Prime Minister announced that we will support social tenants who aspire to own their own home, by raising the discounts to make it attractive to do so across England. Right to buy has already helped nearly 2 million people since its introduction, but discount rates were reduced by the previous Government and the number of sales fell dramatically. From 2 April, the discount limit will be raised to £75,000 across England, so in London, for example, it more than quadruples the current limit. It will help thousands of people realise their home-owning aspirations. However, we are also committed to ensuring that it does not erode the social housing stock, which is why for every home bought under right to buy a new affordable home will be built.
NewBuy and right to buy sit within a broader suite of options intended to help first-time buyers and others into home ownership. Firstbuy, which was announced in Budget 2011, is a fixed-term measure designed to support the housing market, given constrained credit availability and challenging economic conditions. Under that scheme, the Government and around 100 house builders are together providing some £400 million to assist almost 10,500 first-time buyers to purchase with a 20% equity loan a new build property in England by spring 2013. We have had more 4,250 reservations since the scheme opened in September. The three largest participating house builders have reported sales of more than 1,200 homes in the first four months. Hon. Members will agree that those results show that the Government are taking action now, as needed, to support those who wish for the first time, or indeed at other times, to be a home owner and to continue to build the kind of communities that we all aspire to see throughout the country for our children and grandchildren.
Once again, I thank my hon. Friend the Member for Winchester for his reasoned, thoughtful and passionate contribution to the debate that he has given us the opportunity to participate in. I thank other hon. Members who have made equally passionate and inspiring contributions on what we all hope for those we represent.
Future Mobile Competition
If those hon. Members who took part in the previous debate would like to move on quickly and quietly, as Mr Speaker often says, we can start this debate early, because both the Minister and the hon. Member who proposed the debate are present in the Chamber.
It is a pleasure to serve under your chairmanship this morning, Mr Gray, and I am grateful for the guidance that you have offered.
What we are debating is extremely important to the whole United Kingdom, to the communication links in our constituencies and to the economy in general, and we are considering the future of the new generation of mobile communications. From the outset, I want to pay tribute to the Minister and the Secretary of State for Culture, Olympics, Media and Sport for the priority given and the commitment shown to the subject and for how they and Ofcom have reacted to the demands of the House and of the wider marketplace.
The new generation of mobile communications brings fantastic opportunities for use and management of data to benefit business, the public sector and lifestyle and for great efficiencies in ways that we can only imagine. I do not want to labour such points today, however, because I want to focus on some of the technical issues in the latest Ofcom consultation.
The UK has an extremely competitive mobile communication market, which has benefited the economy hugely and resulted in mobile communication prices that are among the lowest in Europe. Ofcom originally consulted on the 800 MHz and 2.6 GHz spectrum allocation and auction process last March. At the time, its proposal to require a 95% population coverage obligation caused considerable concern in Parliament. During an exceptionally well attended debate in the main Chamber, many Members called for an increase to a 98% population obligation.
I am delighted that Ofcom responded positively and revised its preferred options in the new consultation to include a 98% coverage obligation, which shows a significant commitment to areas that were left behind following the 3G auction. Rural areas in Wales, England, Scotland and parts of Northern Ireland suffered under those arrangements.
I congratulate my hon. Friend on securing this important debate, although it is a shame that no one from the Opposition is present. Does he agree that the opportunity is hugely important for rural areas, because of the economic benefits provided to places that are otherwise remote and lacking in infrastructure?
I am grateful to my hon. Friend for underlining such a valid point. The launch of 4G mobile communications will be the last opportunity for a valuable area of the spectrum to be used, auctioned and marketed to benefit the whole economy. Ofcom and the Minister have reacted to the demands of my hon. Friend and many of our colleagues. Let us compare that reaction with the 3G launch administered by Ofcom under the previous Administration and the benefits for areas such as Wales. Despite an auction that netted £22.5 billion, Wales has been left with only 79% 3G coverage, against 98% coverage in England. The 2G coverage in Wales remains at 89%, compared with 99% in England. We might have expected the previous Government to invest some of that fantastic 3G windfall into some of the not-spots, along the lines now being followed for 4G by the Minister and the Secretary of State.
Even within the 98% 4G option, Ofcom presents two main alternatives, the first of which is to set the higher but specific population coverage obligation to include the outcomes of the Government’s mobile infrastructure project. The second option is to specify a coverage obligation by reference to the existing 2G network in combination, plus the additional mobile voice coverage added through the Government’s MIP. Strictly speaking, the second model risks not reaching the exact 98% population coverage, but it gives the opportunity to go well beyond that, dependent on the MIP roll-out and its nature and form.
I therefore support the second option, with its greater opportunity, but ask that Broadband Delivery UK consult actively in and outside Parliament on how best to use the resources that the Minister and Secretary of State have made available. I ask BDUK to pay particular attention to the sort of data on Wales that I mentioned as a result of the deficiencies of the 3G auction.
A further significant difference between the two Ofcom consultations relates to the breakdown and split of the spectrum and the proposals to guarantee national wholesale competition on the current scale. That is of fundamental importance to maintaining the strong competition and benefits thereof that I mentioned earlier. We need to remember that the 800 MHz spectrum is the most desirable to all operators. It allows the best coverage possible both in and outdoors. In simple terms, it travels further and penetrates buildings much more effectively than higher ends of the spectrum.
The March 2011 consultation guaranteed such provision for two operators, partly because Telefonica and Vodafone currently operate on the 900 MHz spectrum, which holds similar properties to the 800 MHz level. The auction was to be split into portfolios, starting at a pair of 5 MHz blocks. Some believed that such a level offered insufficient capacity and others objected to two operators gaining an absolute right to the 800 MHz spectrum. Responses to the consultation led to changes, by removing the preserved rights for two operators and increasing the portfolios to blocks of a minimum of 10 MHz.
The basis of that change is significant, because Ofcom revised its opinion on the interpretation of the reach of the 800 MHz spectrum, by comparison with that of the 1,800 MHz spectrum. At the outset, it believed that operators with a large amount of low-frequency spectrum would have an “unmatchable competitive advantage”, but the latest consultation shows that its position has changed and it now believes that low-frequency spectrum is not a necessity for all operators—if an operator had sufficient 1800 MHz spectrum, it would still be able to compete.
Ofcom now believes that an operator can compete with others operating at a lower frequency, possibly with a price trade-off in compensation for reduced indoor coverage. That is a respectable argument, but not one that I accept. I do not think that it is practical or realistic for consumers to differentiate in such a way, even if the technological claims are robust. There is no effective way, other than experience, in which even an informed consumer will be able to assess the quality of indoor coverage of a service provider.
Contract tie-ins range between one year and two years, so switching provider in the short term is not an option, and coverage and quality could also change within that period because of further investment in additional masts, so confusing the situation further. It could be argued that that was the position when each generation of mobile communication was auctioned and rolled out. At such times, however, the markets were developing and people were prepared to compromise in the short term. Even after the 3G auction, Hutchison used that business model to gain market share, but now that the market has matured, all operators compete on similar terms.
Intense competition would not exist over the longer term in a mature market without the availability of 800 MHz or any further spectrum auction to sustain market interest, and the whole intention of the policy to maintain four credible national mobile operators in competition would be undermined. Over the longer term, the operator without 800 MHz or 900 MHz would walk away or be subject to a takeover by one that had the desired spectrum.
I therefore urge Ofcom and the Minister to consider splitting the auction portfolios, so that four operators have the opportunity to secure low-frequency spectrum. That is less prescriptive than the first consultation, but each operator, including the possibility of a new entrant, must have the opportunity. There are only three pairs of 10 MHz blocks, and my proposal could mean splitting to up to six pairs of 5 MHz options with appropriate guarantees, which is similar but not identical to what was offered in the first consultation. That would deliver long-term sustainable competition, protecting the consumer in the best way, rather than by regulation at a later stage.
Finally, I want to turn to data roaming. Charges by all operators at the moment are wholly unacceptable, with monthly bills running into possibly hundreds of pounds for people travelling in Europe or north America. The European Commission recently proposed a cap of €100 per gigabyte, which could be multiplied by five to reach a retail price of up to €500 per gigabyte, equating to £420 per gig. Clearly, that is far too high and undesirable for individuals and businesses.
The European Parliament recently voted to halve the wholesale cap to €50 per gig, which is encouraging, but I would ask the European Council to move still further. Most infrastructure spend has already been made. By comparison, UK consumers pay £10 per gig within the UK, and even after reform, data roaming could still cost £164 per gigabyte at the reduced level by 2014. Clearly, it is necessary radically to reduce roaming prices. Lower wholesale rates drive market competition and allow operators to develop lower cost propositions. The regulations will be finalised in June, and I ask the Minister to respond to these calls in the same way that he and Ofcom responded so positively to the shift from the 95% coverage obligation in the 4G auction to the 98% coverage obligation.
I will bring my remarks to a close by emphasising the priority that the Government and the Minister have given to such an important policy. We are in the last-chance saloon in marketing the new generation of mobile communications strongly, effectively and efficiently to gain and maintain the right level of competition. There is a threat that some operators may pursue challenges through the courts, but I hope that an arrangement can be delivered on securing the right level of competition, so that all may be reassured, but with ultimate choice to the consumer, while driving prices down in a similar but not identical way to that in which the 3G auction was used.
It is a pleasure, Mr Gray, to serve under your chairmanship this morning. I congratulate my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) on securing this important debate. I think that it is the first since we announced the mobile infrastructure project, so it gives me the opportunity to update the House on what is happening. My hon. Friend is fast gaining a reputation as something of an expert in the sector. In the Back-Bench debate, he led the calls to increase the coverage obligations for the 4G auction, and those calls were listened to, as he acknowledged in his speech. He has given a highly accomplished résumé of some of the key issues surrounding mobile competition, which only he and a select few others in the House probably understood. That is a measure of his expertise.
It was apparent to me when I took up my post as Minister with responsibility for communications that this matter is incredibly important and that we must get it right. I sometimes joke—perhaps I should not—that I never thought that I would be quite so excited by spectrum policy management as I am, and the reason is that it is fundamentally important to the future of the UK economy. We know that the internet has already contributed something like one quarter of the value of growth in gross domestic product in the UK in recent years, and without a vibrant communications sector that growth would be stunted. In the past year, almost two thirds of mobile handsets sold were smartphones. There is a huge hunger for data, and more and more people will access the internet and data on portable devices, whether smartphones or tablets.
To increase his already considerable expertise, I urge my hon. Friend to read the recent speech by Ed Richards, the highly effective chief executive of Ofcom, on dynamic spectrum management, which will be the next challenge to ensure that white space spectrum—the spectrum that sits between the spectrum that we allocate in more conventional ways—can be used. There is real hunger for spectrum as more and more people acquire devices. Spectrum is necessary not just for capacity, but for fast speeds. No one wants a smartphone that takes ages to download a website.
Spectrum and broadband access are becoming increasingly like utilities such as water, gas and electricity in that they are a fundamental tool with which to engage with modern life, because they allow people to access a wide range of services, such as handling their bank accounts, paying bills, doing homework, or accessing Government services. Equally important, they allow many small and medium-sized enterprises to increase their footfall and access to different marketplaces. All that needs to be sorted out.
When I was appointed, it was clear that unblocking the release of 4G spectrum to the market was essential. My hon. Friend alluded to the fact that the debate has been going on for a number of years. We were at one minute to midnight, so we ordered Ofcom to conduct a combined auction of 800 MHz and 2.6 GHz spectrum as soon as possible. Ofcom has consulted extensively on that, not once, but twice. The 4G auction is not just about faster broadband; as I said, it will help improve coverage. Having listened to my hon. Friend and others, the auction design now includes demanding coverage obligations of up to 98%.
We must not forget the important role of competition in the UK’s mobile communications market. When we directed Ofcom to design the auction rules, we made it absolutely clear that we want to maintain a four-operator marketplace. We want a competitive marketplace, not just because it drives down prices for consumers, but because it encourages innovation. We believe that it is important to retain that level of competition, so in the run-up to the auction, we directed Ofcom to assess both current and future competition in the UK market, and to take that into account in the design of the auction.
A major point that my hon. Friend made was his concern about the parcels of 800 MHz spectrum that are to be auctioned. He suggested that those parcels should be 5 MHz rather than 10 MHz, and pointed out that that was proposed in the original consultation document to enable all four operators to have access to the 800 MHz spectrum. Ofcom conducted genuine consultation. It is often said that consultation is a sham and that minds have already been made up, but Ofcom listened to the industry, and its overwhelming view was that parcels of 5 MHz were simply not big enough to have appropriate capacity, so Ofcom has proposed parcels of 10 MHz. The consultation has now closed, and we await the final auction rules and the mobile operators’ reaction.
