Wednesday 17 July 2013
[Mr Philip Hollobone in the Chair]
Localism in Planning
Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Swayne.)
Good morning, Mr Hollobone. I will try to keep my remarks reasonably brief, to allow my hon. Friends the opportunity to participate in this debate, but the number who wish to do so is evidence of the growing concern in our constituencies about planning matters and the need to ensure that we strike the right balance between providing housing and ensuring that the countryside can be protected and that we keep the promises that we made to local people. I am therefore grateful for securing this debate.
I apologise to my right hon. Friend for intervening so early, but I am also serving on a Joint Committee, to which I need to return. I just want to say how much I welcome his securing this debate and the fact that so many colleagues wish to take part. I have made it clear to the Prime Minister on the Floor of the House that the national policy planning framework is not working to protect the green belt. There is greenfield development in the green belt designated for my constituency at the behest of a planning inspector, rather than local people, which is evidence that our system is not working. I am delighted that my right hon. Friend is raising these issues today.
Order. Eleven Members have indicated that they wish to speak, and I am absolutely determined to do my best to ensure that those 11 people speak. It would greatly help the chances of those who want to speak if they do not intervene beforehand; otherwise we simply will not be able to get everybody in.
I understand the concern of my hon. Friend the Member for Reigate (Mr Blunt). Protected landscapes, including the green belt, are specifically singled out in the national framework to ensure that they are not subject to these pressures. My concern is for the wider countryside, which does not have such designation, yet he points out that there is concern in those protected areas, too. That is another reason why we need to reconsider the matter.
We agree that we need more housing. Houses have never been less affordable. The gap between incomes and house prices is very wide, and there is clearly a problem. There is clearly a need for more houses, given the rising population, changing lifestyles and so on. That much is not in dispute.
The new Government agreed to approach those issues by moving away from the top-down approach of setting housing targets, so the coalition agreement was explicit:
“We will rapidly abolish Regional Spatial Strategies and return decision-making powers on housing and planning to local councils… In the longer term, we will radically reform the planning system to give neighbourhoods far more ability to determine the shape of the places in which their inhabitants live”.
The regional spatial strategies have been abolished. The top-down target has nominally gone in the south-east, but a number of problems have arisen, despite what the coalition agreement promised.
First, district councils in my constituency, and I believe elsewhere, do not believe that the targets have really disappeared. There is considerable danger that because of the way the process has been set up—with a requirement to conduct a strategic housing market assessment that may not properly take into account the downturn that we have had—and other pressures, which I will address, what those councils are really being told is that they have little choice but to reimpose the target that we said we were taking away. That damages confidence and removes the freedom that local authorities should have to deliver housing.
The whole theory of the localist approach is that, if we move to a system of incentives and encourage responsibility from councils, they will plan for additional houses in a way that does not set up conflict. Indeed, in my own area, whereas 51,000 houses were allocated to the four district councils that cover my constituency under the south-east plan, the current proposed plans of the four councils suggest that they will build nearly 40,000 houses, which is well over three quarters of the target originally set by the previous Government.
We must reject the false dichotomy that there is either a highest housing number or zero houses, with my constituents or councils rejecting the prospect of any house building. The councils are not doing that; they are actually planning for a very responsible level of housing, but it is important that they do that by consent and can carry their communities with them, which is the principle that we set out. If the emerging plans that they published are overturned by the Planning Inspectorate, or if the councils set a higher number than they want to build because they fear that some plans will be overturned by the inspectorate, that freedom has effectively been taken away. So my first key point is that we must not chase the target that we said we would abolish. If we chase that target, we will undermine confidence in the system that we said we would set up.
Secondly, although planning authorities are required to assess housing needs in their area—it is right that they should be able to do so—it is important that they also weigh up the availability of infrastructure to support those housing needs. We have a serious infrastructure deficit in West Sussex. We have an inadequacy of water and real pressure on unprotected countryside, which is important for agricultural use. We have pressure on school places and rural roads. The system will be failing if district councils are not able to adjust their figure to reflect that and say, “This is what is realistically deliverable in our area.” Again, district councils feel under huge pressure to adhere to the original high housing target with little regard to such infrastructure considerations, which should be material and allow councils to set a reasonable level of housing.
Thirdly—this is the real point that I wish to make—there is now a growing risk that we will return to the bad old days of planning by appeal, under which the plans put together by local authorities are effectively overturned by the inspectorate. More to the point, before plans are fully in place, the inspectorate might be allowed to uphold appeals from speculative developers that are charging into my constituency—I understand that they are all over the countryside—and putting in applications in the hope that, in the climate that has now been set, the inspectorate will uphold them. I believe that those developers are responding to a signal that has been sent to them.
My right hon. Friend probably knows the district of Uttlesford as well as he knows his own constituency. Does he not think it is particularly iniquitous if the Planning Inspectorate makes the kind of decisions to which he has just referred when the district plan is not in place, not because of the planning authority’s idleness or unwillingness, but because it is being held up by waiting for confirmation from the highways authority or the Highways Agency?
I strongly agree. My right hon. Friend makes his point very well.
The dangers of returning to planning by appeal are multiple. First, such a return is founded on the mistaken belief that the way to get house building moving is to send some kind of signal through the system and the Planning Inspectorate that such speculative applications are to be rewarded. That is not the way to get house building moving. We need a correct analysis of the real reason for the slow rate of housing starts, which is the economic downturn. In so far as the rate is increasing again, that is due to the upturn in the economy.
I apologise to my right hon. Friend for not being able to stay for all this debate, as I warned him. The process that he describes is exactly what is happening in Gloucestershire. There is evidence that developers are trying to submit applications under the wire before the democratically approved joint core strategy can be implemented—again, not due to any laziness in local councils. Local politicians are trying to distinguish between real housing need and demand, whereas the inspectorate appears just to be backing demand, and in areas such as his and mine, demand is virtually insatiable.
I agree with every word my hon. Friend says; he describes the problem precisely.
The first mistake is to believe that sending a signal and using the inspectorate in that way to reward speculative applications will contribute to getting construction going. It will not, because what is happening frequently is that developers are simply land banking permissions. They are not necessarily building. When they choose to build, it will be when they think that they can make a return and when there is demand for the houses that they wish to sell. What they are doing at the moment in many cases, in my constituency and elsewhere, is taking an opportunity to obtain a permission where they have absolutely no intention to build immediately.
The system is rewarding those developers by having insufficient regard to permissions that have already been granted. That is the second key concern. Given how the rules are set up in relation to the five-year land supply, the calculations that local authorities are required to undertake mean that they cannot include swathes of existing permissions that they have allocated, which places completely unrealistic targets on them.
In one district council in my constituency—Horsham—a rate of house building is now being required that has never been achieved in the area, even in the boom years. It is good news for the developers, who will not be developing for years but will secure planning permissions on greenfield sites. By setting up a formula that fails to give weight to unbuilt planning permissions, many of which are on brownfield sites, we are effectively moving not to the brownfield-first site policy that we should have but to a greenfield-first policy. That is an environmental disaster.
More affordable housing is clearly needed, and there is strong support in local areas for that housing to be provided, to maintain the character of villages and ensure that communities remain strong. No one disagrees that more housing is needed, particularly more affordable housing, but as the policy is constructed with a five-year land supply requirement that pays insufficient attention to unbuilt planning permission and is effectively a greenfield-first policy, it will not deliver the affordable housing needed; it will simply enable developers to build their balance sheets.
There is disagreement about the number of unbuilt planning permissions nationally; the Minister has had an exchange about it. It would be helpful to have some up-to-date, reliable national figures. According to the four district councils covering my constituency and beyond, the total number of unbuilt planning permissions granted is well over 16,000 and the number of houses proposed to be built is 39,000. The number of unbuilt planning permissions granted is getting on for half the number of houses wanted, yet the councils are being told that those unbuilt permissions cannot really be taken into account when they set the number. That is the problem.
The practical effect of the policy is damaging to a principle that I know that the Minister adheres to strongly, as do I—neighbourhood planning underlying the publication of local plans. That was the most potent feature of the Localism Act 2011: neighbourhoods would be given the responsibility and incentives to plan for their own futures. In my constituency, some parish councils have stuck their necks out to prepare responsible neighbourhood plans, saying what amount of housing they can take. Some are taking an amount that they would not have dreamed of, and are now feeling considerably undermined. I cannot overstate how seriously I take that.
In my constituency, the parish councillors—good people—are all volunteers who have taken a considerable amount of local effort and, in some cases, risk to promote the plans, while speculative applications are coming in that are being granted either because the district council wants to grant them or, in many cases, because it fears that they will be upheld by the inspectorate. Such speculative applications are often completely contrary to what is wanted in the parishes under the neighbourhood plan. The consequence is that faith in the neighbourhood planning process, which could be so powerful and will deliver the local and affordable housing that we need, is in danger of draining away.
I have just forwarded to my right hon. Friend the Secretary of State for Communities and Local Government, copying the Minister, a letter from three chairs of parish councils in my constituency. They specifically asked me to draw the letter to Ministers’ attention. It says:
“Neighbourhood planning should encourage partnership working between parishes and districts. In truth, it is damaging the very fabric of these important tiers of local government. We also run the risk of damaging the trust of local people who have been allowed by government, and encouraged by parish councils, to engage in the neighbourhood planning process. To have their contribution disregarded will be damaging at resident, parish and district levels.”
Those are not party political elected councillors; they are volunteers of no party who are committed to the neighbourhood planning process, and they feel that it is being chucked back at them by the actions of the planning inspector.
I will conclude by suggesting some remedies, so that I do not simply criticise what is happening and because I believe that the current situation is retrievable. It is not so radical a suggestion to abolish the Planning Inspectorate entirely. The Conservatives used to believe that we would not hand decisions to quangos—indeed, that we would get rid of quangos. I note that the Conservative party manifesto at the election, entitled “Invitation to Join the Government of Britain”—an invitation that I have now declined—says:
“To give communities greater control over planning, we will abolish the power of planning inspectors to rewrite local plans”.
There it is. We set it out in those terms. I accept that that did not find its way into the coalition agreement, but that is the promise that this party made to local people, yet we are now effectively allowing the inspectorate to do exactly that.
We could also extend the moratorium on speculative applications as plans emerge. That approach is not necessarily the right way to go, as it would mean that there would be no way to incentivise areas that are not planning responsibly to continue.
I have three suggestions that I believe the Minister could follow, even if we are to continue reneging on our manifesto promise. First, we must give proper weight to emerging plans, not just pay lip service to them or produce written answers and say publicly that weight is being given to them. In particular, where applications are not supported by parish and district councils, the inspectorate should be required to take notice of that, yet it is doing exactly the opposite at the moment. That could be done by executive decision, and a signal could be sent from the centre.
An appeal decision on a wind farm has just come through, following the new guidance and a big policy change, but one of the points made by the Planning Inspectorate was:
“National policy has not been changed by the recent Ministerial Statements”.
Surely, therefore, we must go slightly further than my right hon. Friend’s first point might suggest.
I saw the response that my hon. Friend refers to, and I am sure that it will have raised the eyebrows of my right hon. Friend the Secretary of State for Communities and Local Government, who was clear about the signal he intended to send. Further clarification is now necessary. We need an unambiguous and published signal to be sent about the weight to be given to the emerging plans.
Secondly, we need a brownfield-first policy, not a greenfield-first policy, which means clarifying the issue of deliverability set out in the national policy framework. Unused permissions should not be discounted simply because developers say, “Oh, well, we can’t build there”. That should not be the definition of deliverability, entirely to suit the developers. Of course they will say that, because that is how they can secure planning permission for their greenfield sites. We must have a more intelligent approach.
Thirdly, we need to take proper regard of infrastructure, and guidance due to be published by the Government provides the opportunity to do so. The Minister kindly suggested that I should go to see Lord Taylor of Goss Moor, who has been responsible for drawing up the guidance, after I tabled an amendment to the Growth and Infrastructure Bill and made my points about the inadequacy of infrastructure. I accept that there is no impropriety and that Lord Taylor has properly registered his interests with the authorities, but I am concerned that not only is he producing the guidance on infrastructure, but he is a director of a company that is seeking to build a new town in my constituency. In doing so, that company is trying to overturn the local plan, which has just been produced by Mid Sussex district council. If we believe in localism, and having said that local authorities were to have the ability to set their own housing numbers and be in charge, we cannot allow people simultaneously to try to overturn those plans and be involved in the publication of guidance that is meant to reinforce localism. The system is making a serious mistake if it is permitting that.
Does the right hon. Gentleman agree that his proposals would provide an opportunity for people who are able to purchase only a house of a certain cost, in other words affordable housing? Does he feel that a portion of land should be set aside within a development, so that some land is processed for development now and some land is banked? We have that in Northern Ireland, and I want to see what he thinks.
That is an interesting suggestion. So far as further policy development is concerned, we should look at what measures can be taken to prevent land banking and at more radical reform of the planning system, which is undoubtedly constraining supply in a way that drives up prices. In the meantime, we need to make the system of localism that we promised work.
In my constituency, one chief executive of a district council, whom I will not name, told a group of parish councillors who were discussing with him their proposed neighbourhood plan, “Localism is dead.” That is the message that people on the ground are beginning to receive. When we explicitly promised localism not only in the Conservative manifesto but in the coalition agreement, when we have just passed a Localism Act, when we have told people that they will be in charge in their local communities and when we have put on them the responsibility for planning sensibly, we must uphold their ability to do so. Allowing a quango, through the back door, to reimpose the top-down housing targets that we said we would abolish is damaging to the process of localism, to public trust and, if we persist, to the Government themselves.
I am a passionate believer in localism. I want to be able to go out and defend the policy. It could be made to work, but that first requires acceptance that it is going wrong.
Before I call the next speaker, John Mann, I thank Nick Herbert for his contribution. Owing to the level of interest in the debate, the Chairman of Ways and Means has given me permission to impose a three-minute time limit. I know that that is short, but it will mean that everyone gets in if there are no interventions. The running order that I propose is as follows: John Mann, Nicholas Soames, Annette Brooke, Caroline Nokes, Stuart Andrew, Bob Neill, Penny Mordaunt, Andrew Bingham, Zac Goldsmith, Chris White, Geoffrey Clifton-Brown and John Howell. All should be able to get in. The Opposition Front-Bench spokesman has kindly agreed to limit her remarks to 10 minutes, which will give the Minister slightly longer—perhaps with interventions at that stage—to respond to any residual concerns. I hope that that is acceptable to everyone.
Thank you, Mr Hollobone. I have cut my speech accordingly. It is safe to say, and let it ring from every single rooftop tonight, “Localism is dead!”, and the Conservative party admits it. We have heard an excellent speech, demonstrating the absolute betrayal of the Conservative party manifesto and of local communities, and a shift to the centre by the Government, the Minister and, in particular, his predecessor, who is now the chairman of the Conservative party. That is in spite of the warnings of people such as myself about the national planning guidelines.
I have a few questions for the Minister—he will need his pen—which I am sure he will want to answer. Will he endorse my early-day motion 428, tabled today, on UK Coal? UK Coal is the largest landowner of brownfield sites throughout the country. I would be happy to have 10,000 houses on the site of Harworth colliery—destroyed by the regional spatial strategy and the inability to have flexibility. Will he endorse that approach?
Is it possible, where the regional spatial strategy has imposed housing targets on a local district council’s core strategy, for a local council now to reduce those targets? Is it possible for a local district council with targets set—even if it kept them—to redistribute those targets between different communities, in order to shift more to the brownfield sites and away from the greenfield and green belt sites?
A wind farm application was defeated unanimously in recent months in the local council, because it was opposed by all local residents—I declare a vested interest, I am one of those residents—but it was resubmitted this week. What will happen when the council turns it down again? Will the developer win on appeal, after a second unanimous decision by a local authority backing its local population?
The community infrastructure levy is a tax on development—will the Minister remove this tax on self-build housing and on tiny developments to allow economic regeneration at the micro-level by small builders, family builders and young couples? The affordable housing levy means a tax in Hertfordshire of £186,000 per property for new properties. Will the Minister remove this new taxation for single developments and, I suggest, small developments of perhaps three to five? The tax was brought in by the national planning guidance and did not exist before—
I am pleased to support my parliamentary neighbour and close working friend, my right hon. Friend the Member for Arundel and South Downs (Nick Herbert), on his passionately argued speech this morning. In view of the time constraints, I say for the record that he did not make a single point that I am not profoundly in agreement with and wholly support. I was in the Chamber when you had your debate on such matters, Mr Hollobone, and many of the same issues have been raised today.
My hon. Friend the Minister has been extremely helpful and encouraging to Mid Sussex district council, taking the trouble to come down to see and talk to it. Will he acknowledge in detail the real quandary that district councils now find themselves in? In good faith, taking part in and using the values and ethos of the localism system, they find themselves constantly being hung out to dry. Frankly, it will shortly amount to a credibility question throughout the country.
Will the Minister accept that West Sussex county council’s proposed announcement today or tomorrow of its support for a second runway at Gatwick will put further pressure on mid-Sussex district with an almost unsupportable torrent of applications? Will he see what he can do to give guidance to the Planning Inspectorate so that full weight is placed on the views of local authorities who have a clearly emerging plan when applications are brought to its attention?
I want to raise one more point with my hon. Friend. The process is susceptible to well-funded lobbyists and developers promoting pet projects that local people believe are out of all proportion to what they want in their community. An example of that in mid-Sussex is the wholly unsuitable Mayfield new town scheme on a greenfield site, despite the proposal having been reviewed and rejected when preparing the district plan and despite overwhelming public criticism.
Will the Minister take very seriously the points made by my right hon. Friend—in his usual way, the hon. Member for Bassetlaw (John Mann) also made a powerful point—about the credibility of the scheme to which we gave our name? We campaigned vigorously and local people signed up to it. They supported our party on the basis that it would be a scheme that we would undertake. I am afraid that we are falling woefully short of that target and ambition. I urge the Minister to support the views of my right hon. Friend.
I congratulate my right hon. Friend the Member for Arundel and South Downs (Nick Herbert). I agree with much of what he said. We are looking at aims that should be complementary, but are contradictory at the moment: protecting the countryside and green spaces, and providing much-needed housing through local decision making. Given the time constraints, I will give a brief report.
The good points that have scored highly for the coalition Government include scrapping the regional top-down spatial strategies, listening on the national planning policy framework, introducing brownfield-first, having three pillars of sustainability, and in theory not letting economic growth trump protection for the green belt, landscapes and urban green spaces. I am also keen on neighbourhood plans, which score high marks. However, the downside is that the numbers from the regional spatial strategies are retained. Core strategies are out of kilter timewise with neighbourhood plans. Local people should be able to say, “We don’t want the houses there. We know we need them. We want them here.” But there is not time. Inspectors are overturning.
It is important to know when we will get planning guidance and whether there will be consultation. Five-year plans must put brownfield sites first and include undeveloped sites with planning permission, and windfall developments. We want to address the need, not demand. Areas for improvement include more social housing. More publicly owned land should be released and we should work proactively to bring more brownfield land forward and to stop interference with local democracy. Result: can do better.
I congratulate my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) on a fantastic opening speech. I cannot disagree with a single word of it. I served for 12 years on Test Valley borough council and I commend anyone to serve an apprenticeship on a local planning authority, which can show how vexed the world of planning and politics can be.
I want to make some basic points as briefly as I can. The first is about a brownfield-first policy. In Romsey, we have waited since 1983 for the brewery site, the only major brownfield site in the town, to be developed. At last, there is some real progress, but it has taken 30 years. There must be a far more robust mechanism than the local authority considering compulsory purchase time and again to try to bring it forward, at which point the developer simply suggests more enthusiastically that he was going to build something. It has taken 30 years to get the site developed while greenfield sites on the edge of the town and in surrounding parts of the borough come under immense pressure.
The five-year land supply is incredibly important. In Test Valley borough, developers have competed against one another at appeal to prove that for some reason or other their site will be developable but their competitor’s site will not. At the moment, we have the spectacle of a developer competing against himself to prove that site No. 1, for which planning permission was granted on appeal, needless to say, is not developable so he is bringing forward another one. There is no guarantee that either site will be built on until prices are right and the developer believes he will maximise his profit, so there is an ever-growing land bank. My right hon. Friend may have mentioned that planning permission has been granted for 1 million houses throughout the country, but they are not being built. We must find ways to encourage developers to build on sites with existing planning permission.
The problem is not restricted to rural areas. In Bassett in Southampton, there is no town or parish council, but just a city council and residents’ associations, which work hard to introduce neighbourhood planning. My constituent, Jean Wawman, recently wrote to me saying that developers constantly have the upper hand, and that article 4 directions to control houses in multiple occupation are clunky, cumbersome, time-consuming, and prevent local people from having real control over the character of their neighbourhoods.
Finally—I have only 30 seconds—there is no green belt in Hampshire, save for a small corner in the south-west, which is preventing the spread of the Bournemouth conurbation, which is not even in the same county. In my constituency, greenfield sites without the additional protection of being green belt invariably come under pressure for development, particularly for Traveller sites. That is a huge concern in villages such as Timsbury.
I urge the Minister to think again. There is no such thing in the Test valley as ordinary countryside. It is all extraordinary and deserves protection.
Over the past 10 or 20 years, every part of my constituency has been affected by overdevelopment. The old mills and industrial sites have been replaced with massive new housing, which has put huge pressure and strain on the local infrastructure. Our roads are congested and our schools are bursting. We now have a massive issue in the Guiseley area, where the council is desperately trying to find places for schoolchildren for the coming year.
Local anger and frustration with the local planning system cannot be overstated. Too many people believe that planning is something that happens to them, and when localism came in there was a feeling of hope that they would be able to have some input. Local communities’ ability to develop neighbourhood plans is welcome, and I am fortunate that in my constituency rafts of people have come together to try to face the challenges head on and to take advantage of the opportunities to shape the future of their towns and villages. In Aireborough, Jennifer Kirby is leading a group that has provided workshops and involved children in the future that they want for their town. Parish councils in Horsforth and Rawdon are engaging actively with residents and their views.
The feedback I am receiving is united. People complain that despite their work, the local authority’s five-year land supply supersedes everything they are doing. It has sent applications for thousands of new houses to the inspector for approval. If that plan did not have to be approved by the inspector, I wonder what the real figure would be. I suggest that it would probably be far more realistic.
The people I speak to are anxious about the green belt in our area. An urban constituency such as mine values its green belt, which helps us to identify our separate towns and villages. We are in danger of creating urban sprawl. We have heard from other hon. Members that developers are going to the inspector, and that is happening in my constituency. Developers have taken applications for some of our precious green areas to the inspector, and I hope that they will be turned down so that local people have time to determine where houses should be.
One parish councillor said to me that he is worried that nothing decided at parish level can change the decision made by those at unitary level, who themselves are hidebound by central Government housing targets. We need to address the problem urgently, because local people are rightly getting angry. Let us give local people the real power that we promised. Let us stop the developers thinking that they can do what they like, and let us seriously look at abolishing the inspectorate, so that we can even the playing field and tip planning towards having far more localism.
May I congratulate my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) on securing the debate? In relation to our history, he and I accepted an invitation at the same time, and my little role in the invitation was to be a part-author in the national planning policy framework. I pay tribute to the preliminary work that my hon. Friend the Member for Henley (John Howell) did on that.
I understand the strength of feeling on the issue. After my 24 years or so in local government before I came into this place, I am very conscious that ever since 1947, planning has been about striking a balance. We are absolutely right to cherish and protect valued landscape. Equally, for a party and Government who believe in aspiration, one of the most significant aspirations is to enable young people and future generations in this country to have homes that they can afford. I agree with my right hon. Friend the Member for Arundel and South Downs that those things can be reconciled, and we need to see how best we can do that.
It is worth pointing out that from the dirigiste and centralised situation that we inherited, much progress has been made. I agree with my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) about the significant advances that I am proud we were able to make with the national planning policy framework. We also need to bear it in mind that other issues are already taken on board, including the question of materiality and the views of district councils. They are significant, and I totally agree with my hon. Friend. It is worth saying, of course, that it has been long-established planning law that decisions are taken according to all material considerations, and emerging plans can and should be a material consideration. What we may need to do—I know that my hon. Friend the Minister is working on this—is ensure greater consistency in the application of the policy by the Planning Inspectorate. I pay tribute to his work on strengthening the quality control in that regard. It is an important point that we need to deal with.
I wish to make another short point relating to the protection of green land and to brownfield-first. I note that the core planning principles in the NPPF refer specifically to using
“land of lesser environmental value”
and encouraging the use of brownfield land. On the question of housing supply and the figures relating to the five-year deliverable supplies, it is worth pointing out that footnote 11 to paragraph 47 of the NPPF specifically states:
“Sites with planning permission should be considered deliverable until permission expires, unless there is clear evidence that schemes will not be implemented within five years”.
Perhaps my error was not to have that put in bold rather than in a footnote—I will own up to that—but we need to ensure that it is fully taken on board by decision makers. However, the provision is there for that to be achieved. We need consistency of approach, and finally, we must deal with the issue of delay by statutory consultees, which was raised by my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst). He is not unique in considering that, and I know that the Minister is already working on that case.