As my hon. Friend well knows, the circle is difficult to square, because sub-1 GHz—that is, the 800 and 900 MHz to which he alluded—is seen by some as the best sort of spectrum because it travels further and penetrates further, as opposed to spectrum above 1 gig, which has greater capacity. In conducting its analysis of future competition, Ofcom took the view that that gap was narrow, and my hon. Friend will have seen that Ofcom announced proposals yesterday to liberalise 1,800 MHz for 4G services.
We now find ourselves in an unusual position. Operators above 1 gig have been arguing for a long time that they must have guaranteed access to sub-1 GHz, otherwise they cannot compete, and those operators with sub-1 GHz spectrum are jumping up and down and saying that those with spectrum above 1 gig now have a huge competitive advantage. Interestingly, whichever operator someone works for, it always appears in their world view that other operators have an extraordinary competitive advantage. However, I will adopt the tone taken by my hon. Friend and say to all operators that the time for arguing about such matters in the courts has long passed, and that for this country to maintain its economic edge and dynamic communications market, we must proceed with the auction and with spectrum liberalisation, which in any case we are required to do by the European directives.
I am immensely pleased that we have secured Treasury funding for the mobile infrastructure project that my hon. Friend mentioned. In the autumn statement, the Chancellor announced that £150 million would be set aside to fund that project which, where possible, is intended to cover mobile not-spots. As I said earlier, that money was secured because of the increasing recognition that mobile broadband coverage is becoming as important as fixed broadband coverage—if not more important—particularly in rural areas.
Since that announcement, my Department has worked closely with Ofcom to define the scale of the problem and identify the so-called not-spots. As my hon. Friend will know, a great deal of commercial sensitivity surrounds the precise location of those not-spots, and mobile network operators understandably guard such information closely. Subject to agreement with data holders, however, we intend to publish an indicative map that will give hon. Members a sense of where the project will focus. Additionally, we must communicate with the European Commission to ensure that the project meets the requirements of state aid regulations.
As I said earlier, the mobile infrastructure project is intended to cover areas where there is no coverage from any mobile operator—complete not-spots. In other areas, an individual might think that there is no coverage, but they may be with an operator that does not have coverage in that area—a partial not-spot. Ofcom is working closely with the industry to see whether that can be addressed. Of course, such matters are commercially sensitive because any operator that has invested in a network in one area would look askance at a second operator that was able to work in the same area with financial assistance from the Government. We must work with the operators to try and ensure that they all begin to provide coverage in areas that are not currently covered.
The definitional phase of the mobile infrastructure project is nearing completion and I am aware, not least from debates such as this, of the strong and increasing interest in it. My fellow MPs can rest assured that we will engage closely with the devolved Administrations and with those local authorities that will be most affected by the project—or, to put it another way, those that are destined to benefit most. Such engagement will ensure that people’s voices are heard when designing the overall solution, and that where choices need to be made, the project meets local needs. It will continue throughout the lifecycle of the project and allow local considerations to be taken into account.
A lot of work is being done to improve mobile coverage, and we must ensure that our planning complements that. We are also seeking to achieve synergies with the rural broadband programme, for which £530 million has been set aside, and that may include, for example, sharing backhaul—the fibre connections that are required for fibre in the ground and mobile connectivity to work.
Getting the industry on board is an essential part of delivering the project. We issued the first step in the procurement process, a prior information notice, before Christmas, and responses to that and to a further industry consultation document issued in January have given us a clear picture of what the industry is expecting to see throughout the process. We followed up that consultation with a series of meetings and workshops to ensure that what we are doing is fit for purpose, and that the capital infrastructure will be used to best effect.
Following detailed discussions with mobile operators about the best solutions to the problems of overall coverage, we are moving swiftly. We intend to begin a procurement process this spring with a view to signing a contractor to provide the necessary infrastructure by the end of the year. Ideally, benefits will begin to be felt this time next year, and the whole project will be delivered within a highly stretching three-year timetable.
My hon. Friend’s third point was about data roaming, and speaking as a layman rather than a Minister, I have an enormous amount of sympathy with that. On a recent trip to the United States, I experienced my own version of bill shock because of the sheer cost of data when abroad. That is also a huge issue in the European Union, and the point has been made time and again, not least by the effective commissioner for digital services, Neelie Kroes, that too many UK citizens who travel to Europe—as increasingly people do not only for leisure but for business—have to get into the habit of turning off their phones. That essential business tool and gateway to the things on which we increasingly depend has to be turned off when going abroad, even just across the channel to France, because of concerns about the price of data.
As someone who in principle is reluctant to intervene in the market, I looked slightly askance at the Commission’s efforts to reduce the prices first of voice roaming and now of data roaming. However, its efforts to reduce the cost of voice roaming have been effective, and in principle the UK is supportive of the directive on data roaming. There are probably a few details that need to be ironed out, but we have urged progress on that directive because we recognise that it presents opportunities that will allow consumers to conduct their business more cheaply and effectively.
The issue is more problematic outside the European Union because we would have to negotiate via the European Union, perhaps as part of the World Telecommunications congress, to provide a solution for global data roaming. That is not something on which the UK can take a unilateral decision for its customers and operators; it would have to be an EU-wide agreement on a global basis. I understand the concern, however, and progress on the data roaming directive this year should begin to make a significant difference to customers.
I will be brief due to the time. Is the Minister aware that, on the fringes of the EU, if someone returns from a Greek island, for example, one minute they might be on a Greek mobile network but the next minute, because of its proximity, they move on to the Turkish network? That happened to me. When they get home and get their mobile phone bill, they find that some calls were quite cheap while others were extortionately expensive. People are perhaps not aware of that issue when they go to the fringes of the EU.
My hon. Friend makes a good point, and countries such as Latvia and Lithuania, which are on the fringes of the European Union, have concerns about how to implement the data roaming directive. I will investigate the issue of roaming across Greek and Turkish networks, and I will write to my hon. Friend to explain whether the European Union is engaging with Turkey on that.
My hon. Friend the Member for Vale of Glamorgan has been a doughty champion of this issue, not only for his constituents but for all those who live in rural areas, in recognising that people must not be excluded from the digital revolution and that access to fixed and mobile broadband is becoming an ever more important part of people’s businesses and lives. I hope that I have used this opportunity to update my hon. Friend, and I invite his comments on the effectiveness of the mobile infrastructure project and on our progress on data roaming and the auction, which we hope will proceed with alacrity and minimum delay.
[Dr William McCrea in the Chair]
I am grateful to have secured this debate on women’s aid and safety and access to benefits, and to speak under your chairmanship, Dr McCrea. I am also pleased to welcome the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), who has a great interest in the subject that we are debating, and of course my right hon. Friend the Member for Stirling (Mrs McGuire).
The theme of the debate is, unmistakably, women’s aid and safety and access to benefits, but it is also predicated on an enlightened understanding of the scourge of domestic abuse, which is the root cause of the problem. I believe that there is a moral duty not to just pay lip service to an endemic problem visited on far too many women. Domestic abuse was succinctly articulated by the psychologist and author Susan Forward, PhD, who described it as
“any behaviour that is intended to control and subjugate another human being through the use of fear, humiliation, and verbal or physical assaults…it is the systematic persecution of one partner by another”.
Having assimilated and carefully studied the erudite view expressed by Dr Forward, I wish to proceed. The consequences of domestic abuse are simply horrific and lead women into a very dark place. They live a life in the most sinister, corrosive and destructive environment, which is as near to hell as it is possible to get on earth. Living under a reign of constant fear and terror of mental and physical torture damages the self-esteem of the victims, but what incalculable damage does it inflict on innocent children? We can ponder that. They, too, are often scarred for the rest of their lives.
One of the foremost international diplomats, renowned for resolving conflict around the world, the former UN Secretary-General, Kofi Annan, once said that domestic abuse
“denies women their most basic human rights, such as the right to health, and undermines the social and economic development of communities and whole countries…Domestic Abuse is widespread and cuts across class, age, religion and ethnic group…it has long been established that there can be no justification for any form of Domestic Abuse.”
“Domestic Abuse is perhaps the most shameful human rights violation, and it is perhaps the most pervasive. It knows no boundaries of geography, culture or wealth.”
Monklands Women’s Aid provides a first-class service to women and children in my constituency. Before institutions such as Women’s Aid existed, many women were forced to suffer in a chilling silence for the sake of their children. When we think back to previous generations, we can only wonder with incredulity at how many women lived in hell. We will never know how many were driven to such a level of despair that they took their own lives.
Clearly, most women did not have a way out of their oppressive environment. I am sure we all agree, irrespective of our political differences, that we do not want a return to those days. We have to understand that many of the partners have not only a physical hold over those women, but a mental hold, an iron grip, which is extremely difficult for many women to break free from. Women’s Aid is now inculcated in our society. Thankfully, women of this generation are not alone and they realise that they have a place of refuge.
I congratulate my right hon. Friend on securing this important debate; I know that that sentiment will be echoed across the Chamber. Like him, I pay tribute to my local Women’s Aid and I also pay tribute to Trafford rape crisis centre. There are some excellent organisations, as he says. Does he agree that in addition to the physical and mental abuse that he describes, there is financial abuse? As has been shown, when women are under financial pressure, it is more difficult for them to flee an abusive relationship, so at times of rising female unemployment and reduced access to financial benefits, more women might be trapped in the home in exactly the circumstances that he describes.
I agree and I hope to deal with some of the issues that my hon. Friend raises. That was an excellent intervention.
As an organisation, Women’s Aid has supported women from all social and financial backgrounds and continues to do so. One in four women will experience domestic abuse at some point in their life. Two women a week are murdered by a partner or ex-partner. Women living with domestic abuse are five times more likely to suffer from depression. In 90% of domestic abuse incidents where children are present in the home, they will be in the same or the next room.
My right hon. Friend is citing horrific statistics that are all too familiar. In some areas of my constituency, there are spikes in the occurrence of domestic violence that are way out of kilter with the national or local average. I ask that Ministers look at the areas where there are spikes and find out why they are happening.
I am grateful to my hon. Friend for making an extremely significant point. On average, a woman will be assaulted 35 times before reporting it to the police. It is the case that 30% of domestic abuse either starts or escalates during pregnancy. Domestic abuse can account for up to 25% of all recorded crime.
Let me outline current practices and why they should be cherished. What is the present position in terms of access to benefits? The present position permits organisations such as Women’s Aid to go through proper procedures to ensure the safety and health of women who come to them. Here, as they recognise, is the tragedy: many women who are experiencing domestic abuse blame themselves for what is happening to them. Clearly, it is not their fault. The only person to blame is the perpetrator carrying out the abuse.
Monklands Women’s Aid, in its last annual report, shone a light on the scale of the problem. The contact made with Monklands Women’s Aid involved 4,310 women, 1,202 children—from birth to 12 years—and 1,056 young people aged from 13 to 19. If such an organisation did not exist, we would need to invent one.
As I have discovered, if a woman requests refuge, a risk assessment is carried out to ensure that the service and refuge will meet her needs. A home application and benefit check is completed for the user. A doctor is then put in place to assess the health of the woman. If necessary, women are taken to hospital immediately. Social workers, community psychiatric nurses or various support networks are contacted, with the woman’s permission, for continued support. If the woman wishes, the police are called. Throughout the process, workers from Women’s Aid offer continued support. If children are involved, relevant schools and nurseries are contacted and provision put in place to make the transition for the woman as seamless as possible. A children’s service is put in place as part of the outreach programme. When women are leaving the refuge, support workers help them to move to their new tenancy and offer much needed help and support.
Institutions such as the NHS and police services can do only so much in providing support to women who are in desperate need of help and protection. The refuge is the foundation for all services provided by this organisation, and it signifies the basis of a new life for many women. It is still desperately needed by many women in emergency situations—when their lives or their children’s lives are at risk. A refuge is a haven that, on multiple occasions, has saved lives.
In all candour, the proposed reforms by the Government are worrying. All the services that I have described will effectively be wiped out, thus leaving Women’s Aid with the sole service of signposting women to other support services—if they still exist.
Before my right hon. Friend moves on to what may lie ahead for women in the future, may I remind him that when a woman seeks a Women’s Aid refuge, it may be the first time in their lives when they, as the partner of someone who has abused them, find themselves without money? The first port of call will be the Department for Work and Pensions. All too often the delay in securing money through the benefit system is bad, so much so that some 30% or 40% of women find themselves, out of sheer frustration, going back to the marital home and to the abuser, which is no answer to their problems. The system is already far too slow to respond to the needs of women.