I congratulate my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) on securing this timely debate. I want briefly to give an example, make a request of the Minister, and put forward a suggestion.
The example I want to give is of a dementia care home, which was a high-rise building due to be built in my constituency on an undeveloped beach and unsurprisingly, also on a floodplain. It was an awful design, and in fact, the developer had to put in a subsequent application, because it had not realised that dementia patients might need nursing care and there was no provision for any nurses. The application reassured us that we could be relaxed about the flooding issue because—I am not making this up—it was a high-rise building, and therefore, in case of flooding, residents would be able to reach higher ground. The application was dismissed locally but overturned by the inspectorate. I give that example not only because it shows how the local voice has not been listened to, but to illustrate that this is about both the quality of services in our communities and the quality of the built environment.
The request I make of the Minister is that in his summing up, he emphasise how we can strengthen the local voice and give communities ownership of the quality of life that they want for their communities. In particular, that should happen through local plans, especially in communities such as mine, which do not have a great deal of capacity to develop such plans.
Finally, I suggest that where we have third parties, such as the Environment Agency, which is forming a view on such schemes and dismissing them as reckless and bonkers, we give some publicity to those decisions— there is definitely a gap in the market for “www.EAsaysno.com”. We should consider other ways in which we can provide the potential buyers of homes or care home places with information about what they are taking on; for example, whether they are built on floodplains. The more we can influence developers to be much more responsible and raise the quality of what they are proposing for our communities, the better. Transparency with regard to the Environment Agency and other organisations would go a long way towards doing that.
Like my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), I spent 12 years on the local council. For some of that time I sat on the planning committee, so I have some knowledge of the way in which the planning system has worked, and I, too, am concerned about recent events. In the three minutes available to me, I shall try to crash through a few of the points that I wish to make.
In the High Peak in recent weeks, we have seen significant applications for development on greenfield sites. They have been refused by the local development control committee on High Peak borough council. Those decisions have been met with great approval and, in some cases, relief by local residents. However, they have then been overturned by the Planning Inspectorate. I want to be clear: neither I nor my residents in the High Peak are nimbys. We are aware that there is some need for housing, and nobody would dispute that, but seeing such decisions being made by local councils and then overturned by the Planning Inspectorate is not what the process should be about. It completely devalues the faith that people have in the planning system.
I want to highlight a particular area called Harpur Hill on the outskirts of Buxton. Harpur Hill has approximately 900 to 1,000 houses, and applications are swirling around to more or less double the size of that small area. The residents association, which is headed up by a couple of my constituents, Ken Greenway and Pam Reddy, is really concerned. It sees the applications being refused, and then granted by the Planning Inspectorate, and it is wondering how some sense of proportion can be introduced. It is not saying “No houses”, it just wants a proportionate number of houses in the area, because the infrastructure cannot cope with those huge numbers.
What can we do about the issue? My right hon. Friend the Member for Arundel and South Downs (Nick Herbert) made some excellent suggestions, and I would agree with all of them, but we have a gap, which is not being helped with in the High Peak. I grant that the local council has delayed the introduction of its local plan—wrongly, in my view—and a window of opportunity has been created. Developers are jumping through that window with great enthusiasm. They are putting in speculative applications for greenfield sites that are being granted by the inspectorate. That is creating what many people see as a free-for-all in the High Peak. The residents association in Harpur Hill has seen that going on, and it is concerned that the problem will come knocking on its door.
I am asking for a sense of proportion, which is what a local plan should bring, using local people and local councillors. However, it is not there in the High Peak, and developers are making the best of that. Giving parish councils more say is an excellent idea. In Chapel-en-le-Frith, the parish council has now said that it will object to all applications because it is the only voice it has, even though it is not being listened to. I would like the Minister to give me some assurance that I can go back to my residents and say, “Yes, we are listening, we do understand this.” The way it is at the moment, it is just not working. The High Peak is a fantastically beautiful area and I can understand that people want to live there, but at the moment it seems to be open season on development on greenfield sites, which I do not think is right.
I congratulate my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) on securing the debate. I agree with everything that he said in his excellent speech, and I want to take the opportunity to thank my hon. Friend the Minister for listening to concerns raised by many colleagues about proposals to reform the laws on permitted development. It would have been absolutely wrong for the Government to remove people’s right to object to plans that would have an impact on their homes, and I am very pleased that he managed to find an alternative that would both encourage non-contentious extensions and preserve the all-important right to object. I wanted to put that on the record.
I join the debate today because I fear that we are losing sight of the huge emphasis that many of us in Parliament placed on localism before the election. Local authorities have been stripped of authority over such a long time and to such an extent that more often than not, even on absolutely local issues, they are simply overruled by the centre. I recognise that there has been some rowing back on that since the election. As has been said, there is great potential in neighbourhood plans, for instance. However, we cannot say with any real conviction that our planning system is genuinely local, despite the noises that we all made to our constituents before the election.
I know that the Minister will make the point that there is a real and urgent need for new homes, and that is obviously right—I do not think that anyone will argue with that—but before we give up for ever our precious green spaces, I would simply encourage him to acknowledge that the reason why we are not seeing new homes is not the planning system. Vast tracts of land are available for development but lying idle. There are 250,000 plots in the south-east alone. That is in addition to 31,000 acres of brownfield land. All could be developed now. It is worth pointing out also that roughly 90% of applications are successful; they go through. The problem is not a lack of permissions. It is more likely to be, as we have heard, a lack of access to finance. Therefore, even if we were simply to rip up the planning system, we probably would not see a net increase in development. We would simply see more development in the wrong places—in the most unneighbourly places.
As a rule, it must make sense to have a strong brownfield-first approach, and that should be crystal clear in planning law. We might even want to look at the US, where there is a tax bias in favour of developing brownfield sites and against developing greenfield sites. That is the case in a country that is far less compressed than our own.
It is also worth looking at empty homes. We do not know how many empty homes there are in this country—the figures are so unreliable—but some people put the figure at about 1 million. Clearly, that is an area where we should be making more inroads.
I want to finish by commenting on the national Planning Inspectorate and echoing the words of my right hon. Friend the Member for Arundel and South Downs. If I were asked to design a body with the specific goal of alienating and enraging communities, I do not think I could do better. It is a remote, virtually invisible, unelected body that simply tramples over local wishes and opinion. Even where local people are absolutely united and backed up by their councillors, they are still routinely overruled. I am about to run out of time. I will simply say that if there is to be any point at all in being a local authority councillor, we have to do away with that organisation.
I am grateful to you, Mr Hollobone, not least because I intended only to intervene and you very kindly put me down to speak.
I agree very much with what my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) said, not least about abolition of the Planning Inspectorate, which seems to be one of the biggest excuses that I have come across in my term as a Member. Currently, Warwick district council is consulting on a proposed local plan, which has met with widespread disapproval from local residents, and for valid reasons—whether pollution, gridlock or infrastructure—that need to be taken into account. I appreciate that planning is difficult, but we need to engage more with our local residents on planning and collaborate with them and local parishes and town councils to ensure that they feel ownership of a plan in the end.
My hon. Friend the Member for Richmond Park (Zac Goldsmith) has just mentioned the real and urgent need for new homes, but very few people in my constituency consider that there is a real and urgent need for so many homes. If we are not careful, words such as “localism” will be viewed with very little confidence indeed. We need to change things significantly and soon; otherwise the system will not have the confidence certainly of my constituents.
I am very grateful to you, Mr Hollobone, for allowing me to speak, especially as I, too, had only hoped to intervene. I congratulate my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) on securing the debate. I agree wholeheartedly with his comments that the emerging local plans should be given more weight by the inspectorate.
I have a particularly difficult constituency in terms of planning: 80% of it is an area of outstanding natural beauty; I have 10 historic market towns that are absolute gems—if there were a listed town status, all 10 would qualify—and I have the highest number of listed houses as a proportion of the housing stock of anywhere outside London. I therefore want to make three specific points to my hon. Friend the Minister.
First, I did praise the national planning policy framework when it came out, but I had one specific reservation, which has come back to bite our communities. As the Minister knows, one case in my constituency is now to be reviewed in the courts. It concerns the 20% historical under-provision. This is grossly unfair. It is quite reasonable to have a five-year land bank, but my council has a very good record of bringing forward developments. It has a very good new homes bonus rate. To impose an additional 20%, on top of the five-year land supply, is completely unreasonable and unsustainable. If we are not careful, we will lose those 10 historic market towns—we will lose those little gems that we have in this country.
Secondly, we must have a mechanism by which infrastructure is provided before large-scale developments are built. There is a lot of sewage flooding in my constituency. Thames Water’s performance in my constituency is woeful. We had a case in which sewage flooded an existing community, and because the system could not put sufficient weight on Thames Water’s representations, another 150 houses were given permission right next to where there was already sewage flooding.
My third point relates to solar farms. We have been assailed in the Cotswolds by applications for solar farms recently. I do not object to that necessarily, although there is no guidance to say what the impact should be on an area of outstanding natural beauty. Suffice it to say that there is no mechanism in the planning system for the community to benefit from these solar farms. They would be classed as large developments if they were housing developments. They are between 20 and 50 acres and involve many millions of pounds for the developer. If it were a residential development, the local community would get considerable benefit through the infrastructure levy, yet there is no such mechanism in relation to solar farms.
I therefore say this to the Minister. Let localism work. Let the local councils decide where to put these houses. In the Cotswolds, the number of permissions granted is now three times the historical 10-year rate. That is unacceptable and will lead to the loss of those historic communities in the Cotswolds.
Thank you, Mr Hollobone. It is a great pleasure to speak in this debate and to follow, if somewhat distantly, my right hon. Friend the Member for Arundel and South Downs (Nick Herbert). There was much in his speech with which I agree.
I have in my constituency the town of Thame, which has recently completed a neighbourhood plan. During completion of that neighbourhood plan, which took a year and a bit to come to fruition, the council’s district plan was the subject of an examination in public under the old rules, under which the inspector could have interfered in where the housing went in Thame, but he did not. He said that he would interfere in where the housing went in Wallingford, which had no neighbourhood plan, but because Thame had an embryonic neighbourhood plan—an emerging plan—he would not determine where the housing would go; he would leave that to the people of Thame to determine during the production of their plan.
I think that that is a clear model for how the inspectorate should take into account emerging plans. It has set a very good precedent and one that I urge the Minister to get the inspectorate to follow. I remember from my days as a mere Parliamentary Private Secretary in the Department that we frequently had to call in the Planning Inspectorate to stress the point of consistency in how it approached taking plans into account.
There is no excuse for a district council not having a local plan. It is a great shame that we could not have abolished the regional spatial strategies on day one of coming into office. We could not do that for a number of legal reasons: the challenges that it would have involved. It has taken quite a long time to get, on a rolling basis, the abolition of those regional plans. Nevertheless, councils that have looked at this have taken into account where the thing is going and have gone back, where they have had time, to look at the housing numbers. In many cases, they have found that the housing numbers now exceed those that were originally in the regional spatial strategy, but that is for them to decide.
The one thing that we have skirted around in this debate is not the housing targets, but the need for a robust five-year land supply. If we are going to say, “We have this number of houses to provide,” we need to show the mechanism by which we are going to provide it. By insisting on a robust five-year land supply, we should be able to do that. Neighbourhood plans have to be in general conformity with the district council’s plan, and that includes the five-year land supply, so there should be no difference at all between the two. There should be a great overlap between the two forms—
Thank you all. Everyone has been exceptionally well behaved, and as a result, we can relax the no-interventions rule. The Opposition Front-Bench spokesman has agreed to keep her remarks to 10 minutes, so there will be plenty of time for the Minister to make his remarks and for hon. Members to come back, if they wish.
It is a pleasure to serve under your chairmanship again, Mr Hollobone.
I pay tribute to the right hon. Member for Arundel and South Downs (Nick Herbert). He serves a beautiful constituency and he spoke passionately and in an informed way on behalf of his constituents. I agree with much of what he said, and I do not know whether that is a greater worry for him or for me—we shall see. I almost feel guilty for intruding on the Minister’s misery, because his own side appears to be doing a very effective job in opposing his policies. Nevertheless, I want to share with him my concerns about the move away from localism and echo some of the points made eloquently by hon. Members on both sides of the House. Everyone spoke strongly and powerfully on behalf of their communities.
As we heard from hon. Members, localism was a key Conservative pledge during the 2010 election, and that was apparent in the early months of the coalition Government. When the Secretary of State for Communities and Local Government introduced the Localism Bill in 2010, he claimed to be
“getting out of the way and letting councils and communities run their own affairs”
in order to
“restore civic pride, democratic accountability and economic growth—and build a stronger, fairer Britain.”
Nowhere was the commitment to localism more fervent than in planning policy. The Conservative pre-election green paper, “Open Source Planning”, exemplified the localist approach, but three years, on a gigantic U-turn has taken place. The NPPF and the Growth and Infrastructure Act 2013, along with reams of secondary legislation and vicious local authority cuts, have completely torn apart the Government’s promise to instil localism in the planning system. Almost a year and a half on from the introduction of the NPPF, the full consequences of the Government’s approach are starting to become clear.
In March, a Local Government Information Unit research paper concluded that, far from putting people at the centre of planning, the NPPF is at
“risk of undermining localism in planning”.
The latest planning application statistics, released by the Department for Communities and Local Government, show barely any change in the number of approvals or the speed of decision making since the implementation of the NPPF.
I am grateful to the hon. Gentleman for that intervention. We did not oppose the NPPF and I certainly did not argue for the retention of the regional spatial strategies. I must put that on the record.
In many places, planning criteria have worsened.
If there had not been a change in Government, a new town, which was not supported by any democratically elected person in any council, would be on its way by now in a beautiful village in Dorset. We have moved on from those top-down regional spatial strategies.
I am grateful to the hon. Lady for that intervention, because, as she will hear in a moment, the Opposition are demonstrating a strong commitment to localism, which I am sure that she would want to applaud. Popular planning policies, such as brownfield-first, have been undermined by the NPPF—a point we heard hon. Members make today. Six months on from the introduction of the NPPF, any remaining claim the Secretary of State had to being a localist Secretary of State was exposed by the Growth and Infrastructure Act 2013, in which he mentions himself no fewer than 158 times. The 2013 Act, which the Campaign to Protect Rural England states
“marks a dramatic shift away from the Government’s commitment to localism”,
includes powers that allow the Secretary of State, from October, to designate a local planning authority as failing and to strip it of its planning powers, bypassing the local community in deciding planning applications. The Conservative-led Local Government Association said that that
“represents a blow to local democracy, by taking authority away from democratically accountable and locally elected councillors and placing it instead with the Planning Inspectorate”—
a body that has been the object of ridicule for hon. Members today. The LGA goes on to say that the legislation could prove
“counterproductive in terms of stimulating growth, since the removal of local decision making risks seriously denting trust at the local level. This could mean some communities are likely to be increasingly reluctant to accept new development in their areas.”
The Planning Minister, however, was not done. In case anyone, anywhere, still thought that the Government’s localist promise held any meaning, he turned his attention to stripping local people of their right to have a say on the high streets at the heart of their communities.
The Government’s most recent move—brought in by the back door without any parliamentary debate whatsoever—temporarily allows shops to be converted into payday lenders, bookmakers or fast food shops, without any say for the local community. That is the exact opposite of what the vast majority of the public want. Polling shows that 76% of people would support the Government giving new powers to local councils to help them shape the high street in line with the wishes of the community. Can the Minister explain how his policy, which is the opposite of that, does not remove powers from local people?
I am interested in and intrigued by the hon. Lady’s new-found localism. When her party was in power—for 13 years—it had planning at the remotest regional level. Having found localism, if she, unfortunately, came into Government, what would her party do specifically to ensure that local authorities had greater powers than they have now?
I will come on to specific things that a Labour Government would do in a moment. We are arguing very strongly that local people now have little say in what happens to their high streets. Is the Minister still arguing that local authorities should use article 4 directions to get round his new policy?
I shall now answer the question of the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) about what a Labour Government would do specifically to give powers to local communities.In May this year, my right hon. Friend the Member for Doncaster North (Edward Miliband) pledged that a future Labour Government would ensure that local people and councils have greater powers to stop the proliferation of certain types of unwanted shops or premises on their high streets, thereby showing that Labour is the party of true localism. That is the opposite of what we are now seeing under this Government, who are taking powers away from local communities, and the same is happening with neighbourhood planning. We want to build on neighbourhood planning, integrating it more clearly into the planning system and building on the success of places such as Thame in Oxfordshire, where 775 new homes have been planned for. We would like to see such success mirrored elsewhere. If we are to deliver the number of houses that we so desperately need, it is important that we work strongly with communities to gain their consent.
Our approach is a strongly localist one. We want to work with local communities to deliver growth and development, and the Minister could do worse than listen to his colleagues this morning.
It is a pleasure to serve under your chairmanship once again, Mr Hollobone.
I congratulate my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) on securing this important debate. He, as everyone here would attest, is one of the most effective campaigners in modern politics. There is probably no one to whom we owe more gratitude for the fact that we still have sterling rather than the euro, and no one who has more responsibility for the introduction of directly elected and locally accountable police commissioners. Furthermore, the passage of the Marriage (Same Sex Couples) Bill through Parliament just last night owes as much to him as to any other Member.
You can probably understand, Mr Hollobone, why it makes me a little nervous, therefore, that my right hon. Friend is now turning his sights on me and my portfolio, which is planning. If I were asked to rate my chances against him, I am not sure whether I would fancy my odds, but I will try to persuade him that he need not turn his sights on me or on our planning reforms, because although the reforms are clearly a work in progress and it is only a short time since the Localism Act 2011 was enacted and the national planning policy framework was brought into force, early signs are positive and it is worth being a little patient before rushing to conclusions.
I want to engage with all the points raised as best I can in the time available, but I will start with what I think is the big argument: what does localism mean? I want briefly to take everyone away from the question of meeting housing need, which seems to be the particularly vexed issue that taxes us today, to the other needs that we all recognise human beings and families have, and which in many cases local authorities have a responsibility to provide. There is the need for schooling. There is the need for environmental management for waste collection. There is the need for care for vulnerable children and adults. We all accept, respect and welcome the fact that local authorities have responsibility for deciding how to meet those needs, and in none of those cases do we think they should have the ability not to meet them. Localism means control over how the fundamental needs of the people who elect the authorities and reside in their communities are met; it is not about deciding whether the needs will be met.
We all must be clear about our corporate, collective failure, as a society, over not five or 15 years, or over the lifetime of the previous Government, but over several decades. We have failed to meet the legitimate housing needs of our population.
I certainly think that in every local community we want, first and foremost, to provide housing for local people. However, in response to my hon. Friend’s question and to the points he raised in his previous interventions, it is not the case that our housing need chiefly derives from the levels of immigration over the past decade, of which I am as critical as he. Immigration explains only about 40% of the formation of new households; the remainder is explained by the fact that we are all getting older and not dying as quickly as we used to. I come from a family that has four generations in it, as do many right hon. and hon. Members, but that was not common 30 years ago. Now, people in their 80s and 90s are much more common to all of us than they were when we were growing up, and they all need houses.
We have failed as a society and as a country to meet the need, and the Localism Act and the national planning policy framework make it clear that every local authority has a duty, first and foremost, to meet objectively assessed housing need. We do not allow local authorities to determine whether they will provide primary and secondary school places, or social care for vulnerable adults and children. We expect them, as branches of Government, to meet the responsibilities passed to them, and meeting housing need is among those responsibilities.
Does the Minister accept that in some areas it is difficult to meet endless need and demand? Certainly in a constrained urban borough such as Cheltenham, almost all the unprotected green space has already been built on or is right now under attack from developers. The problem is that in the end we will lose other things for which people have a need. Green space is good for local food production, physical and mental health, and for people’s access to recreation, including free access to recreation for poor communities, which reduces health inequalities. Those are needs as well, and we cannot be totally single-minded and blinkered.
I certainly hope I am not being single-minded and blinkered; perhaps the hon. Gentleman thinks I am. I of course accept that almost every urban area finds it very difficult to meet its needs within its boundaries, and that is entirely accepted within all our policies. The regional strategies of the previous Government effectively completely removed any flexibility from local authorities, and that is why in the national planning policy framework we have the duty to co-operate.
I am happy to say that I have met with an authority that is a neighbour to the hon. Gentleman’s constituency, and that authority is engaged in co-operation with his local authority to see how it can meet needs, not least those of the hon. Gentleman’s town. As he says, his town cannot meet the needs within its own borders without threatening its precious green spaces. Such spaces are, if anything, even more valuable in relatively built-up towns than in the countryside, and there needs to be co-operation within broader areas to meet the needs of all our citizens.
I agree entirely with my hon. Friend’s analysis. He makes a powerful and sophisticated case. Does he agree that the duty to co-operate is significant not only because it is the first time we have sought to have such a duty on a voluntary and localist basis—by agreement rather than imposition—but because of its link to incentives such as the new homes bonus and the reforms to local government finance with business rate retention, so that we can persuade communities that growth in the right place—I stress “right place”—is not a threat but potentially an opportunity that we can realise if we collaborate, sometimes across local authority boundaries?
My hon. Friend is exactly right, and puts the argument much better than I could. The Localism Act and the national planning policy framework attempt to achieve just that, replacing the previous approach of entirely denying local flexibility in how and where housing need was met.
It is right, briefly, Mr Hollobone, to give appropriately short shrift to the rank hypocrisy displayed by the hon. Member for City of Durham (Roberta Blackman-Woods). She was a Member and a supporter of a Government who introduced regional strategies that tried to impose eco-towns on constituencies such as that of my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), and who introduced the Infrastructure Planning Commission, which had no democratic accountability at all. For her suddenly to pretend that she is now a localist rings pretty hollow.
I will move on to trying to persuade my right hon. and hon. Friends—I seek not to persuade the hon. Lady—that localism is not dead but in gestation. At the heart of the Localism Act is the idea that control is gained from having a plan. A plan that fulfils the criteria of the national planning policy framework puts those with the plan in charge, and their decisions will not be overturned. Decisions might be challenged, but no challenge will be supported by the Planning Inspectorate. It all rests on having a plan, and the difficulty faced by many hon. Members and their communities is where no plan is in place. That is why so much of the discussion has focused on the question of what weight can be attached to emerging plans.
I want to share with my right hon. and hon. Friends the difficulty of the position that some of them want the Government to take, which is the suggestion that an emerging plan should immediately be given substantial weight in any decision on a planning application. That could simply create the problem that every community in the country that wanted to oppose a development might start the process of working up a neighbourhood or local plan and then take their own sweet time about it. That would immediately create an opportunity for communities to block all development by simply saying that they were engaged in a plan-making process.
That is why there must be a sense that a plan has reached a relatively advanced stage before it can be given substantial weight. Such a position has not been established by policy or Government, but over many years in the courts, as has been pointed out. I know that many people here think that an easy solution would be simply to abolish the inspectorate, but I say to them that all such decisions would then be taken by judges in courts. Developers will not stop challenging local decisions that they think do not accord with local or national policies. They will simply challenge them in the courts, at much greater cost to the taxpayer and, I suspect, to the not much greater contentment of residents.
The critical thing is to engage in plan making. The reason why I urge my right hon. and hon. Friends not to give up on the process is the good news that plan making is happening at a speed and intensity that has never happened before: three quarters of all local authorities in the country have now published a plan, and half of them have submitted a local plan to the Secretary of State. Some 800 communities in this country are now engaged in some stage of neighbourhood planning, and several hundred of them have already had their plan areas registered. The first three neighbourhood plans submitted to an examiner and passed as sound have passed their referendums, which is the first time that a Government have said to local people, “You get a vote on whether and how you develop in your local area.”
The referendums passed not just by resounding margins, but on a greater turnout than for the county council elections taking place on the same day. In Thame in the constituency of my hon. Friend the Member for Henley (John Howell), people turned out to the polls to vote on the neighbourhood plan and did not vote for a county councillor. Why? Because the plan matters to people. As has been pointed out, the plan contained proposals to build 775 new houses in one of the most beautiful market towns in one of the most high-pressured areas in the country.
My hon. Friend is making a powerful case, and nobody doubts his commitment to seeing this right, but does he not understand that it is precisely the backing and energy that he expresses that renders it so deeply unsatisfying for councils that go to all this great effort when their plans are overturned by spiv developers trying to take advantage of a very difficult position?
I entirely understand that. I might well wish that we were in a world where we could say to everybody, “You’ve got a year. Make as much progress as you can in a year, and nothing will happen in that year.” My right hon. Friend will understand that, given the level of housing need and the appalling record of housing delivery even during the boom—when, frankly, money, developer finance and mortgages were not a problem—it is simply impossible for us to impose that kind of moratorium. However, I can tell him that in a matter of days, we will introduce the planning guidance that we have long promised and that will address the issue of the weight given to emerging plans. We will make it clear that once a plan has reached the point that, first, it has become specific and, secondly, it has gone through a fairly substantial level of public consultation, it will become something of real materiality—to use the lawyers’ phrase—as a consideration in decision making.