I congratulate the right hon. Gentleman on securing the debate. Its importance for me stems from the fact that the very first refuge in this country was created in my constituency. Does he agree that housing is an issue and that pressure needs to be put on councils to put women who are in a refuge, especially those with children, higher up the priority list for permanent housing? Temporary housing is not good enough. Bed and breakfast accommodation is not appropriate for children because they need some stability in their lives.
Housing is at the heart of everything that we are discussing and I welcome what the hon. Lady said. Perhaps this is an opportune moment to assess what is likely to happen, including in housing, post April 2013. Essentially, the key change is that housing benefit will be paid directly to the claimant through universal credit, which will adversely affect Women’s Aid.
I recognise the imposition of a system in which people are always better off in work than they are on benefits. However, the so-called simplification of merging income-related jobseeker’s allowance, housing benefit, child tax credit, working tax credit, income support and income-related employment support allowance into a single universal payment is not without problems. Although it may be desirable on paper, it will undoubtedly bring with it chaos for individuals and other charitable organisations.
Please be assured that the proposed changes would have a serious detrimental effect on Women’s Aid centres throughout the United Kingdom, and certainly in my constituency.
Like many Members here, I supported trying to get individuals responsible for their housing benefit. The fact that 75% now have to pay out of their own housing benefit is a positive step forward for individuals. However, I agree with the right hon. Gentleman that we must ensure that women in refuges or in Women’s Aid are allowed to have their housing benefit paid not directly to them, but to the supportive housing. I understand that the Department is still considering the matter, and I share his concerns that we need to ensure that the most vulnerable do not have to deal with their own finances and housing benefit in this way.
That is an important point and I am grateful to the hon. Lady for drawing our attention to the fact that the Department is now considering the matter. I hope that her points and those made by other hon. Members in this debate will be taken on board by the Department.
The changes under discussion would force women who go to Women’s Aid in moments of crisis to pay up front for refuge. That is money they simply do not have. The majority of women who seek help from Women’s Aid have few clothes and belongings, let alone the money to pay for refuge. Nevertheless, at present, Women’s Aid can provide refuge to any woman who turns up at its centres because it can claim a share of management costs through housing benefit. That crucial point was underlined by the hon. Lady, and will no doubt be underlined by others. The last thing that distressed women should be worried about is paying for refuge. Of all 4,000 women who were assisted by Monklands Women’s Aid group in 2011, not one of them turned up with enough money to cover the cost of the refuge.
There is an unshakeable belief, held by those who manage this service and by me, that existing resources will simply not be available. The private sector manager in North Lanarkshire council has confirmed that Women’s Aid received local housing allowance of £895.16 every four weeks for service users. Under the new rules, it may get £456.92 for four weeks. That is a terrifying prospect, which the Minister will have to address sooner rather than later.
I am now at the very heart of my argument. I have to pose the question: do the Government want women with small children walking the streets or, worse still, being forced to live in perpetuity under a reign of terror from an abusive partner? In 2013, is that the best we can do for abused women and children? I think not. Although I have political differences with the coalition Government on a range of issues, I simply do not believe that they want to make life any more unbearable for vulnerable women and children.
Let me now address my remarks to correspondence that I recently received from my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), Labour’s shadow Home Secretary and shadow Minister for Women and Equalities. She has launched a consultation on women’s safety, which will examine the impact of the Government’s decisions on women’s safety and consider how to protect and enhance it. The consultation is being chaired by Vera Baird QC, who will be supported by my hon. Friend the Member for Stretford and Urmston (Kate Green), the shadow Minister for Equalities, and my hon. Friend the Member for Walthamstow (Stella Creasy), the shadow Home Office Minister. I intend to contribute to this new commission.
I genuinely wish to report that I have made representations to the Government and that they have listened and acted in a manner that does not put women’s personal safety in jeopardy. For the record, I plan to invite Labour’s commission to visit and meet the management of Monklands Women’s Aid as well as the victims. In a spirit of fairness and even-handedness, I extend a similar open invitation to the Minister and her team.
On one unique occasion, I visited Women’s Aid to meet four women from different backgrounds and with different experiences of domestic abuse. Listening to each woman describe their lives was quite depressing; to think that so many have to live their lives in such fear and anxiety is truly distressing. Listening carefully to numerous examples of abuse, and sitting alongside the victims explaining their plight, was emotionally draining. There is a world of difference between reading about such stories in a book or newspaper and hearing first hand such dreadful experiences. The bottom line is that an abused household is no place for women and certainly no place for an innocent child.
I was shown a work of art that a victim’s young daughter had drawn. It had originally been on her bedroom wall in the abused household where she had lived. It was a self-portrait, showing a tear racing down her cheek. Yet, after a few days in the refuge, the girl took down the drawing from the wall. We all very much welcome that first step towards the happiness that that child was entitled to enjoy.
Women often come to the charity having had their family broken into pieces, yet there is a real sense of togetherness at the centres that allows them to feel as if they are joining a new family. The four women I met had differing stories of abuse, but there was one common feature—all of them felt trapped in their lives, as if there was no way of escape. They would never have been released from that stranglehold of entrapment and suffering had it not been for the help of Women’s Aid. The tremendous sadness that I felt initially turned to delight as I witnessed how these women had managed to turn their lives around, not only for themselves but, most importantly, for their children and for their loved ones.
My right hon. Friend is very powerfully evoking the experiences of women and their children who have suffered abuse. Does he agree that one of the things that those women particularly value when they go to a Women’s Aid refuge is that it is a service designed for, run by and informed by an ethos that is led by women’s experiences? If so, does he share my concern that increasingly services are being contracted out to organisations other than Women’s Aid—non-specialist organisations that do not have that necessary empathy with the women, however well-meaning they may be, and, indeed, can sometimes make quite crass decisions? For example, we heard just the other day of a provider that had advertised for new staff to work in its service and had actually put the address of the local refuge in a newspaper.
Again, my hon. Friend makes an excellent point. Certainly, the sheer dedication of the women working at the centres, which I have seen at Monklands Women’s Aid and elsewhere, is awesome, and I do not think that it can be replaced by commercial considerations. I therefore welcome what she has said.
I am again very grateful to the hon. Lady for her intervention. Although it was not going to be a theme of my speech—given the title of my speech, it should not be a theme—I am aware that a minority of men are also abused and I know that that is something that we would want to consider.
The women I met at Women’s Aid said that they feared for what their life would have been like if it had not been for Women’s Aid. Meeting those women first hand showed just how vital organisations such as Women’s Aid are to our country. In many cases they can literally transform an individual’s life for the better. I was given an opportunity by my local Women’s Aid office to meet some of the women they serve. Most people would never get that close and my abiding memory is of the warmth and friendliness that the organisation sends out in abundance, which colleagues have rightly acknowledged today.
We need to appreciate that women can be mentally and physically tortured by their partner and that they often turn up at Women’s Aid penniless, with nothing other than what they are wearing and with traumatised children who are in desperate need of urgent help. Women’s Aid is the last resort for victims who are in a state of anxiety and who—emotionally speaking—are standing on the edge of a cliff. In that situation, the last thing that women should be worried about is paying for refuge.
When women are provided with refuge, there is a full range of follow-on services to ensure that they and their children are safe. Along with support workers, the women plan their future and one of the most important factors taken into account is their safety and that of their children. Refuge is the foundation for all the services provided by Women’s Aid and for many women it signifies the basis of a new life.
As patron of the Wirral Women and Children’s Aid refuge, I know only too well the harrowing stories of women when they arrive in refuge, having suffered terrible abuse. Obviously, the imperative is that they are looked after straight away. However, time and again, we talk about how to break that cycle of violence and that continuation of abuse. Should that not be one of the main imperatives in future, because the figures on abuse have gone up year after year? We must break that cycle of violence immediately.
I agree absolutely with the hon. Lady, but if—as I saw at Monklands Women’s Aid—staff at centres are compelled to contemplate the financial circumstances that they are facing as an organisation, that might take away some of the time that they would like to allocate to the wider objectives that she quite properly identifies.
For many women, the fact remains that refuge is desperately needed in emergency situations when their lives and their children’s lives are at risk. I hope that I have convinced the Minster that Women’s Aid is indeed a special case.
Just 10 days ago, I had the opportunity to visit the Women’s Aid centre in Bangor; it is in North Down, but it is also responsible for Strangford, which is my constituency. The staff there very clearly indicated the financial squeeze that faces them. They illustrated it by talking about the future not only of the centre in Bangor, which is responsible for a large catchment area, but of the staff. If the Government do not address those issues, I fear that the future of Women’s Aid will have a question mark over it, not only in the right hon. Gentleman’s constituency but in mine.
Again, the hon. Gentleman speaks from experience and I passionately believe that we should not ignore such experience. He is dealing with what he sees in his constituency, day after day, and also reflecting our experiences in our own constituencies elsewhere.
Frankly, life and death issues are at stake here, and children can be victims of abuse too. We need to ensure the provision of free and safe refuge, which is crucial to the safety of women and children who are suffering abuse. That is an inviolate principle. At a time of desperation, people in Monklands, across Scotland and—as we have heard—throughout the United Kingdom must be afforded the opportunity to seek refuge. Most regrettably, domestic abuse is a considerable problem across our country.
Women’s Aid also performs a major role in the continued development of the children who are affected by abuse. In many families, children are often caught in the centre of a storm, and thus Women’s Aid focuses its attention on providing continuity for such children.
I urge the Minister to reconsider the current proposals on housing benefit. My plea today is that she reflects upon the comments that I and others make. Later, other hon. Members will undoubtedly make valuable contributions to the debate, and it is more than likely that they will be based on the kind of experiences that we have already heard about from hard-working, conscientious constituency MPs.
This subject and the real people who suffer domestic violence are too important for there to be a partisan Government. I am leaving an escape route for the Government when I refer to the unintended consequences of their proposals. If the Government ignore my representations, that could have a devastating impact on women across the country, leading to more women and children walking the streets.
We need the continuation of the marvellous back-up services that are provided by Women’s Aid and—lest we forget—managed by outstanding, caring people. Today I want not only to convince the Minister but to gain support from all parties. We cannot and we must not abandon women who are seeking refuge. In the words of the late Mother Teresa of Calcutta:
“Being unwanted, unloved, uncared for, forgotten by everybody…is a much greater hunger, a much greater poverty, than the person who has nothing to eat.”
I congratulate the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) on securing this debate on an incredibly important part of so many women’s lives. The right hon. Gentleman has already identified statistics that show us how important the subject is. He mentioned that one in four women will experience domestic abuse in their lifetime and that two women are murdered each week. That has been consistent over the past decade and not enough has been done about it. It is important, if I may say so, that a man—a gentleman—has raised this issue today. The more that men speak about the issue, the more that it is seen as important.
The physical, mental and financial abuse suffered has already been mentioned. I stress the importance of those three aspects. There is still a lack of understanding that domestic abuse can incorporate all three aspects. Physical abuse is easy to see, but mental abuse is not. People are less likely to understand it and therefore women are less willing to come forward and report it. The financial side that was mentioned earlier is about control. It often starts with financial control, which leads to other things.
I absolutely agree with the hon. Lady’s analysis. Does she agree, therefore, that we ought to be alarmed that one of the features of the universal credit is that it will be paid to one member of a couple? That may increasingly mean that women in abusive relationships will not have independent income, which will increase the possibility of financial abuse.
I think universal credit will help women in domestic abuse situations, and I am sure the Minister will address that issue in her reply. It is important to give women who are in such situations the support that they need and also emergency funds at the time they need them.
Does my hon. Friend agree that one of the benefits of universal credit, which I am sure we will hear more about, is that child benefit—as we know, it will be paid only to lower earners—will still be paid directly to women? That is important for protecting women’s financial situation. It is not going to be rolled up in universal credit.
I agree. That will make a difference to women in such situations.
In my constituency, domestic abuse and violence is at the top of the police agenda in west London. The police take it very seriously. The matter was brought home to me when I was out campaigning on the streets one day, as many of us do as Members of Parliament, and a 16-year-old boy asked me what I was doing. I explained and asked him, “What is the most important issue around here?” He looked me straight in the eye and said, “Domestic violence.” I was really moved by that. Perhaps some of the work that has been done on prevention and in schools is beginning to make an impact now and young people are beginning to understand that it is an important issue. I have visited refuges in my constituency. They are a haven for women who need them at their lowest point in life and at their time of need.
I raised the issue of housing earlier, because it is one of the important factors for allowing a woman to rebuild her life following an abusive situation. Hestia, an organisation in London, put together a report that I launched on international women’s day last week. The report made some good recommendations on housing, such as having someone at the council who is trained in and understands domestic abuse issues, so that they can make the right decisions. An important aspect is the link to temporary housing, which came home to me when a woman visited my weekly surgery one day. She has a seven-year-old child and for 18 months has been in one of the refuges in my constituency. She is currently on band C on the housing register, which in London probably means a wait of six or seven years to get proper housing.