My hon. Friend and I agree about housing need and the value of plans when they are formed—it is good to hear that weight will be given to emerging plans in the new guidance—but my concern is that he seems to be giving the impression that everything is going swimmingly; it is not. The very neighbourhood plans that it is so important for people to embrace—he believes in that as much as I do—are being undermined, because people will walk away if they think that the inspectorate will overturn those plans. It is therefore a mistake entirely to dismiss the idea of giving stronger guidance. Unless people have confidence that they can take such judgments without their being overturned, they will not engage in the process. That is the damage that is being done. Commitments on giving weight to emerging plans have been given before. They were given during the passage of the Localism Bill. So far, those commitments have not counted for anything.
Perhaps this is the core of our disagreement: my right hon. Friend argues that I am too sanguine, and I say that he is in too much of a panic. Even on neighbourhood planning, the fact is that the figures for April, June and July show that the number of communities engaged in it has gone from 650 to 710 to 750, that the number of plans designated has gone from 300 to 360 to 408, and that the number of plans published pre-submission has gone from 24 to 28 to 35, so progress is being made. I understand that people are concerned, which partly prompts them and gives them the incentive to get the move on that we all want in trying to avoid unwelcome developments.
I will not give way to my right hon. Friend, because I have only three and a quarter minutes, and I want to address the many points made in speeches.
The guidance that will be produced at the end of July will be in draft. It will all go on what is an explicitly beta website. In truth, what applies now is the inherited guidance on prematurity from the last Government—it still applies in all decisions made in courts and elsewhere by decision makers—but the new guidance will be in draft form later in the summer and will be available for everybody to comment on. I absolutely encourage my right hon. and hon. Friends to comment if they do not believe that the guidance goes far enough in attaching weight to the emerging plans. I reiterate, however, that the best possible thing is for them to look up from the here and now and to think about their community in 10 years’ time—
I am sorry, but I will not give way again as I have many points to cover.
My right hon. and hon. Friends may miss one development that their communities do not like and that they would have opposed, and which would have been backed up by the inspectorate if their plan was in place. Perhaps they will, but they will be able to control and decide 10 years-worth of developments if they put in place a plan that meets their objectively assessed needs. That has been done in Thame, which will now determine its own future. There have been developments in Thame that the town did not like: it did not just say, “Right, we’re giving up,” but, “That makes it even more important to put even more energy into the process of producing a neighbourhood and local plan.”
I therefore urge communities not to lose heart. Childbirth is a painful process and gestation is not without its pains and difficulties, but the process resulting in local communities having local plans and neighbourhoods having neighbourhood plans will—I promise—be one in which everyone feels that they are in control of development in their area in a way that was never true under Labour or previous Conservative Governments. We are involved in a revolution. Revolutions are not quick or painless, but this revolution is gathering pace and beginning to work.
I urge my right hon. and hon. Friends to continue to write to me and to invite me to their constituencies to submit me to absolutely proper pressure, but not to give up hope. Every Government Member will be able to campaign with pride on the Localism Act at the next election in 2015, because by 2015 it will have delivered.
International Commission on Missing Persons
I am grateful for the opportunity to speak on the important issue of UK policy on the International Commission on Missing Persons. The debate is particularly timely as last week we commemorated the 18th anniversary of the Srebrenica massacre, in which 8,000 Bosnian Muslims were killed in what was declared to be the worst crime on European soil since the second world war. At the memorial service of that anniversary, 409 newly identified bodies were buried, giving families some closure on the grief that they have been living with for almost two decades.
Last year, I travelled to Bosnia on Project Maja with Baroness Warsi and, while in Sarajevo, I visited the International Commission on Missing Persons. I was struck by that unique and highly effective organisation, which has revolutionised the international community’s approach to addressing the issue of missing persons. In doing so, it has made a genuine contribution to justice and peace building in the Balkans and elsewhere in the world. Since that visit, I have wondered what the UK Government can do to support its vital work, and I am grateful for this opportunity to put some questions to the Minister directly today.
By way of background, it may be helpful if I first offer Members a brief introduction to the organisation. President Clinton founded the ICMP in 1996 as an organisation to clarify the fate of missing persons following the Balkans war. Confronting the scale of the problem, the ICMP developed state-of-the-art DNA identification technology and has helped to resolve 70% of missing persons cases from the 1990s conflict, including 7,000 of the 8,100 missing from Srebrenica. Such unparalleled results provide the means to end the desperate uncertainty that families have endured. The ICMP has also provided irrefutable evidence to the domestic and international courts that heard war crimes cases, including those of Karadzic and Mladic. For the first time in history, DNA evidence is being used to convict the architects of genocide.
The distinctive expertise that the ICMP brings to this field is reflected in the growing contribution that it is making beyond the Balkans. This year, having just opened up offices in Libya, the ICMP received funds from the UK, which were announced by the Prime Minister during his visit to Tripoli. The organisation has already started DNA testing, and within just one month it identified 100 victims of Gaddafi’s forces.
The ICMP has also been working in Iraq for several years. Sadly, it is clear that, in the future, Syria will also require similar assistance. Indeed, as the conflict in Syria continues to rage on, it should be noted that according to information received by the ICMP, at least 28,000 people are thought to be missing. As we look to the future and hope for a peace settlement, I would like to ensure that the issue of missing persons is addressed in the context of any future peace agreement, just as it was in the Dayton peace accords that ended the conflicts in the former Yugoslavia. Furthermore, it is important that action is taken now to work with the thousands of families who are displaced in Turkey, Jordan, Lebanon and Iraq because of the conflict and who have missing relatives, so that when the conflict ends, measures will already have been taken to address an issue that will figure prominently in rebuilding Syria and restoring peace to the region.
In addition to its post-conflict work, the ICMP has assisted Chile, Colombia and South Africa with addressing missing persons cases following human rights violations, and it has also assisted in the aftermath of natural disasters in Thailand and the Philippines and Hurricane Katrina in the United States. In total, the ICMP has identified the remains of more than 19,000 individuals in the past decade.
Having learned about the widespread and vital work of this organisation, I now come to the crux of the matter, which is that the future of this important organisation is in jeopardy. I believe that the UK Government can do more to support its future. However, this is a matter not of funding but of diplomatic support. Having achieved what it was established to do in the western Balkans, the ICMP is gradually winding down its assistance in that region. Yet all of its programmes worldwide rely, with varied effectiveness, on a legal status recognised in a few states in the Balkans and a headquarters in Sarajevo. That is not a sustainable basis for its future.
The ICMP is not incorporated under the domestic law of any one country, and it is not a non-governmental organisation. Its lack of formal international legal status hampers its ability to carry out its work and, as a result, it was forced to close its office in Colombia and its efforts in Libya and Iraq are being put at unnecessary risk. A draft legal framework was negotiated by the US, the UK, the Netherlands and Denmark in 2004, within which ICMP could operate, but the document was never concluded, leaving the ICMP without a permanent, internationally recognised status.
So what can the UK do? I was initially keen for the UK to take the lead on supporting the ICMP and for the organisation to be based in the UK, but I have been persuaded that the logical place for it to have a sustainable headquarters would be in The Hague, which is keen to provide the ICMP with a home. As the seat of many international justice institutions, including the International Criminal Court, The Hague would be an ideal permanent base for the ICMP. However, the Dutch condition is that the ICMP’s legal status be put on a more sustainable footing, allowing it to operate in the Netherlands, and in the often dangerous countries in which it works, with the immunities it needs to protect its database of genetic information, some of which is voluntarily provided by family members of the missing.
The Dutch Foreign Minister is prepared to lead a process aimed at securing that status, but only if he has reassurance that the other partner countries will support his efforts. This is where the UK Government could do more. To assure the future of the ICMP and to secure its work, it is vital that the UK give a clear signal of support for the Dutch initiative. I therefore urge the Minister to make the UK’s support clear, thereby making a decisive contribution to securing the organisation’s future for the benefit of all.
The Foreign Secretary visited the ICMP last October, which was an excellent signal of support, and the Foreign and Commonwealth Office has been actively working with the Netherlands ever since to resolve questions over the ICMP’s future status. As a matter of principle, I am no advocate of tying the UK to permanent financial commitments with international organisations, but the fact that ICMP has not had the luxury of permanent funding, and that it has innovated and managed costs effectively at every stage in its history, underscores another critical reason for me to support the organisation. Furthermore, having developed a broad range of programmes and the world’s largest human identification laboratory, the ICMP has a budget of a mere £5 million, which means that its endeavours to alleviate suffering around the world are very cost-effective. It does not seek any permanent funding commitments. Instead, a permanent legal status will enable it to build on an exceptional track record of success in raising voluntary contributions.
It is clear that an effective response to the tragedy of missing persons caused by conflict is, and will remain, a fundamental element of successful conflict prevention and post-conflict resolution. The UK has a direct interest in ensuring that present and future international peace-building strategies include missing persons as an integral element. To assure the ICMP’s future, it is now time for the UK to take a leadership role in encouraging other states to support the Dutch initiative to give the ICMP a permanent status. I look forward to hearing the Minister’s response both to the idea of giving the ICMP a permanent legal status and on what the FCO can specifically do to give the ICMP the support it duly deserves.
Finally, I wish to thank a number of individuals for their insights: first and foremost, Adam Boys and his team at the ICMP for the tremendous work that they do; Baroness Warsi, for introducing me to Bosnia through Project Maja; my hon. Friends the Members for Beckenham (Bob Stewart) and for Bournemouth East (Mr Ellwood), for sharing their experiences in the Balkans; Lady Nott, for taking me to meet the mothers of Srebrenica; my researcher, Lara Nelson, for helping me to put together this speech and indeed for all her work for me during the past three years; and finally everyone at the Foreign Office, especially Arminka Helic, for their input and encouragement in helping me better to understand the work of the ICMP.
May I begin by saying how delighted I am to serve under your guidance this morning, Mr Hollobone?
I congratulate my hon. Friend the Member for Braintree (Mr Newmark) on securing this important debate on the International Commission on Missing Persons. I know that it is an issue in which he takes a very keen interest, and with my colleague Baroness Warsi he has visited Sarajevo to see the ICMP’s incredible operation at first hand. I also congratulate him on the articulate and knowledgeable way in which he introduced this important debate.
I know that my hon. Friend shares my view that often when conflict and violence end, our attention is drawn away too quickly to another crisis and other parts of the world. However, for many people a conflict cannot truly end until they know the fate of their missing loved ones. Those loved ones are parents, wives, husbands or children, who are often civilians and not combatants and who were separated from their families by the chaos of war, who disappeared while in detention or who simply did not return home one day.
As the House may be aware, this week saw the burials of another 409 newly identified victims of the Srebrenica massacre. This year alone, more than 6,000 victims of that massacre have been identified and 6,000 families—after 18 years of uncertainty, anguish and longing—at last have a chance to mourn their dead and to give them the dignity of a decent burial, as well as an opportunity for acceptance and closure.
However, as my hon. Friend quite rightly pointed out, those events, while solemn, could not have taken place without the ceaseless and vital work of the ICMP. As he also rightly said, the ICMP has identified approximately 16,000 people from the conflicts in the former Yugoslavia, including 85% of those reported missing after the fall of Srebrenica. The ICMP has also responded to requests for documentation and expert testimony from international and domestic courts on matters relating to serious international crimes. Without the ICMP, many families in the former Yugoslavia would have been unable to gain any form of closure, and without that vital closure the feelings of injustice and resentment would continue to build, fuelling ethnic tensions and making reconciliation all but impossible, particularly for future generations.
That is why the Government have played an active role in championing the ICMP’s work, alongside our broader conflict prevention, peace-building and international justice policies. We are firmly committed to the ICMP, just as we are committed to challenging impunity and ensuring accountability for the most serious international crimes. We are clear that where there is no accountability, there is no justice, and that where there is no justice, there will not be lasting peace, reconciliation or stability. That is why we also welcome the excellent work that the ICMP has done, including sharing its pioneering expertise, particularly in the use of DNA, in other conflict zones.
Although it is of course saddening that the ICMP’s work continues to be relevant and needed, we recognise the important role that it has played, and will continue to play, in identifying many missing people in places such as Iraq, Kosovo, Libya and—my hon. Friend made this point forcefully—in Syria. It is clear that in the aftermath of the terrible conflict that is raging in Syria, Syria will face many challenges to achieving peaceful transition, recovery and reconstruction. The UK will continue to support the Geneva II process to deliver a transitional governing body with full executive authority. I am sure that my hon. Friend will accept that it is for the Syrian people to agree the make-up of a transitional Government who can win the consent of all Syrians, and to decide how transition will take place, including—importantly—the future role of the ICMP in Syria. However, we believe that the ICMP’s expertise will be relevant, and we continue to work closely with the United Nations to ensure that the international community is ready to support a future Syrian authority to rebuild stability and democracy.
Of course, the ICMP makes a vital contribution not only in conflict zones but in its work to identify the victims of natural and other disasters, such as those that have happened in Thailand and the Maldives, and following Hurricane Katrina in the United States.
It is in recognition of its work that the Government have provided consistent political and financial support to the ICMP for a number of years; again, that was accurately pointed out by my hon. Friend. In addition to contributions made through the European Union, the UK Government have directly provided more than £3 million in funding towards the work of the ICMP since 2000. Recent UK programmes have included funding of almost £400,000 to assist the ICMP with identification of missing persons in Libya.
I thank my hon. Friend the Minister for everything that he is saying. However, it is not only a financial commitment that the ICMP seeks, because frankly I could go round to a bunch of my friends and raise £5 million to keep the ICMP going. The ICMP’s frustration is at the lack of political will by the major countries—including even the United States, which originally formed the ICMP—to give it permanent legal status. That is what the ICMP needs, and I wonder what the Government will do to assist it in giving it the permanent legal status it needs, because that is what its future depends on. The clock is ticking, the ICMP’s centre will close down this year and if the ICMP does not gain permanent legal status we will not be able to help families, for example in Syria, who will have missing persons and who will need the support that the ICMP provides.
I am grateful for that intervention by my hon. Friend; he is not only visionary but prescient, because I am about to address exactly the point that he has just raised. He is absolutely right that it is important to fund the future work of the ICMP through projects, but the ICMP does not just need financial support. The ICMP is keen to secure a legal status and move its headquarters. Despite the success of its projects, we also understand—again, this was a point that he correctly made—that ICMP programmes have been thwarted because of its current legal status. That is why it is all the more important that the ICMP be afforded a status that allows it to operate with Governments and countries across the globe.
The Government support the ICMP’s efforts to establish a legal status that will afford its staff, records and equipment the protection required to allow it to operate in potentially hostile political environments, and to have a global reach and an international profile that befits the importance of its role. It is vital for the families of the missing, and for the processes of reconciliation and international justice, that the ICMP be able to continue its work unimpeded and that the expertise that has been developed is not lost. I agree with my hon. Friend about that.
The city authority of The Hague has offered the ICMP the opportunity to relocate its headquarters there, and the Dutch Government have offered assistance in dealing with questions of policy and legality, such as securing legal status for the ICMP. We readily support the Dutch Government’s initiative in offering the ICMP a new home in The Hague, alongside other international institutions. Officials from the British embassy in The Hague took part in an initial working group held in May, specifically to discuss the issues that my hon. Friend outlined, and we will participate in further discussions as we move the process further.
For my hon. Friend’s information, we will participate in the next ICMP event in The Hague at the end of October, at which it will share its ambitions and plans for the long-term future. In parallel, we will also consider who should fill the significant role of the UK’s international commissioner to the ICMP.
As my hon. Friend will know, last week we marked the 18th anniversary of the Srebrenica genocide. It needs to be said that, although significant work has been done, there is still a significant amount more to do. Sadly, some of those responsible for the appalling atrocities that took place are still at large and many victims’ remains have not yet been identified. The difficult, painstaking work must continue, not just in the former Yugoslavia but in some of the other places that we have discussed this morning.
In conclusion, the Government will continue to support strongly both the ICMP’s work and efforts to formalise its status. Once again, I thank my hon. Friend. I reiterate that the UK Government are committed to the ICMP and will continue to press other Governments to do likewise to ensure that it is as effective a body as possible, so that reconciliation, peace and stability can be brought into being and maintained in some of the places around the world that have suffered terrible conflict and atrocities.
Money Transfer Accounts
[Hugh Bayley in the Chair]
It is a pleasure to serve under your chairmanship, Mr Bayley.
I am delighted to have secured this debate on the provision of money transfer account services by banks and their impact on Britain’s ethnic minority communities in particular. Remittance plays a vital and complementary role in helping to lift millions of people out of poverty across the world, and it plays a vital role in ensuring that, as well as our commitment to aid, we engage the public in giving to their loved ones, who are often on the verge of poverty and would not qualify for development aid. This is a vital debate because we need to consider how we support individuals to give to family members across the world.
Remittance helps to save lives through direct support by providing for loved ones in remote areas of the world. It helps save lives in the Indian subcontinent, for instance in Pakistan and Bangladesh, and in many other places, especially during times of crisis such as Cyclone Sidr in Bangladesh a few years ago and the earthquake and floods in Pakistan. Many of our constituents from various African and Latin American countries send money through remittance.
I will focus on the recent decision that has propelled us into calling for this debate. Barclays made the decision to withdraw banking facilities from small and medium-sized community-based money transfer agencies, which provide low-cost, legitimate routes for sending money to remote places across the world. In some of those places, it is very difficult for mainstream money exchange and money transfer companies that do not have networks, agents or structures to get assistance to family members. Taking the example of disasters, those are the times when people need to get assistance to their families immediately, which is certainly what happened in countries such as Pakistan and the many others that I mentioned.
I thank the hon. Lady for giving way so early in this debate. One area she has not mentioned is Poland. I have a large Polish community in my constituency that is facing the loss of One Money Mail, which has become a tried and trusted service for many people in the Polish community when sending remittances back to Poland. Those people are extremely concerned that they may have to lose the service, which they have grown to trust and which they use frequently; it will be a great loss to the community.
I thank the hon. Lady for her intervention. She has added an important perspective to the debate, which is that the issue also affects countries that people might not have thought about.
I commend parliamentarians, because some 46 Labour MPs have already signed a letter to Barclays, and I know that the all-party group on Somaliland and Somalia has also made representations to the Government. MPs and parliamentarians from both sides of the House, and many other people, have raised the alarm bell with the Government. That highlights our deep concern about how decisions that have been made in the past, not just by Barclays but by other banks such as HSBC, to remove banking facilities that are affordable for hard-pressed families who are trying to get support to other parts of the world, have been supported rather than punished. We should encourage people to give, and I hope that the Government will consider the issue closely.
According to the Financial Times, more than 250 money transfer companies are now facing closure following the decision by Barclays to withdraw the service. Other banks have already withdrawn it, so the suggestion that those small and medium-sized companies could go elsewhere is nonsense. We need to ensure that the decision of those banks does not send a signal to other banks that there is something wrong with such businesses and that other banks should not do business with them, which is essentially what has happened. That is the insidious conclusion that is being drawn at the moment. Allegations are being made that those businesses, many of which are in our constituencies, are engaged in activity that is not legal.
Barclays has said to me that it is concerned about only the 1% of companies that represent 46% of the problem. The Government and regulatory authorities should consider how to assist Barclays and other companies that need to clean up operations where there are problems. If that 1% is a problem, assistance should be provided to address that problem rather than involving the 99%, in the case of Barclays, that do not pose a problem. If that logic were applied to the banking sector, for instance, we would not have a banking sector left. I ask the banking sector to have some empathy and to think about what the consequences would have been for it if, during the financial crisis, all companies in the sector had had to be shut down just because there were certain bad apples.
I hope the Minister will consider the issue and answer the question about how we can focus and zoom in on the areas where there are cowboy operators, which none of us want. The diaspora and ethnic minority communities in this country and across the world do not want to see cowboy operators; they want legitimate, well regulated mechanisms for sending money to loved ones.
As I said, 45 other MPs and I supported the letter to Barclays bank that the Minister has seen, and I look forward to hearing what he, his Department and the regulatory authorities will do to try to help with this important matter. We are asking for some breathing space. We are asking Barclays—I do not believe this is an unreasonable request—to extend the date from August by another six months to give the Government, the regulatory authorities and the Minister the breathing space to bring people together, including the British Bankers Association, the banks and interested parties such as the money transfer agencies and the communities that use their facilities, wherever possible, to arrive at a solution that does not lead to the industry’s closure.
More than $3.2 billion of remittance a year is sent from the UK, and remittance amounts to some $530 billion worldwide, which is more than the total global international development budget. We must act internationally in concert with our American partners. The decision to apply fines to Standard Chartered and HSBC has led to the decision by UK banks such as Barclays to stop remittance facilities. Frankly, the companies have nothing to do with what has happened in the US with the breaching of sanctions, or with the other cases in which banks have been involved, but they are being punished.
If we do not find a way to address the problem, the risk is enormous, because there will be no legitimate ways for people to send money to remote parts of the world. Of course, there is virtually no way for people to get assistance to countries such as Somalia through a legitimate route. We need a constructive way forward, and I hope the Minister can explain how his Department and officials will work with the banking sector to develop an industry-wide solution so that we can ensure that the remittance and money transfer industries are strengthened in light of the crisis, rather than destroyed.
I also hope that the Minister will consider that if banking facilities to money transfer agencies end, what is likely to happen is what used to happen before a regulated mechanism was in place. On the whole, people who are not wealthy want cheap and affordable means to get assistance to their loved ones, particularly in times of desperation and crisis, such as when a family member has died and money needs to be sent quickly for burials and associated costs, or when there is an urgent health care emergency, likely or actual conflict or a humanitarian emergency, as was the case in Somalia and the rest of east Africa in 2011 and as is likely to happen in future. If there is no legitimate route to send money, there is a major risk that the industry will be driven underground and that clandestine mechanisms will be used to get money to family members. If that happens in the billions of pounds, we will not be providing remitters with the back-up, support and legal mechanisms to send money safely to their loved ones. It will also mean that some countries are unlikely to be able to monitor the amount of money flowing into their economy, leading to inflationary pressures.
Furthermore, there are security issues. People worry, rightly, that their money might end up in the wrong hands, and potentially in the hands of extremists. In countries such as Somalia and Somaliland, there are grave concerns about that risk.
I congratulate my hon. Friend on securing this debate. She mentioned that more than £2 billion in remittances is sent abroad. It is important to emphasise that although that is a large amount, people often send small amounts— £50 or £100—to their family. Small businesses are therefore incredibly important to people without a lot of means who send small amounts of money.
My hon. Friend is absolutely right. The amounts of money are often small. People work hard to make a living and provide a bit of support. I know that because many of my constituents tell me stories about how they are supporting the education of distant relatives or immediate family members by sending them money every month. During Ramadan, which we are in right now, people have a duty to give charity, or zakat. They want to give it to people they know who are poorer, and not through charitable organisations, where administration costs are high compared with direct giving. There are many occasions on which people give small amounts of money. For example, the Muslim community in Britain contributes £100 million in charitable giving during the month of Ramadan alone.
A local activist in my constituency recently said:
“There is simply no other legal way of sending money to Somalia. If these firms are closed, it just means people will have to carry large amounts of money from airport to airport, and all that’s achieved is that everyone will end up a criminal.”
We cannot risk criminalising people who are simply trying to support their families.
Another major opportunity is at risk. Ethnic minority communities have insights and connections in their countries of origin. I see that in my constituency, as I know other right hon. and hon. Members do. They have insights into how to trade with their countries of origin, and affordable remittance facilities are critical to doing so. We are closing off opportunities for small businesses to operate and develop. It is also costing more than 3,000 jobs here in the UK and jobs in those countries.
I congratulate the hon. Lady on securing this debate. She has explained the security issues created by driving remittances underground. Is it not also true that it could drive the business into the hands of the big American globals, wiping out our domestic small and medium-sized enterprises in the market? That is a dangerous step, which the Government should do all they can to avoid.
Absolutely. I would be interested to hear whether the Minister has had any representations from such companies. I understand that some lobbying has been done, certainly in America. It would be useful to know whether he has had representations from bigger agencies, including MoneyGram and Western Union. One concern is that the underlying agenda is to shut down small operators because they do not charge as much and banks do not get as much revenue, and that this is about profit as much as anything else. We need clarity on the criteria that Barclays and other banks have used to stop providing banking facilities.
It is depressing that, unfortunately, the banking sector seems to have learned nothing from the past few years. Small community-based businesses are being hurt while they are trying to run decent businesses and support people. They should come together to consider how to address some of the underlying problems. We understand that there are grave concerns in the banking system about being fined by the US authorities. It is right that we should support the banking sector in ensuring that their due diligence processes are done, but that cannot be an excuse to shut down smaller companies just because they provide competition.
I will press on quickly to a few final points so that others can speak. Somalia presents a unique problem: it does not have a banking sector. That means not only that Somalia will be affected when remittance flows stop, but that humanitarian aid organisations such as Oxfam will lose the ability to send money to the region. Some 40% of people in Somalia who depend on remittance would be affected by that decision. Last year, the Somali authorities said that about $2 billion, or one third of the country’s GDP, is channelled to Somalia through small money transfer agencies.