I started a campaign to persuade Hounslow council—my council—to try to move victims of domestic abuse up the priority list. Avoiding temporary housing or bed and breakfast accommodation would really make a massive difference to the lives of women and their children, because temporary housing, unlike permanent housing, means more instability.
I totally agree with the hon. Lady. She will know that it is often necessary for women to move a long way from the family home and potentially to another local authority. Does she agree that local authorities receiving women who are fleeing abuse from a different part of the country should treat them with the same priority on the housing list? That is often not the case at the moment. I have a case in my constituency. A constituent wanted to be moved to the other side of Manchester—to a different local authority—but it simply was not willing to give her the same priority.
I completely agree; the hon. Lady is absolutely right. Women usually have to go far away from where they initially lived to ensure their safety, so they need councils to recognise that and give them priority. Even if councils initially gave priority to women with children, it would be a start. Then I would like to widen it to all women—all people—who are in refuges. It would make a tremendous difference and enable them to rebuild their lives. They have been through horrific circumstances and we have a duty of care and humanity to them. We should be able to say, “We will help you to create a fresh new start that is positive and could make a real difference to you and your children.”
I am pleased to see some of the work that has been done on rape crisis centres. We have opened additional centres in London. That will help to make a difference. I want to ask the Minister about work on preventive measures and early intervention, Some great work has been done on early intervention, including teaching young people about the importance of healthy relationships and respecting the right to say no. Preventive work is also being done with women at high risk. We have a sort of payment by results approach. Is there more that we can do to support the organisations that are doing great preventive work in that area and in schools?
I congratulate the Government on the call to end violence against women. The paper came out last year. I congratulate the right hon. Member for Coatbridge, Chryston and Bellshill on the positiveness of this debate. On such issues it makes me feel that we can work together to find solutions that will make a real difference. We can work across the House to find a solution that will make a long-term difference to many women who, unfortunately, go through horrific circumstances.
I am delighted to follow the hon. Lady the Member for Brentford and Isleworth (Mary Macleod). It is a pleasure to be in Westminster Hall under your chairmanship, Dr McCrea. I do not think that we have met in these circumstances before. I am delighted to be here today.
I want to pay tribute to my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke). I have known him for many years, long before he was a Member of the House. I know from previous experience that he has long been an advocate for support services for women, not only in his own constituency, but across Scotland. For Members who may not be as aware as I am of my right hon. Friend’s history, he was the president of the Convention of Scottish Local Authorities at one point.
My right hon. Friend has done rather a lot in his life—for a man who is only 45. He was president of COSLA when local authorities in Scotland were trying to come to an understanding of what violence against women—it was mainly, but not exclusively, violence against women—meant for those women, their families and their communities. He was part of the drive in Scottish local authorities to recognise the problem and deliver services. It is fair to say that that was not always easy. Many local authorities turned their face against the provision of such services, and many a battle had to be fought to establish the idea that there should be a discrete service focused on women’s needs as part of mainstream activity. I hope my right hon. Friend does not mind my embarrassing him, but we sometimes forget that people had a life before they came into Parliament, and it is worth putting part of that history on the record.
From my right hon. Friend’s analysis, we can see the benefit of the experience that he brings to this subject. He is an assiduous constituency Member of Parliament and he keeps in touch in a way many of us might replicate; I am not saying that we are all bad constituency MPs, but I can verify that he is one of those Members who is known to all his constituents and who knows all of them. It is not often that we get the opportunity to pay a little tribute to one of our colleagues, and I hope that his ego can stand it.
My right hon. Friend’s analysis of the situation was telling. He emphasised that it is not only statistics that are important. As politicians, we talk about statistics, but every one of them represents an individual person who is part of a family, a street and a wider community. That was echoed in the contribution by the hon. Member for Brentford and Isleworth and in other Members’ interventions.
There are two themes in the debate, but I want to concentrate more on one of them, although I appreciate that the Minister will wind up on both. One theme is the responsiveness of the benefits system to women—it is mainly women we are talking about. I hope, however, that that is not misunderstood; as the hon. Member for Hastings and Rye (Amber Rudd) mentioned, this is not just about women, and there are men who find themselves in this position. However, the overwhelming majority of cases involve women, so, for shorthand purposes, I will talk about them.
My point was that welcomed the fact that men are participating in a debate that is primarily about women. I totally support what the right hon. Lady says, but I also welcome the fact that it is not only women who are supporting action on this important issue.
I appreciate that. I may not have explained myself properly. I was saying that there are men who find themselves on the receiving end of domestic violence. However, I fully endorse the hon. Lady’s comment that this is not just a women’s issue; it affects women, but we should all be interested in it. I am more than happy to make that clear.
As I was saying, there is the specific issue of how the benefits system responds. There are then the wider elements that have been highlighted, and there is significant expertise at practitioner and political level on some of them. It is fair to say that some of the issues about the benefits system relate to continuing uncertainty about what the new Welfare Reform Act 2012 will deliver. People who rely on some element of benefit support and who are in or—this is increasingly the case, sadly—out of work face uncertainty, as the Government roll out their welfare reform programme. We have had some pretty robust debates on welfare reform, and I will not go back over them. However, we want to see what can be delivered under the new legislation to make sure people understand what its impact on them will be.
I want, therefore, to deal with some specific points about the impact of the new welfare legislation on women who face domestic abuse or domestic violence. As the Minister will be aware, the benefits system is designed for the many, but it must also show sensitivity to individual circumstances. I hope we all agree that such circumstances are sometimes difficult to anticipate and, even when we do anticipate them, difficult to frame provisions for in primary legislation. I hope that she will be able to give Members and, more importantly, those who face the trauma of domestic violence some confidence that what is being put in place can respond to individual circumstances. The test of any benefits system is not the high-level principles or the high-level legislation, but what the system means to an individual when they are at a point of need and how responsive the system is.
The right hon. Lady has come to an important point. Does she agree that one consideration for women who face the threat, or who are victims, of domestic violence in deciding whether to go to Women’s Aid or other such groups is often the impact that that could have on the benefits to which they or their family are entitled? The female at risk often gives more serious consideration to that than to the fact that she is being abused.
I totally agree. That echoes the point made by my hon. Friend the Member for Dumfries and Galloway (Mr Brown)—he is no longer in his place—who said that, given that uncertainty, women go back go the household where they were abused. If they have never engaged with the benefits system—and even if they have—there is an element of uncertainty about the time frames. It may not be entirely clear what will happen to their child benefit. Who gets the child benefit at the moment? Technically, it goes to women, but that might not be the case in some abusive relationships. As well as having to deal with violence and abuse, women face that financial uncertainty. We should not underestimate how difficult it is for women who are trying to get out of a violent situation not only to have to worry about the impact of the violence on them and their children, but to face uncertainty because they might be stepping off the edge of a cliff and they do not know what will happen. I totally endorse what the hon. Gentleman says.
Will the Minister tell us how organisations that offer hostel and supported accommodation will be treated in the assessment of housing support assistance in the new system? Currently, supported accommodation providers are allowed to breach the local housing allowance cap, because an element in the costs allows them to charge for additional support services, such as those provided by Women’s Aid or similar organisations, although Women’s Aid is obviously the principal provider.
We are seeing a real-terms cut in supported housing costs across the country, and we cannot run away from that. Local organisations that offer accommodation will therefore face a cut in any circumstances. Indeed, there is evidence to suggest that women’s aid organisations are receiving a greater funding cut than local authorities—there is a differential of 4% or 5%. There is therefore uncertainty, and if organisations that offer supported accommodation cannot make up the additional costs, there will be a real threat—this is what my right hon. Friend the Member for Coatbridge, Chryston and Bellshill was alluding to—to the financial viability and, indeed, the very existence of their hostels.
The Minister understands the commitment of those in organisations such as Women’s Aid who are able to give the support that is needed at a very difficult time; but although that voluntary activity is important, it is not the only element of the support that is given. There are services that have a cost attached to them, and we cannot ignore that.
Does my right hon. Friend agree that that might have an impact on providers of specialist services, such as those for minority ethnic women, or very young women? Such organisations cannot take advantage of economies of scale, by providing for large numbers, as some housing associations can; but if we lose that specialist provision, some very vulnerable young women will be reluctant to go anywhere for support.
What my hon. Friend says echoes what I said at the beginning of my speech about how the benefits system relates to specialised individual needs. I hope that the Minister will give us some comfort on that matter.
I suppose that my direct question to the Minister is whether those in receipt of local housing allowance who go into women’s hostels will receive just the basic housing allowance; or will the hostels be able to charge an additional amount, to be covered by the local housing allowance? My right hon. Friend the Member for Coatbridge, Chryston and Bellshill made that point starkly when he talked about the pressure on Monklands Women’s Aid. There may be a misunderstanding, and if so I am sure that we would love to receive clarification.
The Minister appreciates that some women and, as I have said, some men are forced to leave their homes as a result of domestic violence and need not just a roof over their head but significant support. The hon. Member for Brentford and Isleworth highlighted that.Like other hon. Members, I hope that the Minister will consider how to finesse the new system of local housing allowance to take account of those additional services. Otherwise, I fear for the long-term viability of women’s aid organisations that provide hostel accommodation.
I am echoing comments that other hon. Members have made when I say that some women who have left home may have little or no experience of budgeting, or may be in such a state that budgeting is the last thing on their minds. The direct payment of rent in those circumstances would benefit some people. I agree with the hon. Member for Hastings and Rye that, in principle, giving people the independence to pay their own rent is good practice. Indeed, we introduced that when in government, because it lessened some of the stigma effects—the “No DHSS here” signs and other such things—but we must be realistic and say that in some specific circumstances people would benefit from having their rent paid directly. I hope that the Minister will consider a range of exemptions, to allow those who want it and who feel that they need it at the time in question to access direct payment. I may be wrong, but I understand that the Minister, or the Department, is currently considering such exemptions. Perhaps she will be able to give us interesting news.
The Minister will be aware that on Monday a Delegated Legislation Committee debated the Jobseeker’s Allowance (Domestic Violence) (Amendment) Regulations 2012. The Government’s proposal to ease some of the JSA conditionality on those coping with domestic violence was unanimously accepted. We certainly welcome that decision, which implemented elements of the Welfare Reform Act 2009. Although there have been, as I said earlier, some robust Divisions on welfare reform provisions, the regulations in question were welcomed by my right hon. Friend the Member for East Ham (Stephen Timms).
However, I want to ask for the Minister’s view on an issue on which the views were not unanimous: how welfare reform will affect the capacity of women’s aid organisations to seek housing for women. There are serious concerns about the effect of the change to the shared-room rate of local housing allowance under the Welfare Reform Act 2012 on victims of domestic abuse and the possibility that it will make it difficult for some women to move easily from hostels to independent accommodation. The fact that the age limit is being extended from 25 to 35 makes it difficult, particularly for women who have been used to an element of independence. Is the age of 33, given all the other things happening in the life of such a person, really the time—I should not say “you”, Dr McCrea, but in Scotland “you” is the vernacular for “one”—when you should think about going into shared accommodation, perhaps with strangers? There is concern about that; I have certainly picked it up from women’s aid organisations.
I agree that that is a concern, particularly for women who have had traumatic experiences of violence. They will be reluctant to move into shared accommodation with people—potentially men—they do not know. Is not the likely result therefore that some of them remain in the refuge, reluctant to leave, so that there will be a sort of bed-blocking situation? Then other women who need to flee to the refuge will not be able to do so.
It would be interesting to see the evidence for that. I say that in all honesty, because the right hon. Lady’s argument is interesting, but for some women being in shared accommodation with other women in a refuge might be helpful. Shared support is important.
That is a fair point, and it was the argument prosecuted by the Minister on Monday. However, it is one thing to offer women the choice to stay in accommodation with other people; for many women that would not be their choice. Although it is anecdotally-based, the view that that requirement might be an impediment to moving women into their own accommodation has a strong resonance in women’s aid organisations.
The regulations passed on Monday proved that the general can be finessed to the specific, and I hope that the Minister will discuss with her departmental colleagues whether some easement of the relevant aspect is possible, so that women, many of whom have been their own person for a long time, will not be forced into a particular choice, but offered a range of choices. Are we really going to say to those women that the only option for them at 33 or 34 is to share a flat with someone else—and not necessarily, as my hon. Friend the Member for Stretford and Urmston (Kate Green)pointed out—people they know?