The country has come out of a conflict that went on for a long time and cost many lives. It relies on the Somali diaspora around the world, who are working hard to rebuild Somalia and Somaliland. This decision would cripple the country. We cannot afford to let that happen, not least because it is in our interest to have a stable, prosperous and effective state in Somalia and Somaliland. That is what my constituents, many of whom are from Somaliland, want. I hope that the Minister will see the connection between this decision and its effect on undermining our aid and peace-building efforts in countries such as Somalia.
Although it could be said, and the Minister may have been told, that this is not as much of a problem for other countries that have a banking sector, the reality is—as he will know from his experience and background, as I do—that in remote places such as the Indian subcontinent, where we have our origins, during floods and in areas where there is no proper infrastructure and no proper roads, getting money to people is difficult. The banking sector is not localised enough. Banks such as HSBC might call themselves the world’s local bank, but they are not local enough. Our response must address the fact that it is impossible to get money to people, in particular at times of crisis, in countries throughout Africa, where there are still major infrastructure problems, and in many Asian countries, so that the banking sector—Barclays in particular—does not fob the Government off by saying, “Well, there are plenty of other operators available,” or, “The Government own a couple of banks, why don’t they to do it?” We need an industry-wide solution that is constructive and that safeguards the remittance industry and companies providing remittance services at low cost.
I have a few final points. On competition, I hope that the Government and the regulatory authorities will look closely at what is really going on. To what extent is this about trying to respond to the fact that these organisations are giving—to use a metaphor—the larger money transfer agencies a run for their money? To what extent is this about the regulatory pressures? I believe that to some extent it is. Where the regulatory concerns are legitimate and genuine, what can the Government and the regulatory authorities do so that we have a set of criteria for those companies to fulfil? Barclays and the regulators certainly have not provided any criteria or explained why banking facilities are being withdrawn. That is the least that these businesses should expect when they employ more than 3,500 people here in the UK and provide desperately needed assistance, not to mention trading opportunities between our country and developing countries.
I hope that the Minister will be able to look broadly at those interconnected issues. I have been told by his fellow Minister in the House of Lords that Barclays is merely making a commercial decision, but we have a responsibility to developing countries, where remittances support millions of people, taking pressure off our international aid budget. We also have a responsibility, if the sector is pretty much eliminated through those decisions, to ensure that money transfers and flows are not driven underground. How do the Minister and his colleagues in the Department for International Development intend to address this? Will he work with our American allies on an international solution, because we recognise that they are calling the shots on fines? Will he make representation to Barclays to provide six months of breathing room to allow the industry, working with the Government, to come up with a framework that can protect this vital industry?
As we speak, thousands of people are signing petitions; the diaspora community, in particular, and the aid agencies in the different sectors believe that people’s lives will be devastated. I hope that the Minister will work with the regulatory authorities on a solution—my colleagues and I are also happy to work with him—because we do not want to return to a debate in years to come and hear that, because of the decision today, many of the agencies stopped operating and people ended up being exploited. In some cases, money might be stolen—we have seen past examples of that—because the sector is not regulated at all, and in some cases remittances might end up in the hands of the wrong people, such as terrorists, and that would be a dereliction of duty on our part. The international community has a responsibility to ensure that people can get money safely and securely, and at an affordable rate, to their loved ones around the world.
It is a pleasure to serve under your chairmanship, Mr Bayley. I also place on record my appreciation of my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali), not only for securing the debate, but for championing the cause—raising awareness, expressing concern and bringing MPs of all political parties together to ensure that the issue reaches a far wider audience. I genuinely appreciate that. She said much about this banking policy and how it will affect people in Somalia and other countries, and I want to concentrate my comments on the impact in my constituency and similar towns in the United Kingdom.
As long ago as November last year, I wrote to HSBC about one of my constituents, Mr Shamshad Ali—I have the letter with me. He has a money service business called Sterling Currency Exchange Ltd and is the general secretary of the remittance association of the United Kingdom. HSBC decided unilaterally to close his bank account, because it no longer wished to operate in the sector. I worked with Shamshad to get the bank to change its mind, but to no avail. He and I then worked together to find an account with another bank, again to no avail. As Shamshad pointed out, we tried the Royal Bank of Scotland and NatWest, both funded through the public purse and in receipt of much public money, but they too refused him. He now has to operate his business in conjunction with another business, which still has an account with Barclays—but time is running out, and that might well end as well.
The Government need to know about the serious consequences, which include the closure of good businesses, as my hon. Friend pointed out, at the cost of many thousands of jobs throughout the United Kingdom and certainly of a number of jobs in Rochdale. There is also a direct impact on people in my community. Migrant workers, many of them professionals, many on whom the Rochdale economy relies, depend on those independent businesses to be able to send money back to their country of origin. Those workers are being turned off working in towns such as Rochdale, which concerns me.
I thank my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) for securing the debate and I thank my hon. Friend the Member for Rochdale (Simon Danczuk) for giving way. I, too, have many people from Somalia and other parts of the world living in my constituency. The important thing, which we often learn, is that the family back home rely on the money being sent to them to survive. If they are not allowed to survive in that way, they go underground and are driven to other means. The sooner the Minister takes the matter up and talks to the banks in this country, the better, because not only are people in Somalia affected, but Somalians and other people who have businesses in this country, through transactions and jobs.
That is exactly the point that I am leading on to. People in my community send money back to their families—in this instance, in my constituency, to Pakistan, Kashmir and Bangladesh. At this important time of Ramadan, as my hon. Friend the Member for Bethnal Green and Bow pointed out, people rely on the businesses that we are discussing to help them send charitable contributions to the countries from which they originate. We should not underestimate that. Friends and families out in other countries may be exceptionally poor and reliant on such charitable donations, in particular at this important time of year of Ramadan, to help them to celebrate Eid and to buy new clothes, so that they can have a reasonable time at a key point in the Islamic calendar. As a result of the changes, my constituents, instead of being able to use a good, local and independent firm, which complies with all the regulations, will have to use one of the banks, Western Union or MoneyGram.
On the point about small businesses following regulations, may I share with my hon. Friend my experience of sending money abroad? In my constituency, the regulations are followed with passport copies, addresses and so on. Does he agree that it is disingenuous of the banks to use that as an excuse for not carrying out transactions for those companies?
Absolutely. That does seem to be an excuse, and is the crux of where we are.
Another point that has been made clear to me is that without the small independent firms in towns such as Rochdale, my constituents, instead of paying a flat fee of £5 and receiving a good exchange rate, will have to use Western Union or MoneyGram, pay a flat fee of £20 and receive a less competitive exchange rate. They will have to use a less local and less personalised service and pay more for it. That is the consequence, which can only be described as outrageous.
I have some points for the Minister to consider. First, why is Barclays closing these accounts after it made businesses spend thousands of pounds on compliance? Secondly, why are Western Union and MoneyGram not affected? I believe that Western Union in registered in southern Ireland, not the UK, for tax purposes and perhaps that is an issue in its own right. Thirdly, will the banks benefit and start to do the sort of business that they are denying small independent firms from doing? The changes will push such businesses underground, which could feed the criminal fraternity. I urge the Minister to do all that he can to remedy the situation.
I congratulate the hon. Member for Bethnal Green and Bow (Rushanara Ali) on securing this important debate and on all her work on the matter. I declare an interest, which is in the Register of Members’ Financial Interests, as a non-executive director of a global consultancy, Developing Markets Associates, which is an expert on this subject.
During my time as a Foreign and Commonwealth Office Minister for Africa and the Caribbean, I received many briefings on the importance of remittances and the role that they play. As the hon. Lady pointed out, they complement the aid and development programme of many countries, including Britain, France and America. Very often, those remittances get through to areas such as small businesses, self-employed people and small non-governmental organisations and charities that aid money can never get to. Furthermore, they bypass any infrastructure of bureaucracy or middlemen and go direct to communities, where they can make a real difference.
I think that everyone agrees that those remittances are vital not just to the communities that receive the money in developing countries, but to the developed countries from where the money comes. As the hon. Lady said with her intimate knowledge of her own community, which was reinforced by the hon. Member for Rochdale (Simon Danczuk), communities here that we welcome as part of this country often feel a moral responsibility to help family members back in the countries where they came from. The agenda is incredibly important.
I know, from having visited Somalia on a couple of occasions, the importance of that country, which is coming out of conflict. It has been through the most appalling time. At long last, there is stability in Somaliland, and there has been for some time. There is now a Government in Mogadishu who can control much more of the country, and certainly the big cities of Kismayo, Beledweyne, Berbera are now under the Government’s control. It seems that normality is resuming in some of those areas, but there is still a long way to go before a normal banking system can be set up to support businesses and communities in the way that banks do, or should do. The more recently that a country has come out of conflict, the more crucial that is to its economy.
I want to touch briefly on one or two points concerning recipient countries and then on the current crisis that has been caused by the action of some banks. In recipient countries, the danger in the past has been that a lot of remittance money has simply gone under the bed. Many people have not had enough of an incentive to use money responsibly through a bank account or to invest in a business. The tendency has been to put money under the bed for a rainy day and to use it on an ad hoc basis.
Perhaps our own Department for International Development and aid departments in other countries should explore how money can be made available for investment in small businesses, self-employed projects and other areas. At the moment, there is certainly a considerable lack of understanding of how that money is spent. It reaches the communities in different ways and often the charges when transferring it and sometimes when receiving it can be excessive.
What work can the Treasury and the Department for International Development do to understand better what is happening in some of those countries, how that remittance money can be better harnessed for the benefit of the communities and whether there is a role for telephone banking, which is taking off in many developing countries? I understand that the UK has signed up to the five times five commitment to halve remittance prices by 2014. Perhaps the Minister will tell us what progress has been made on that commitment.
As the hon. Member for Bethnal Green and Bow pointed out, the UK has 60% of the total number of authorised payments institutions and single payment institutions in Europe. That is a huge figure, so any action taken by the banks in the UK in closing accounts of money transfer agents will have a disproportionate effect on the UK. We are facing a serious problem. I do not want to underline too heavily any criticism of Barclays and HSBC. It has not been said so far that Barclays was fined $300 million in the United States earlier this year and HSBC was fined a larger amount for allegations of money laundering that were not proved in court but were settled out of court. Our high street retail banks are wary of any dealings with America, but their action is precipitate.
Will the Minister have urgent discussions with the US Treasury Department and the US State Department because US regulators are setting the agenda, which is having the damaging impact that hon. Members have referred to and that will lead to job losses and many people being put out on a limb? They will have to take whatever action they can and may have to look at illegal routes. More money will go to cash couriers and there will be huge disruption, so I urge the Minister to have urgent discussions with his US counterparts, having listened carefully to what has been said in this debate.
Perhaps the Minister could also have discussions with the Financial Conduct Authority, because we are talking about a regulated sector. The irony is that it is regulated, but it is respected, does a good job and fills an incredibly important niche. It employs a significant number of people, but it could be forced underground and people would have to pay much higher rates. Furthermore, consolidation may be sensible in some industries, but we would see many small businesses put out of business with higher charges and a worse service. I urge the Minister to take this agenda seriously.
It would be helpful if the Minister told us what discussions he has had with the Department for International Development on this important matter and whether the Treasury and DFID will work together on what is happening not just here in the UK, but in receiving countries, which badly need help, involvement and engagement.
It is always a pleasure to serve under your chairmanship, Mr Bayley, and I know you take a great personal interest in these issues. I congratulate my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) on securing this important debate. I also congratulate other Members on the excellent contributions that we have heard so far.
I declare a number of interests. Like many other Members, I have a significant number of constituents from Somaliland, Somalia, Yemen, Pakistan, India, Bangladesh and Sudan. Those communities have a long and proud history in my constituency, and they all remit funds to those locations. I also declare an interest as the secretary of the all-party group on Somaliland and Somalia.
Some weeks ago, these issues were brought starkly to my attention by a number of the money transfer organisations involved in remitting to Somaliland and Somalia. A month ago, we had urgent discussions with the new ambassador to Mogadishu and with senior Foreign Office officials, so people have been aware of this challenge for some time, and I will return to that at the end of my remarks.
I want to underline how important remittances are and how crucial it is that we find a solution and get things right. Members have spoken of the value of remittances to individual families, who are often in difficult circumstances. Oxfam provided a helpful briefing, which said:
“in most cases, money received is used to cover basic household expenses including food, school fees and medical costs.”
It notes that, in a recent survey,
“one third of respondents said that they would not be able to meet these basic needs if remittances were stopped.”
That is in addition to the concerns Oxfam and other humanitarian organisations have about their ability to provide services if money transfer services are stopped.