Another element on which I wish to question the Minister is the way that the new universal credit regulations will work for those who have had to leave home because of domestic abuse. Universal credit is a household benefit, and a test of its responsiveness to individual circumstances will be how flexibly it enables one allocation to a household to be deconstructed when one partner leaves the household, often in traumatic circumstances. That is a question not just of the speed of response, but of how that will give the confidence that was spoken of earlier. I appreciate that the decision makers dealing with these issues might not deal with them daily, but we need some confidence that they will be able to respond quickly to those who need to establish a second claim for universal credit under the new regulations.
I want to ask about women who flee violence and do not go to a refuge, or who leave a refuge to set up their own home. Does my right hon. Friend agree that another concern about the welfare reforms is the uncertainty about the localising of the social fund? Many women fleeing domestic violence depend entirely on the social fund to set up their new homes. Does she agree that it would be useful if the Minister indicated what guidance will be issued to local authorities under the Welfare Reform Act 2012?
That is a good point, and I am glad that my hon. Friend has slotted it in.
There is a question about how the social fund will be delivered to the devolved Administrations. Will it go directly to them or to local authorities? Will the devolved Administrations be the intermediaries? The reason why I highlight that in the presence of my right hon. Friend the Member for Coatbridge, Chryston and Bellshill is that he has had bitter experience with an allocation of funding at a UK level for respite care for disabled children. As a proportion under the Barnett formula, it went to the Scottish Government, but then—I shall be generous—we could not quickly identify where the money went. It appeared to be wrapped up in other funding packages; it certainly did not appear to be delivered as my right hon. Friend’s Committee intended.
I will wind up with one or two general points. We have focused to a certain extent on the benefits side, but there are wider issues. Although I appreciate that the Minister does not have direct responsibility for those wider issues, I hope that she will take them on board in her discussions with her colleagues. It is fair to say that women’s support services feel that they are facing a precarious future out there, owing to the uncertainty of funding. It is widely recognised that domestic abuse accounts for between 16% and 25% of violent crime in this country. It is not disappearing. It is there, and our police forces are aware of it.
Cuts are being made to policing. We can debate how many and how much. Street lighting is under pressure, as are women’s support services, including refuges. All those factors affect the wider issue of women’s safety in this country. I hope that the Minister will allay some of our fears and give my right hon. Friend and me confidence that she understands the issues and is prepared to see how the Government, particularly the Department for Work and Pensions, can respond.
I am sure that we would all agree that the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke)had a distinguished career before first coming to the House. He will be happy to know that we do not need birth certificates to be produced to agree with those comments by the right hon. Member for Stirling (Mrs McGuire).
It is a pleasure to serve under your chairmanship, Dr McCrea. I congratulate the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) on securing this debate. We have worked together on numerous issues in recent years, and I know that his tenacity and commitment are second to none. I underline how important it is that we debate this issue. My hon. Friend the Member for Hastings and Rye (Amber Rudd) said that it is an issue for both men and women, and the fact that the right hon. Member for Coatbridge, Chryston and Bellshill secured this debate underlines that.
On behalf of everybody who has contributed to this debate, I pay tribute to all the organisations involved in supporting women, men and children facing the ordeal of domestic violence. I marvel at the work of the Basingstoke Rape and Sexual Abuse Crisis Centre in my constituency, which employs a dedicated group of people who bring a much-needed service to an important part of my constituency. I am sure that all hon. Members can look to similar organisations in their constituencies.
I am grateful for this timely opportunity to discuss how the welfare system supports and will support those affected by domestic violence. As hon. Members have mentioned, significant changes will take place as a result of the Welfare Reform Act 2012, particularly the introduction of universal credit. Domestic violence is a dreadful act of abuse, and the Government are absolutely determined to tackle it. There are many matters that I would like to discuss in response to the issues raised by hon. Members. I will try to address each in turn.
It is unacceptable that 7% of women and 5% of men reported having experienced domestic abuse in the past year. That is equivalent to around 1.2 million women and 800,000 men. The violence against women and girls action plan, launched in March 2011, was refreshed earlier this month and sets out numerous commitments that the Government have made across the board: to improve prevention, which my hon. Friends discussed in interventions; to challenge attitudes and behaviours by taking action early to ensure that the perpetrators of violence are brought to justice; to support victims of abuse in all its forms better by working with partners to reach out across communities; and to ensure that Government support is appropriately tailored to victims’ individual needs.
To pick up on the points made by my hon. Friends the Member for Wirral West (Esther McVey) and for Brentford and Isleworth (Mary Macleod), it is absolutely right that prevention must be at the heart of our approach, as well as breaking the cycle that we as constituency MPs all too often see in action. We can do so by working with children, as my hon. Friend the Member for Wirral West highlighted in her contribution.
I am mindful of hon. Members’ concerns about future funding for services that support victims of domestic violence. I hope that hon. Members will be content to hear that the Government constantly consider ways to strengthen protection for victims and that we have taken a different approach by ring-fencing nearly £40 million of stable funding up to 2015 for specialist local domestic and sexual violence support services and rape crisis centres in England, as well as funding the national domestic violence and stalking helplines. It is the first time that funding has been ring-fenced on a stable basis for domestic and sexual violence victims, and I am clear that local authorities should view funding for services to support victims of domestic violence as essential.
The right hon. Member for Coatbridge, Chryston and Bellshill will also be aware that in Scotland, decisions on funding applications for projects that focus on tackling violence against women will be announced shortly by the Scottish Government. I am pleased, as are key partners such as Scottish Women’s Aid, that funding for violence against women, including victims of domestic abuse, will be maintained throughout the spending review period. I hope that he will welcome that as a concrete commitment.
The right hon. Gentleman’s main point involved housing benefit, but other Members discussed the broader issue of the benefits system, so I will address that first, hopefully providing some of the reassurance that hon. Members seek in these times of change. We heard from the right hon. Member for Stirling (Mrs McGuire), who spoke for the Opposition, about this week’s approval for proposed changes to jobseeker’s allowance regulations. That legislative change will now come into force on 23 April and allow victims of actual or threatened domestic violence who are in receipt of jobseeker’s allowance to be exempted from job-seeking conditions for a period of up to 13 weeks, provided that evidence from an appropriate representative can be produced and that other conditions are met. That will continue with the introduction of universal credit.
It is right that victims of domestic violence who claim JSA or are new to claiming it can spend some time focusing on stabilising their lives. As we have heard from hon. Members today, that is a challenging time for the individuals concerned, and they need time to get their lives and, where applicable, their children’s lives straight. It is also right that they can do so without having to demonstrate that they are actively seeking or available for employment, or face the threat of sanction. I hope that hon. Members will feel that that is a clear sign of the Government’s commitment.
A further sign of how seriously we take the issue is that alternative support remains available via the existing JSA domestic emergency exemption for victims who are either unable or perhaps unwilling to produce evidence. We have a twin-track approach, which is important to note.
While the easements that operate under JSA are, as I have explained, commendable, they are somewhat complex. That is why the Government are already taking steps to clarify them as we move forward with universal credit. That shows our clear commitment in the area, and I hope hon. Members will welcome that.
On the subject of today’s debate, housing benefit, some victims of domestic violence live in a hostel or a refuge. Currently, many, if not all, refuges have their rents met in full through housing benefit, which is usually paid directly to the hostel. Refuges are exempt from the local housing allowance, and residents have their housing benefit worked out using rules that recognise the additional costs that the hon. Member for Stretford and Urmston (Kate Green) talked about in her intervention.
The Government consulted last year on changes to the way in which housing benefit meets the costs of people living in supported housing, such as refuges. Our consultation paper, “Housing benefit reform—Supported housing”, was published on 19 July 2011, and the consultation period ended on 9 October 2011. We are considering the responses to the consultation and intend to bring forward proposals as soon as possible for implementation in 2013. Let me clarify that we do not intend to change the way in which payments of housing benefit are made to people living in hostels or refuges. All tenants who live in the social rented sector, as well as those living in supported housing, normally have housing benefit paid directly to their landlords. That will continue until housing benefit no longer exists and is replaced by universal credit between 2013 and 2017.
There are a number of specific points, such as the one just made by the right hon. Lady, that I want to go into. I will deal with her point first.
We currently support around 170,000 claimants living in supported accommodation through housing benefit. They receive on average an extra £40 a week in housing benefit in recognition of extra costs. We expect higher payments for that sector to continue. I hope that the right hon. Lady feels that that starts to answer some of her points.
The right hon. Lady also asked several questions about how hostels will be treated under universal credit. Currently, we are considering how we will support housing costs for people in hostels under universal credit. Our consultation is helping to inform that, and we will involve stakeholders in the process before we issue regulations.
The right hon. Lady asked some important questions about people who are subject to the shared accommodation rate. I reassure her that the situation applies to a distinct group of individuals: those who are under 35, on their own, with no children, and moving into private sector accommodation. She is probably already aware that many exemptions are in place for vulnerable groups—for instance, those who receive the severe disability premium.
We have also introduced several further exemptions from this January—for example, for ex-residents of homeless hostels who have received help to resettle in the community. I reassure the right hon. Lady that if there are still individuals who, local authorities feel, require their own space, discretionary housing payments are also available, and they have been increased by some £130 million. That will allow local flexibility and discretion, which can make all the difference in such cases.
I appreciate the exemptions that have been made. However, housing organisations such as Crisis and Shelter have pointed out that if an exemption for people leaving homeless hostels is enshrined in legislation, there seems to be no objection to having the same exemption for women leaving refuges.
Our approach is to empower local authorities to have the sort of discretion that can make all the difference in such cases. Each individual case is different, which is why the discretionary housing payments are important and why we are putting so much more taxpayers’ money into that—to give local authorities the flexibility that can make all the difference.
The right hon. Member for Coatbridge, Chryston and Bellshill said that he felt that there may have been some indication of a reduction in the amount available to pay for refuges. I make this clear to reassure him: the consultation on refuges that we have been through is not intended to be a cost-cutting exercise. We want to make the rules fairer and ensure that help is better targeted on those who need it. It is about ensuring that the money that we have reaches those who need it most. I hope that that reassures the right hon. Gentleman about housing benefit. His debate is timely because we are moving forward at the moment to talk to stakeholders on that issue before we formulate regulations and before they are looked at through the positive procedures of the House.
Hon. Members also talked about universal credit and how that will affect people who are at risk of or have experienced domestic violence. I believe that the system will hold a great deal of good for individuals who find themselves in such a situation. One of the important contributions—as a constituency MP, I can empathise with this—stressed that sometimes the issue is about the timeliness, or the lack of it, of support in place for women who find themselves in a refuge. A delay in receiving financial support at that point can be extremely distressing. The current complexities of the benefits system can do little to help speed that process up. That is why I feel strongly that universal credit will greatly benefit some of the most vulnerable groups in our communities.
Sometimes, it is important to pay housing benefit directly to refuges to secure their financial future. Private landlords may get into trouble or have difficulty, but they are supported by the law and can enter into negotiations with their tenants. For refuges, having a secure financial commitment is important to their survival.
My hon. Friend speaks with great passion on the subject, and I thank her for her intervention. She is pushing me a little further than I am able to go at the moment, but I hear loud and clear what she is saying about the importance of ensuring that there is some certainty there. I would like to make it clear to her and other hon. Members that the work that we are doing is not intended to unsettle or jeopardise the financial futures of the refuges. That is not something we intend to do. We do not want to do anything to damage the sector.
Universal credit will be a simpler way of people applying for benefits, and will significantly benefit this group of women particularly. We will introduce a system of payments on account, so that some individuals can get payments made, even if not all the details of their claim can be sorted out straight away. Again, simplification and a fleetness of foot will assist people in these very difficult situations.
Throughout the development of the reform—universal credit—we have worked very hard to ensure that safeguards are put in place to protect vulnerable people, including victims of domestic abuse. That includes those still residing within the household and those who have been forced into a refuge. The right hon. Member for Stirling, who speaks for the Opposition, highlighted the single monthly payment made to households. We have put that in place because we feel that it is important and integral that it is the family’s responsibility to decide how a payment is made and to manage their own finances.
However, as the right hon. Lady said, of course, there will be exceptional cases. It is important that any system can deal with and support those exceptional cases, where a single payment into one account may compromise the safety of household members. We have therefore ensured in the Welfare Reform Act 2012 that there is a power to split payments between members of a couple in the case of a joint claim. The hon. Member for Stretford and Urmston also raised that.
The Minister is right that there is the option for universal credit to be split between members of the household. However, does she not agree that it will be difficult for a woman to seek that in a situation where there is financial abuse, as was mentioned by the hon. Member for Brentford and Isleworth (Mary Macleod)? I realise that it is well beyond the opportunity to get the legislation changed, but will the Minister at least assure me that the Government will keep a careful eye on the impact on those women of a single payment to one member of the household in relation to the financial abuse that the hon. Member for Brentford and Isleworth rightly raised?
I absolutely assure the hon. Lady that, in all aspects of the reform that we are undertaking—whether it is this or another aspect of the Welfare Reform Act—we will keep a very close eye on how things are working in practice. She is absolutely right: we have to do that to ensure that those who are particularly vulnerable and in difficult situations are getting the support that they need.
Under universal credit, there will continue to be a 13-week exemption to conditionality where there is evidence of threatened or actual domestic violence. In addition, the application of conditionality overall will be more responsive to the needs and circumstances of individuals. Importantly, advisers will be able to have crucial discretion to vary or temporarily lift requirements where a claimant is subject to a change in circumstances such that they cannot reasonably be expected to take even limited steps into work. That discretion can help individualise the support that we give people in those difficult circumstances.
The situations faced by victims of domestic violence are very varied and therefore, beyond a three-month exemption, we believe that it is right to take a case-by-case approach and give advisers such discretion. As part of the move towards self-sufficiency, in the cases we have talked about, universal credit will be paid directly to tenants rather than to landlords. There are elements around direct payments that are still being considered, and the role of hostels and refuges are part of that. However, let me assure hon. Members that we will do that in a way that protects the income of social landlords. The Government have absolutely no intention of doing anything that will damage the sector. I hope that the right hon. Member for Coatbridge, Chryston and Bellshill will find that commitment a reassurance at this time.
The debate is extremely timely. My colleagues in the Department and I will consider very carefully all the comments made by hon. Members from both sides of the House. We need to examine carefully the circumstances in which alternative arrangements for payment of universal credit will need to be made. We will start a process of working with key stakeholders over the next few months on what should be included in regulations, with a view to publishing a draft set of regulations in due course. I assure hon. Members that I am committed to ensuring that the right safeguards are in place, particularly in the case of victims of domestic violence. Again, I underline my thanks to hon. Members for sharing their thoughts on this matter. I assure them that they will help inform our discussions as we move forward.
Freedom of Information Act
I requested this debate to seek clarification about a specific piece of Cabinet Office guidance that was apparently issued to the Department for Education last year to clarify its responsibilities under the Freedom of Information Act.
Ministers from both Departments—the Cabinet Office and the Department for Education—have refused to answer any of my parliamentary questions about the guidance, except to confirm that it was issued. However, this is a matter of pressing public importance about which I have sought answers for nearly eight months. There is evidence now in the public domain that the Secretary of State for Education and his advisers used personal e-mail accounts to discuss matters relating to the award of public money and the Building Schools for the Future programme.
Disclosure of those e-mails was refused because Ministers wrongly appeared to believe that the e-mails were not covered by the Freedom of Information Act. The Secretary of State has since told me, at a recent hearing of the Education Committee, that he believed that to be the case because of the specific Cabinet Office guidance that is the subject of today’s debate.
I will briefly summarise the background and say why the matter is of such pressing public importance that the guidance should be published without delay. In August and September last year, in the leaked e-mail obtained by The Guardian, the Secretary of State’s adviser told officials that he would no longer respond to inquiries on his official departmental e-mail address and urged them to do the same. At the time, Ministers in the Department appeared to believe that private e-mail addresses were not covered by the Freedom of Information Act.
Further e-mails were then revealed by the Financial Times that had been leaked to them by officials in the Department for Education. Those e-mails revealed that personal e-mail accounts had been used by the Secretary of State and by his advisers in relation to Government business. Requests were made for some of the leaked e-mails in question but those requests were refused. The Secretary of State told me in January at the Education Committee hearing that the decisions were taken clearly on the basis of guidance issued by the Cabinet Office. That guidance remains unpublished, may or may not have been written down and has since been discredited, hence my keenness to shine a spotlight on that mysterious guidance today. It apparently contradicts earlier guidance given to the Secretary of State for Education by his Department’s chief freedom of information officer, stating that personal e-mails were covered by the Act. The Information Commissioner also clarified that in December last year, but the Secretary of State confirmed to me that he had ignored both those pieces of guidance and preferred instead to rely on the mysterious piece of guidance apparently issued by the Cabinet Office.
I would like to know why the Cabinet Office is still refusing to publish the guidance given the Secretary of State’s constant references to it, its apparent centrality to decisions taken and the seriousness of the allegations that have arisen against the Department for Education. Will the Minister publish the guidance now, so that we can assess whether any attempt was made to evade the requirements of the Freedom of Information Act? The Minister for the Cabinet Office told me that he would not publish it due to a long-standing convention, but can the Minister tell me why he and his colleagues cannot even tell me in what form it was communicated? Surely there is no convention around that? Freedom of information requests suggest that the DFE holds a copy of the advice, but according to press and FOI queries to the Cabinet Office, it says that its guidance was, variously, not written down, or not held. Can the Minister explain this contradiction for me today?
I congratulate the hon. Lady on securing the debate. She will be aware of the controversy about the whole aspect of freedom of information requests in recent months. Does she agree that the matter is not only about the case she is outlining, which is very interesting, but the whole aspect of the abuse of freedom of information, and its cost?
I very much echo the hon. Gentleman’s comments; this kind of affair damages us all, which is why I am seeking answers today.
I would also like to understand how the situation could arise. That understanding is important if the commitment to transparency, which was made very clearly in the coalition agreement, is to have any meaning. Why was the guidance written by the Cabinet Office in the first place, given that the Department for Education’s chief freedom of information officer had already clearly communicated his view? Who requested the guidance? When was it communicated by the Cabinet Office? Was it sent only to the Department for Education? If not, has it now been revoked for every Department, given the extreme criticism of it by the Information Commissioner? In his recent ruling, he said:
“The DfE contends that the information is not held because the email in question is ‘political’. However, almost all the work of a special adviser, by definition, has a political dimension to one extent or another. Equally, the Secretary of State is a political figure…There is therefore an inevitable overlap between matters of party policy and government policy. To accept the DfE’s interpretation would be to, in effect, create a blanket exemption for communications between ministers and special advisers. In the Commissioner’s view the DfE has created an artificial distinction between ‘official’ information which is subject to the Act and ‘political’ information which is not.”
Did this interpretation, or description, of a blanket exemption from the Act arise directly from the guidance issued by the Cabinet Office? If so, can the Minister tell me how he, or officials in his Department, came to interpret the guidance in that way? Will he tell me who wrote it? Was that person aware that the DFE’s chief FOI officer had already issued contradictory advice? Did the person who wrote it have any discussions with the Information Commissioner, or indeed the Ministry of Justice, which holds overall responsibility for the Freedom of Information Act, before issuing it? Who was it sent to in the DFE? Did the Minister personally sign it off? If not, will he tell me who did?
I am seeking to understand how a situation can arise where the Cabinet Office’s guidance explicitly contradicts that of the DFE’s own chief FOI officer and the Information Commissioner, yet the Department is able to choose which guidance it wishes to follow. Does that not cause the Minister concern? Is it how the Government operate? Can Departments pick and choose different policy advice and guidance depending on which they prefer to follow? Does the Minister think it is acceptable that the Government are in the farcical situation where the DFE is apparently relying on guidance that the Information Commissioner has discredited, which is contradictory to the guidance issued by the Department itself, and which the Government still refuse to publish?
Less than two weeks ago, the Information Commissioner issued a ruling that the information withheld by the DFE amounted to departmental business and must be disclosed. The Secretary of State is currently considering whether to exercise his right to issue a refusal notice giving valid reasons for withholding it, as I understand. In the meantime, he still does not appear to have accepted the guidance of the Information Commissioner and his own Department that states clearly that those e-mails are covered by the FOI Act.
In January, I asked the Secretary of State a series of questions at a hearing of the Education Committee to clarify whether he or his advisers had ever used private e-mail accounts to conceal information from civil servants or the public that related to departmental business; whether he had ever directed civil servants not to answer FOI requests on specific issues; and what steps he was taking to prevent the deletion of private e-mails relating to Government business and deemed by the Information Commissioner to be covered by the FOI Act. It has since transpired that officials in the DFE repeatedly destroyed official Government records—130 e-mails, according to reports by the Financial Times. I have the transcript of the Secretary of State’s appearance before the Education Committee. I repeat that it is not clear, from his answers, whether he or his advisers sought to use, conceal, or delete those personal e-mails to evade the Act. What is clear is that the Secretary of State says that he was following Cabinet Office guidance in his actions.
There is an urgency to this matter, as it is unclear whether private e-mails relating to Government business are still being deleted. I asked the Secretary of State about that at the end of January at the Select Committee hearing, and he would not confirm whether that was or was not the case. Will the Minister please clarify whether that revised, updated guidance has been issued, and that, in light of the Information Commissioner’s ruling, the guidance has changed? Has revised guidance gone to every Department? If not, what is the delay? Given the clarity of the Information Commissioner’s statement, it seems extraordinary that that would not have happened. If it has not happened, does it mean that the Government are currently without guidance on the use of private e-mails and the FOI Act?
Does the Minister know whether the DFE has decided to fight the decision notice, and if so, on what grounds? Perhaps the Minister cannot answer that, but can he answer this: if the Secretary of State for Education decides to fight the decision notice from the Information Commissioner, will the Cabinet Office defer publishing new advice until the case is finalised? If so, that could mean that the FOI Act is effectively inactive and subject to a blanket exemption for a year. That is surely a broken commitment, given the prominent commitment to transparency in the coalition agreement. What is being done to ensure that this situation cannot happen again?
I apologise to my hon. Friend for missing the beginning of her remarks—the debate started earlier than expected. Would it not be a ludicrous situation if the Government tried to uphold the position that private e-mails are not covered by the Freedom of Information Act, since that would, in effect, allow the Government to create a government in parallel using private e-mail accounts to evade their responsibilities under the Act?
Absolutely. Evidence has emerged in the press that that is exactly what has happened in this instance, which is why I am seeking to clear up the matter today.
There is another thing that does not, so far, stand up to scrutiny. The Department for Education’s initial response to the press reports was to say that only political e-mails were sent through private accounts. The Secretary of State subsequently repeated that claim to the Education Committee. If the Department genuinely believed the e-mails were not governmental, why did it ever seek advice on the applicability of the law to private e-mail accounts? Can the Minister shed any light on that? Did he or his officials have any conversations with the Department, the Secretary of State or his advisers about it? That is why it matters so much to so many of us in the Opposition. Not only do the e-mails relate to decisions of crucial public importance to young people and their families—not least about Building Schools for the Future—but they have created a situation that looks distinctly murky. That affects and discredits us all, and must be clarified urgently.
As a member of the Education Committee, I attended the hearing. Has my hon. Friend reflected on the fact that in attempting to answer, or not answer, her questions at that Committee hearing, and by evading a real answer to her questions, the Secretary of State, I am sorry to say, seemed to find some amusement in the whole matter? That is a very sad thing, given the time and effort that my hon. Friend has put just into trying to uncover the truth.
Indeed; and also because of the significance to the people that we represent throughout the country of decisions that were made and discussed using private e-mail accounts.
I have been seeking answers for seven months and have not been able to get any. In that time, it has been alleged that Ministers repeatedly destroyed official Government correspondence and deliberately used private e-mail accounts to avoid the requirements of the Freedom of Information Act. They may still be doing so. The failure to answer questions about this matter makes a mockery of Parliament, the Freedom of Information Act and the commitment to open government.
I realise that Governments are reluctant to share information, sometimes for understandable reasons, but I share the Government’s view that transparency is crucial. In the words of the coalition agreement, they should
“throw open the doors of public bodies, to enable the public to hold politicians and public bodies to account. We also recognise that this will help to deliver better value for money in public spending.”
If that commitment is to have any meaning, frankly, Ministers must up their game. I should be grateful if the Minister would give a commitment today that the original guidance will be published, that in light of the Information Commissioner’s ruling, clear renewed guidance will be issued urgently across the Government regarding the application of the FOI Act to private e-mails, and that if he cannot answer all my questions, he makes a decent attempt to answer those he can, writes to me about the rest and no longer seeks to hide behind the much overused phrase, “long-standing convention.”
It is a pleasure to serve under your chairmanship for the first time, Dr McCrea.
I follow convention in congratulating the hon. Member for Wigan (Lisa Nandy) not just on securing the debate, but for the way that she presented her case. We served together quite happily, I think, when considering the Public Bodies Bill. I am not surprised that she has been pursuing this matter forensically for many months, through the Education Committee and this debate.
I will do my best to answer the questions that I can. The hon. Lady will know that I cannot answer them all; in fact, I cannot answer the majority and I cannot speak for the Secretary of State for Education. I am certainly not going to respond to allegations about any destruction of information or materials, because they remain just that.
I am sorry to ask the Minister to give way so quickly. I have just handed him a list of questions for the Cabinet Office, to which I should be grateful for answers. If he cannot answer them today, I should be grateful if he looked into them and got back to me.
I am grateful for the hon. Lady’s clarification. I was wondering what the piece of paper that was thrust into my hand was. It is a long list of questions and we will do our best.
In some ways, the hon. Lady was challenging the Government on their important commitment to transparency and, because I feel proud of the Government’s direction of travel, it is important to put this debate in context by mentioning some things that we are doing to improve transparency, including in the Department for Education. The Secretary of State mentioned, in evidence to the Select Committee, increased transparency about schools performance.
Information is power and we are giving people more power. For example, the Government are now publishing details of ministerial, special adviser and permanent secretary meetings with external organisations; details of hospitality and gifts received by Ministers and special advisers; senior officials’ salaries; and detail on Government procurement card spend. We are also publishing information on many other items of public interest, such as hospital infection rates, crime maps—which have been an enormous success with the public, with more than 430 million hits since their launch—and data on general practitioners’ performance. More than 7,500 data sets have so far been published through the combined online information system on data.gov.uk, more than any other comparable transparency service in the world.
The information published enables people to see all Government expenditure, browsing by date, spender, recipient and amount. All Government contracts over £10,000 are to be published to ensure openness and fairness.
The whole Government accounts were published in November 2011 and each Department has published a business plan, setting out how it will achieve its reforms, how much money is being spent and what it is being spent on. Reports against these deliverables are published monthly on the No. 10 website.
Transparency does not just extend to central Government. For local authorities, there is increased local accountability and transparency of councils. We can see, down to the last £500, what is being spent in our name by our local authorities, including salaries, names, budgets and responsibilities of staff paid more than £58,200. There is detail on councillor allowances and expenses and we can see organisational charts, pay multiples, copies of contracts and tenders to businesses, which are important to the voluntary and community sector.
The point that I am trying to make—I will give way after doing so—is that this level of transparency is unprecedented and today’s debate, which challenges the Government and questions our commitment to transparency in some ways, needs to be seen against this background. So much of the long list that I read is self-evidently good and in the public interest. Why did it not happen before? The hon. Lady and other Opposition Members may have an answer, since they were in power for 13 years.
The Minister has read a long, impressive list of things that have been published under the Freedom of Information Act. Does he agree that it is extraordinary that guidance of such central importance to decisions made across the Government is not on that list? Will he commit to publishing it immediately?
The hon. Gentleman says it is waffle, but I am proud, because in less than two years we have achieved all that I mentioned—which is more than his party did in 13 years in power—in giving people information about what the state is doing in their name. I do not describe it as waffle; it is hard information that is in the public domain now.
This debate is about the use of private e-mails and their relation to the Freedom of Information Act. We have to recognise that this complex issue has been the subject, as the hon. Lady says, of a recent decision by the Information Commissioner, published on 2 March. In his decision notice, the Information Commissioner makes it clear that at the time the Department for Education received the FOI request, there was no guidance in existence. This was a new area that had, perhaps, not been anticipated. The commissioner acknowledges that the full implications of the FOI Act in relation to this issue may not have been well understood at the time. He states in his decision notice that he
“would say first of all that he acknowledges that this is a novel issue and one which may not have been anticipated when the Freedom of information Act was passed…Given the unique role played by special advisers it is not always easy to draw a clear line between official information held by a public authority and party political information.”
It is clear that the Information Commissioner’s decision notice raises important issues that the Government are taking seriously and considering.
For reasons that I am sure hon. Members will appreciate, a time period is set out in the FOI legislation within which the Government will consider whether to appeal or release the information. I cannot answer the hon. Lady’s question about whether any decision has been taken. The Government have 28 days from the date of the decision notice to decide whether to appeal. If there is no appeal, the Government have a further seven days to release the information or assert a relevant exemption. Therefore, I am sure that hon. Members will understand that it is not appropriate for me to comment on the decision while such consideration is under way.
The hon. Lady has asked me to make public the advice given by the Cabinet Office to the Department for Education on FOI and private e-mails. She asserted at the start of her speech that she had not received any answers on this, but in fact she has, although it is not necessarily the answer that she wants. In a written answer from the Minister for the Cabinet Office, she was informed that the Department will not publish any guidance on private e-mails and the Freedom of Information Act given to the Department for Education, because
“Information relating to internal discussion and advice is not normally disclosed.”—[Official Report, 6 February 2012; Vol. 540, c. 63W.]
That has been so for a long time and we will stick to that line, because the Government do not disclose what is effectively internal advice. Doing so would prejudice the conditions under which such advice was given. That is a long-standing convention, and it is entirely respectable for the Government to stand by it. Today’s debate has not changed my view and, I am sure, will not change the view of the Minister for the Cabinet Office and Paymaster General. We both believe, as Ministers before us have believed, that advice between officials and Ministers should remain confidential.
The hon. Lady intervenes from a sedentary position. The answer to that question is that we will not disclose the advice or the manner in which it was communicated—we would not normally disclose that, and we will not do so now.
The more substantive issue is what happens now, in that the Information Commissioner has given a view and the Government must respond. The hon. Lady asked when the Cabinet Office will publish its guidance. I have made it clear that the Government are considering the Information Commissioner’s recent decision notice and his guidance, published in December, and will publish their guidance as soon as it is ready, but the issues are complex and require detailed consideration. [Interruption.] The hon. Lady laughs, but we must get it right: the question is new, it is complex and it was not anticipated at the start—it needs to be got right. The Cabinet Office is doing that work, which is well under way. When our guidance is ready, it will be issued.
The debate is valid and raises important issues that the Government are considering and taking extremely seriously. I do not recognise what the hon. Member for Gateshead (Ian Mearns) said about the Secretary of State’s apparent flippancy in Committee—I read the transcript; I was not there—but, given that in that part of the inquiry he was being interviewed under Paxman-like conditions by the hon. Member for Wigan, his replies were serious and to the point. However, important issues, which we are taking seriously, have been raised and I ask hon. Members to allow consideration to take place in the appropriate way. Within the time frame set in tribunal rules, the Government will decide whether to appeal or to release the information originally requested, in response to the Information Commissioner’s decision notice of 2 March. The Government are also considering the guidance issued by the Information Commissioner in December on freedom of information and private e-mails, and the Cabinet Office will issue further guidance to Departments in due course.
Sitting suspended for a Division in the House.
It is a pleasure to serve under your chairmanship, Dr McCrea. I am grateful that the Minister is here to respond to the debate. He and I usually discuss high-technology issues, but today we will talk about low technology and local newspapers in print form. I am pleased to be able to talk about the importance of local media to small towns and cities.
Stevenage has a number of media outlets, including The Comet, the Stevenage Advertiser and Jack FM—a good local radio station on which I will be holding a phone-in surgery on Saturday, because it has a wide impact in the local community and reaches many people. The importance of local newspapers to small towns and cities lies in community cohesion. They are valuable assets to local communities. In my area, they report everything from Stevenage football club’s meteoric rise from non-league football two seasons ago to league one and its furthest ever placement last week against Tottenham in the fifth round of the FA cup at White Hart Lane, where it unfortunately lost, to stories about the Rainbows, the Guides, grass-roots football and other small local charitable organisations that have no opportunity to put forward their message elsewhere. I am pleased to be able to support local newspapers and media outlets.
I want to talk about some facts. We know that 33 million people in this country read a local newspaper every year. We also know that there are thousands of titles—well over 6,000—that 71% of adults read a local newspaper and that 14 million more people read a local newspaper than read a national newspaper. Local newspapers have a huge spread in local communities.
It is a pleasure to serve under your chairmanship, Dr McCrea. I thank my hon. Friend on obtaining this important debate. Does he agree that papers such as the Redditch Advertiser and the Redditch Standard, which are local free sheets and the only newspapers that we have in Redditch, are vital to local people, especially the elderly who would otherwise be cut off from local news?
My hon. Friend makes an important point about the valuable titles in Redditch. Local newspapers reach some of the most vulnerable people in our communities and push forward a positive message on everything: Government news, local authority news, planning permissions, charitable events and what is going on in the local community. The Prime Minister said that
“local papers are hugely important in helping to build a bigger, stronger society. There is a massive gap between the state on the one hand, and the individual on the other, and local papers help fill the space in between, galvanising readers into action.”
Does my hon. Friend agree that local media are vital to small towns such as Dartford and Stevenage, because they are often too large to have parish magazines dedicated to their area, but too small to have, for example, regional television covering just their area?
Sitting suspended for a Division in the House.
Before the Division, we were discussing what the Prime Minister said about local newspapers being a great vehicle for social change, and I want to refer to a couple of campaigns that I have run with local newspapers in my area. One campaign sought to bring the carnival back to Stevenage, and that had great success last year. We are currently running a campaign with a different newspaper to have a satellite radiotherapy unit based at the Lister hospital in Stevenage. Patients from Stevenage who undergo radiotherapy currently have to travel nearly 4,000 miles during the course of their treatment. We think that that is a little too far, and that treatment should be available somewhere closer.
That issue also affects my constituents in the neighbouring constituency of North East Hertfordshire. Does my hon. Friend agree that the local media have been extremely helpful in supporting that campaign and fighting to help cancer sufferers, who currently have a difficult journey, to receive treatment?
My hon. Friend makes a good point; he has been a great advocate and supporter of the campaign and has led the way in North East Hertfordshire. As he rightly says, without the support of local newspapers, the campaign would not have achieved such massive community penetration or have been mobilised into a big, cross-party issue locally. The campaign is going well.
We are also running a campaign to stop the expansion of Luton airport because, although Luton would get all the jobs, Stevenage and particularly North East Hertfordshire would get all the aircraft noise. If there are to be quieter aircraft, we are keen for them to turn up, and we would be interested in getting the truth about those figures. Local newspapers are a great vehicle for change and something that I support.
Local newspapers face great competition from new media, although many of them are embracing that competition and in many ways turning themselves into embryonic versions of the local multi-media companies that the Minister and I support so well. Local newspapers are trying hard to move forward by doing a lot of work on the internet, accessing a variety of other platforms and starting to move into radio and so on. However, they face a great deal of competition, and although they are tackling that head-on, there is concern over the behaviour of some local authorities.
I would be interested to hear the Minister’s views on whether local authorities should spend taxpayers’ money on advertising in local newspapers, as opposed to producing propaganda that a large number of local residents are not particularly interested in reading, so it quickly ends up in the bin. For example, the Stevenage Chronicle is not particularly well supported. The problem with such propaganda is that taxpayers have no interest in it, and given the choice they would scrap it right away rather than see other services reduced. The local media market is distorted because local newspapers come under severe financial pressure when local authorities—whether county or district authorities—produce their own material.
What are the Minister’s thoughts about the current Department for Transport consultation on removing the mandatory advertisement of things such as road closures and planning applications in local newspapers? It is very important that that is reviewed. I am interested in his views, simply because I think that such a move will undermine further the financial viability of local newspapers.
My hon. Friend raises an extremely important point. Just this morning, the editor of the Ipswich Star, Nigel Pickover—there is also the Felixstowe Star—raised that point with me. I am sure that my hon. Friend agrees with me that local papers are very important for democracy and holding representatives to account and for conducting campaigns, which he has mentioned. Taking away some of their regular revenue puts more papers at risk.
My hon. Friend makes a very important point much more eloquently than I managed to. She got to the heart of the issue, which is that that revenue will be taken away from local newspapers and instead of our having the disinfectant of transparency and local communities being able to understand what is going on, much of that information will be hidden away on local authority websites and will not get the attention that it so richly deserves.
This is very important. It comes down to a simple point. I accept that we are not in the business of subsidising local newspapers and that taxpayers should not pay for advertising in that sense. However, we should not be in the business of encouraging local authorities to compete against newspapers by taking that advertising revenue away from those newspapers and putting things on their own websites, because as hon. Members know, very little of those savings will go to front-line services. Local authorities will probably spend the money on developing a newer and better local authority website or newer and better local authority propaganda. The local community does not want that. It wants access to transparent information. The key message is that if public funds are used, the money should be spent on advertising in local newspapers, not on simply producing propaganda.
I would be interested in the Minister’s views on the consultation that I referred to and the impact that the proposal would have.
Would it not be necessary to prove that the advertising that the taxpayer was paying for was actually being read by the taxpayer and was valued by the taxpayer?
That is a very good point. Many people will wonder how many residents read the traffic planning information on road closures in the back of a local newspaper. That is a key issue and no doubt the reason why the consultation is taking place, but I am concerned about the consultation’s adverse effects. I believe that most laws are made with the best of intentions across all parties and all Governments, but there is always the law of unintended consequences. My concern today is that the unintended consequences will simply be that more and more local newspapers end up going out of business. That will continue the removal of a vital community resource from our local communities.
I have tried to show, in the few minutes of my speech, how effective those local newspapers have been as a vehicle for change. As I mentioned, the Prime Minster supports local newspapers. We have to put our money where our mouth is on some occasions and actually invest in local newspapers.
My hon. Friend is making a superb point regarding local newspapers. In my constituency, we have the Buxton Advertiser and the Glossop Chronicle. People always read the notices in the back. There is also local radio. My local station, High Peak Radio, is widely listened to and, as my hon. Friend says, gets the message out better than many of the free sheets produced by local authorities.
I thank my hon. Friend for giving way again; he is being very generous. Not long after I was elected to the House, my local radio station, High Peak Radio, came down and broadcast from the Lobby of the House for a morning. That went down extremely well and increased the perception and knowledge of Parliament throughout the constituency. I would recommend that to any colleague.
I thank my hon. Friend for making an excellent point, which I will make to the producer of Jack FM on Saturday morning before we go on air.
The key points for me are clear. We do not want to distort the media market. The number of hon. Members who have intervened on me and are present for the debate shows the interest in it. My hon. Friend the Member for Carlisle (John Stevenson) is keen to speak, so I will finish my speech shortly. The reason why I wanted the debate was simply that we have to understand the law of unintended consequences. I am very concerned that local authorities are using taxpayer funds—
I am very lucky in my part of the world—Colne Valley. The Huddersfield Daily Examiner is a fantastic daily newspaper six days a week, running community and business awards, which are very well followed. I have to mention Barry Gibson’s coverage of the local development framework controversy on our patch. He was in the council chamber for 10 hours and was tweeting. The newspaper also led an important community campaign to get people signed up to the Anthony Nolan Trust bone marrow register after one of its journalists died of leukaemia. I agree with my hon. Friend about the importance of councils using their local newspapers for advertising. Does he agree that at a time when money is tight, that can also be very cost-effective?
My hon. Friend makes an excellent point. I have experience of The Huddersfield Daily Examiner, as my wife went to university in Huddersfield and I have read the newspaper on one or two occasions. I do not know whether my hon. Friend has contributed many articles to it in the past, but it is an excellent newspaper. We come back to the point that local newspapers are fantastic vehicles for social change, and we need to be very careful about ensuring that they have the ability to campaign. On that point, I shall finish my speech, so that other hon. Members have a chance to speak.
I am delighted to have the opportunity to speak under your chairmanship, Dr McCrea. First, I congratulate my hon. Friend the Member for Stevenage (Stephen McPartland) on initiating the debate. Its importance is shown by the number of hon. Members present. It could have been a longer debate had we had more time. It raises an issue that is extremely relevant to such localities as Stevenage, Carlisle and many other parts of the country—towns and small cities up and down the United Kingdom.
The national media are clearly vibrant and diverse. There are national newspapers, appealing to different sections of society; there is a plethora of TV channels and a large number of radio stations, both independent and through the BBC; and now we have the wonderful world of the blogosphere.
On the face of it, local media are also still quite vibrant. There are 1,200 regional and local newspapers. That is the most popular print medium; 33 million people read a local newspaper every week. Local media employ about 30,000 people and about 10,000 journalists. Local radio is also quite vibrant. Between independent radio and the BBC, it covers most parts of the country. In some cases, there is also local television.
However, there are clearly increasing financial difficulties for local media, particularly for local newspapers, which have experienced a triple whammy. They have lost revenue from adverts relating to housing, car sales and, probably most importantly, job vacancies. They also now have competition from the internet, which makes it far more difficult for them to be financially viable. Even radio is experiencing difficulties. It has less advertising revenue, and the BBC, as we know, has made severe cuts in local radio output in recent times.
I want to highlight what I see as the two most important aspects of local media. My hon. Friend the Member for Stevenage touched on the first one—the basic local news that is provided, information on events, simple local adverts, information on births, marriages and deaths—everything to do with normal everyday life. Quite often, they also cover the bigger stories, such as the success or otherwise of football clubs—I just note that Carlisle is above Stevenage at present in division 1.
Most importantly, local media hold institutions and individuals to account. I can give the best example of all. When I was a councillor, there were 52 of us, but probably the most important person in the council chamber of a night was the local journalist who reported the council’s proceedings to the wider public. Had he not been there, who would have known what was decided on that evening?
The hon. Gentleman rightly emphasises the importance of local media. In my city, the Belfast Telegraph plays a very important role in the way that he has outlined. Does he accept that one of the challenges in terms of costs is that many local newspapers are moving their printing works out of local towns and cities to somewhere else, so that they can do it more cheaply? That is happening with the Belfast Telegraph now. It is obviously a concern that these local institutions, which have been going for 100 years and more, are now moving their work forces out of the cities that they serve.
I commend those who arranged the debate, which is on a subject of cross-party concern. The hon. Gentleman is making a very important point about investigative journalism. Does he agree that under the pressures that local media—local papers in particular—face, especially the pressure of profitability or its loss, it is often the important investigative journalism that is hollowed out and lost? That is a real loss to local democracy. Happily, that is not yet the case for the Oxford Mail and the Oxford Times and the family of papers that serves my constituency and that of the Minister to an excellent standard, but it is a worry. Does he agree?
I could not agree more. The danger is that local papers just start to reproduce the press releases that everyone sends out rather than challenging what has been said. What can the Government do? Obviously, they should encourage and support a diverse local media industry, and I am sure that they will. We should restrict councils’ ability to issue free newspapers, which is often just political opportunism. We also need to ensure that statutory notices remain compulsory, and that it remains compulsory for them to be produced in the local media. Undoubtedly, that helps local newspapers financially and ensures that local people know where to go if they want to see notices about certain things, such as planning applications.
We must ensure that the BBC is also properly financed, so that we have high-quality local media. Where possible, I should like to see local TV stations reporting local news rather than national and regional news. If we can ensure that we have a vibrant local media, it will enhance our democracy.
It is a pleasure to serve under your chairmanship, Dr McCrea. I congratulate my hon. Friend the Member for Stevenage (Stephen McPartland) on securing this important debate. The subject of local media is one that is dear to all hon. Members’ hearts. My hon. Friend the Member for Carlisle (John Stevenson) mentioned the cuts to BBC local radio, as part of the BBC’s plan to deliver quality first. A debate on that subject in Westminster Hall attracted some 50 hon. Members. We also had a debate in the main Chamber. I was pleased that the BBC Trust asked the BBC to think again about the proposals for local radio. We will all have experienced the ways in which it plays an important role in our communities.
Local newspapers play a vital role in supporting local democracy. All of us know and love our local newspapers, no matter how badly they behave towards us, because we recognise their constitutional importance. I was hoping to make the point that only Conservative Members had turned up to the debate today and to send a signal to all local newspapers that they should therefore skew their editorial policies in that fashion. It grieves me, therefore, to have to acknowledge the presence of the right hon. Member for Oxford East (Mr Smith), who is displaying the customary diligence for which he is well known, thus skewering my opportunity to make that particular point.
We take local newspapers seriously. One of the first things that the Government did after the election was to deregulate cross-media ownership rules at the local level to give individual local newspapers and local newspaper groups the opportunity to own radio stations and vice versa. It was recognised by the Government that consumers use a variety of platforms, whether the local newspaper, the radio or the internet. By allowing these different platforms to unite, there is more opportunity to create a critical mass to ensure that newspapers can be well financed in the future.
There is no doubt that newspapers will have to adapt to a changing world of technology. As my hon. Friend the Member for Carlisle pointed out, it has been a triple whammy; I sometimes refer to it as a perfect storm. What has hit newspapers the hardest is the move of classified advertising to the internet. Such advertising was a source of guaranteed revenue for them. That was the most important first move that we made.
I am also pleased to say that a second move, which was made by the Department for Communities and Local Government, was to consult urgently on council news sheets. That consultation took place in 2010, and a new publicity code was issued on 31 March 2011, which makes it clear that councils have to think very carefully about how they use council tax payers’ money to fund what is known colloquially as propaganda on the rates. Those council free sheets should now be published quarterly and be accountable to local council tax payers. I am pleased to say that many local councils have now taken the view that they should publish their free sheets within their local newspapers. Therefore, as well as limiting the amount of money that they spend on those information documents, they are also ensuring that the money effectively gets channelled through the local newspaper by being part of the local newspaper. In the House, we have the opportunity to publish information about our activities. I hope that all hon. Members will think carefully about using their local newspapers to that end.
The second issue raised by my hon. Friend the Member for Stevenage was the current consultation on traffic regulation. Having already spoken on behalf of the Department for Communities and Local Government, let me now speak on behalf of the Department for Transport. Local councils spend around £20 million a year on advertising traffic regulation orders in local newspapers. I should add the caveat that local newspaper groups, such as the Newspaper Society, do not necessarily agree that that is the sum that is spent. I am sure that everyone in the House agrees with the efficient use of council tax payers’ money. Saving money by reducing advertising costs would be a good thing. My hon. Friend the Member for Suffolk Coastal (Dr Coffey), who is a member of the Culture, Media and Sport Committee, might say that the money would be better spent on libraries—I was giving evidence to her on libraries yesterday. Incidentally, I was pleased that Desmond Clarke, to whom I referred yesterday, is now sending my hon. Friend regular e-mails, updating her on library policy, but I digress.
A consultation was issued at the end of January 2012 by the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker). It has already generated 100 letters from Members. I am pleased that those letters went to the Department for Transport and not to the Department for Culture, Media and Sport. I am also pleased to say that my hon. Friend will be meeting the Newspaper Society next week to discuss the issues. Clearly, there is a balance to be struck in achieving value for money for the council tax payer, but I am pleased that the Department for Transport has recognised, through the consultation process, the importance of statutory notices to a free and thriving local newspaper press. Obviously, I cannot prejudge the outcome of that consultation, but I know that hon. Members will be pleased that many of their colleagues have made representations on behalf of their local newspapers to the Department for Transport and that the Department is actively engaged in consultation.
I have covered both the Government’s action on the deregulation of cross-media ownership and our action to reduce the impact of council newspapers on local newspapers, and I have acknowledged the importance of statutory notices to local newspapers. Let me turn to a number of other issues that will provide opportunities for local media.
My hon. Friend the Member for Carlisle referred to local television; he hoped that it would start to cover genuinely local news rather than regional and national news. The Secretary of State for Culture, Olympics, Media and Sport shares that view; he has a vision to implement local television, which he feels is a media platform that has been neglected in this country. We often cite America as a country with a plethora of local television news stations, but many of our European counterparts also have very local television stations, so there is no reason why we cannot have a thriving and effective local television sector, despite the small size of this island compared with, say, the US.
To the end of promoting local television, Ofcom has conducted extensive consultation. Spectrum has been identified that will allow local television to broadcast. The most effective sites for a local television station to get up and running in the short to medium term have been identified. A licensing process is under way, and money has been secured through a partnership with the BBC to secure the establishment of local television stations and to guarantee the purchase of BBC content.
As there is only so much advertising revenue out there, how far does the Minister see that there is a danger that the growth of local TV will put more pressure on the resources, income and profitability of local newspapers and therefore put more of them at risk?
One of the reasons why we wanted to take forward local television in partnership with the BBC is that we recognise that it could potentially take a while for some local stations to attract the element of advertising that they need. It is important to stress that although we would not refer to local television stations as a shoe-string operation, it will be a pared-down operation; local television stations will not have the kind of bells and whistles that right hon. and hon. Members may be used to when they go into a television studio in Millbank. We estimate that the cost of running a local television station will be about £600,000 a year, so we are confident that advertising can support local television in the short to medium term.
It is important to stress that many local newspaper groups are looking at partnering with local television groups to create a local multi-media network. We hope that those partnerships will emerge. However, it is also possible that some quasi-national advertising will support local television; for example, a large supermarket group could still push out a national advertising campaign with a local flavour through local television. We do not anticipate that there will be an impact on local newspapers from local television, and indeed we hope that local television will support not only local news in general but local newspapers specifically.
Community radio continues to thrive in the UK; I always credit the last Government with supporting it. Despite the tough spending round, we secured continued financial support for community radio.
I thank my hon. Friend the Member for Stevenage for securing the debate. He opened it by referring to Stevenage’s successful run in the cup and their sad defeat at White Hart Lane. When I became a Member of Parliament, my local football team—Didcot Town FC —actually won at White Hart Lane, although they were not actually playing Spurs at the time. They won the FA Vase, were promoted and then relegated. However, my hon. Friend is quite right to draw attention to the importance of local newspapers, and I hope that I have reassured him that the Government are not only listening when there is a perceived threat to local newspapers, but providing important opportunities for local newspapers to thrive and grow in a complicated 21st-century technology landscape.
Question put and agreed to.