Many hon. Members have mentioned the security and stability implications, particularly in the case of Somaliland and Somalia. The hon. Member for North West Norfolk (Mr Bellingham) eloquently noted that the changes could be a step back for the country, which is coming out of conflict and instability. That is certainly not what the UK Government want, particularly after the recent Somalia conference and the many other steps that friends of Somaliland and Somalia have taken to see the two countries progress.
Remittances are also a complement to aid. There are two crucial issues. This is not only about my constituents; it is also very much in the UK national interest to find a solution to this problem. Remittances play a crucial role alongside our aid moneys. In the end, we want to graduate countries out of aid and ensure that they can stand on their own two feet, so pulling the rug out from under a number of them in this way will be particularly problematic.
We have heard many of the figures already, but I want to reflect on a few of them. I have tabled questions to the Treasury, and the answers show that the UK remits upwards of $23 billion a year to third countries. Remittance flows globally are estimated at upwards of $500 billion. Those are huge sums and often dwarf aid flows to countries.
An answer from the Minister of State at DFID said that the Department estimated that Somaliland received upwards of £500 million annually, while 50% of Somalia’s gross national income came from remittances, which ultimately supported 3.8 million people. Those are huge numbers, so this is not a small problem—it is fundamental to the ability of these countries to be successful. As my hon. Friend the Member for Bethnal Green and Bow said, Somaliland and Somalia face particular problems, which need to be addressed. They do not have the services that are available in some other countries, and with 70% of money transfer services potentially affected by the changes, we really have a very large problem.
I do not think that anyone would disagree that we want safe and secure transfer methods for senders and recipients. There are also legitimate concerns about money laundering, terrorist financing and other issues, although only a small amount of remittances are affected by such activities, and the vast majority end up in the destinations where they belong. However, we really could be jumping from the frying pan into the fire. We could increase the security risk and end up with channels for transferring money that are not policed or regulated in the same way as existing channels. Individual constituents could be ripped off, as they are forced to use more expensive or less secure methods of sending remittances —indeed, there is the possibility of theft increasing and money going missing—rather than the reputable organisations that already operate in this field. With 70% of money transfer services potentially at risk from the changes, we have a huge problem.
As I said at the beginning of my remarks, I met Foreign Office officials and the new ambassador to Mogadishu some weeks ago. Since then, I have had discussions with the Minister and with other officials. I have also had discussions with Barclays itself. My hon. Friend the Member for Brent North (Barry Gardiner) and I secured a meeting with it the other week, and we had a constructive conversation, notwithstanding the criticisms and concerns that have been raised, a number of which Barclays must answer further questions on. To be fair, however, Barclays was constructive, and it did not just want to shrug its shoulders and turn away from the issue; it wanted to work with the Government and diaspora communities to find solutions.
I was therefore concerned when Barclays told us that it had written to the Treasury two weeks ago. I have the letter here, and it is dated 3 July. Indeed, Barclays has had other correspondence with the Treasury. I very much hope that the Treasury has responded by now. Barclays offered to sit down and have constructive discussions with the Treasury, the Foreign Office, DFID, the Home Office and all the other interested Departments to try to find solutions. This is really one of those cases where the Government have to step in.
We were indeed at the meeting together. It is a very constructive suggestion that there should be a round table with all the major banks, which can then work with Treasury to resolve the problem. It is unfair to load everything on to just one bank, which happens to be the last in line. The Treasury needs to address this issue very seriously. Mr Bayley, let me also apologise for coming late to the debate, owing to another commitment.
My hon. Friend makes the point perfectly. As I said, there was a great willingness on the part of Barclays to sit down with Departments. I hope the Minister can reassure us by telling us what steps have been taken—perhaps in the past week—so that we can know that these conversations are going on and will involve all the crucial Departments. Obviously, numerous Departments, banks, organisations and Members have an interest in resolving this matter. Barclays had a number of technical solutions, which I was unable to comment on, but I hope that Treasury officials and the Minister might be able to.
I second the comments made by the hon. Member for North West Norfolk regarding the need for the Government to engage in urgent discussions with the United States, where a lot of the regulatory pressures are coming from, so that we can secure answers.
In conclusion, this is a huge problem with serious implications not only for my constituents and their families, but, ultimately, for this country’s national interests in international development financing and our security needs. We urgently need to find a solution because time is pressing and will run out at the end of August; otherwise we will find ourselves in a very difficult situation.
Mr Bayley, I will endeavour to get through my speech as quickly as possible, given that request from the Minister.
I thank my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) for the fantastic job she has done in leading the campaign on this issue. She has been a brilliant advocate on behalf of her constituents and those of many other Members in the room, and I thank her for that.
Last year, my hon. Friend visited my constituency, which is the neighbouring constituency to that of my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), whom I am following in the debate. She met many of my constituents who use a business in Riverside called Trust Exchange UK Ltd, which is run by Anwar Ali. It is a model of what a small business in our local communities should be—goodness knows, we need more small businesses in Wales, in particular. It is the only business of its kind in Wales. It deals with many of my constituents, my hon. Friend’s constituents and others who want to transfer money to relatives, often overseas.
I will not go through the arguments other hon. Members have given for the importance of such transfers. However, my hon. Friend the Member for Bethnal Green and Bow pointed to the huge value of this business and its importance to developing countries, with remittances representing a far larger sum than international aid. That is not something we hear much about in the press, but I hope the debate will help to highlight it, as well as the importance of remittances to the countries involved and to our constituents.
My constituent Anwar Ali approached me some time ago about this matter. I was quite shocked when he told me that, effectively, he would be put out of business by the decision by Barclays bank. His business not only provides a valuable service to my constituents but has been involved in setting up charitable work, aid projects and so on, particularly in Bangladesh, reflecting Mr Anwar Ali’s ethnic origin. It provides a service to people of all sorts of ethnicities and from all sorts of communities.
The point has been made that it is not only Barclays that is involved, and that other banks involved in the business have withdrawn before. HSBC was found guilty by the US authorities of a “blatant failure” in relation to anti-money laundering legislation, and was required to pay a record $1.9 billion fine as a result. Perhaps understandably, it has become extremely risk-averse about the sort of business we are talking about, and businesses such as Barclays have taken notice.
It seems that the principle that applies for large banks is “innocent even if proved guilty”. Being found guilty of money-laundering activity and getting a huge fine means being permitted to carry on business. Western Union, which was mentioned before and which seems to be due to benefit greatly from what is happening, paid $94 million in February 2010 to settle civil and criminal investigations by the Arizona attorney-general’s office, in relation to having turned a blind eye to the movement of illegal funds by drug cartels in Mexico. In the light of that, would not it be ironic if Western Union were to benefit from the decision to withdraw services from the small companies that provide our constituents with financial services on a small scale, and which have done everything to obey the compliance regulations, and if those local businesses were to be put out of business?
The local businesses seem to be subject to the principle that they are guilty when nothing has been proved against them—when they have done all that is legally required to comply with regulations. Small is not beautiful in this case; small is vulnerable, and small businesses are being assumed to be guilty when they have done nothing wrong—even when big businesses have been proved to have acted illegally and have been fined. Is the Minister content that small businesses that have done everything possible to comply with the law and regulations will be put out of business by the decisions of large organisations, which, leaving aside the activities that nearly brought the country to economic ruin, have often been proved to have engaged in activities outwith regulation, and have been heavily fined? If he is not content, what will he do to ensure that the Government, and in particular the Treasury, take a more active role to save those small businesses at the eleventh hour, before they are put out of business?
We have heard about the Barclays letter, and I hope that the Minister will give a positive response from the Government to the proposal for an industry round table. I hope that he will speak up for small British businesses, which have done nothing wrong.
I apologise to my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) and to the Minister. I have a Select Committee meeting at a quarter to 4 and hope that they will accept my apologies for having to leave.
I want to comment briefly on two things. First, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) referred to the position taken by Ministers at the beginning of July; but unfortunately, I am going to disappoint him. I have received a letter dated 10 July from Lord Deighton, in response to representations that I made in June on behalf of constituents. He said:
“I hope your constituents will be able to secure banking facilities from another bank, or make alternative contractual arrangements, rather than close. I cannot oblige the banks to make facilities available. The choice of business customer is a commercial decision for banks to make.”
He simply refers to the fact that the Office of Fair Trading will examine support for small and medium-sized enterprises later in 2013.
As for the 12 August deadline, which businesses in my constituency face, I received a letter from a Mr Duale of the largest organisation that transfers money to the Somali community—other Members may have received the same letter—and it pointed out how just a few weeks after the international Somalia conference in London, when we pledged £180 million of support, the damage implied by the decisions that have been made could outweigh that increased support.
Other hon. Members have talked about the effects elsewhere. I have constituents in various organisations who are very concerned about the impact in countries all over the world. My constituent Mr Shah of Zak Money Exchange, Ilford lane says that the business could close and that eight employees would lose their jobs. He raised the same concerns that others have raised: why cannot the nationalised banks do more? Barclays may have got into trouble, and we have heard about Mexican drug barons and money laundering, but why cannot other banks do something?
Barclays’ reputational damage in this country is an issue. I suspect that many people who will be affected by what is happening will have bank accounts—their own commercial bank accounts for their small businesses, or personal accounts. It is not good for Barclays’ reputation if the perception arises among millions of British people that it has a down on the poor and on migrant communities. Barclays should consider that carefully.
As for Western Union, there is a wider issue to do with the relationship between the United States, the US authorities—perhaps in particular US jurisdictions—and their way of dealing with extraterritoriality. We have the potential through the forthcoming European Union-US negotiations, which are to do with trade and international co-operation, to exert pressure back from the European side. Britain is more significant than many European countries in such matters, but we should not ignore the potential to raise with the US authorities, at all levels, the effect of their behaviour globally on communities in the UK, in the wider European context and worldwide. That is a matter for another debate—perhaps tomorrow—but I want to highlight the need for us to be more robust about the issues.
It is true that we need to eradicate money laundering, crack down on terrorist and drug financing, and all the rest. However, an alternative to the present arrangements is that people will start to take money in suitcases through airports and smuggle it across borders, making themselves vulnerable to being taken prisoner—to hostage taking, banditry and piracy. That is a bigger global threat than some of the other problems that are cited.
I should like to comment on the point about fears of money laundering and drug dealing. People in my constituency—I do not know about other parts of the country—who use small companies to send remittances are hard-working people who earn very ordinary amounts of money. They send very ordinary amounts: £50, £100 or £150. They do not send thousands and thousands of pounds, and therefore those small businesses feel insulted that somehow they are being tarnished by the suggestion that they are laundering money.
People are right to feel that way, because it appears on the one hand that Barclays and on the other that the Government do not care. The Minister says, “This is a commercial matter and we are not going to get involved.” However, Barclays, without giving reasons to people in small money exchange firms, is simply saying, “Sorry, we are no longer prepared to deal with you.” It is not saying that those people have done anything irregular or illegal; it is saying only that the facility is no longer available. That is terrible.
In a wider context, we have been criticising the banks for their failure to support small and medium-sized enterprises; yet it seems in this context that the Government are not prepared to get off their seat and do anything to help the poorest communities globally and the people in Britain who are trying to transfer money, which, as has been said, is a larger amount than the international development assistance that is transferred from states to countries and people in the poorest countries in the world. Instead, the Government say, “This is nothing to do with us. This is simply a commercial arrangement.” I am sorry, but that is not good enough.
It is a pleasure to serve under your chairmanship, Mr Bayley. I join my hon. Friends in congratulating my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) on securing this important and very timely debate: we are coming up to a period when the clock is ticking and those who might be affected are facing the prospect of significant anxiety and a change in the circumstances. It is an incredibly important point that she and others who have participated, on a cross-party basis, have been making.
Given the realities of internationalism these days and the crises that some families can encounter, the ability for people to support their family is part and parcel of the warp and weft of much of society. The role that legitimate small and medium-sized remittance and money transfer companies play should not be ignored; it is absolutely crucial. However, it is no surprise, given what has been happening in financial services in the past couple of years, that a lot of the agenda of the anti-money laundering reforms to deal with particular concerns is beginning now to bite. As my hon. Friend the Member for Cardiff West (Kevin Brennan) commented, it is more than ironic that it tends to be the smaller firms that end up being punished most of all, when the anti-money laundering reforms that we require and some of the changes need to be made particularly by the larger organisations. They are the ones where, in my view, there is a significant risk.
My hon. Friend the Member for Ilford South (Mike Gapes) made a pertinent point in the speech preceding mine about the fact that we should not see this only as a commercial matter—we should not take a laissez-faire approach and let the market decide—because ultimately, regulators and public policy are very much part and parcel of what is happening here. It is also not only a UK question, but a global matter, which requires leadership from UK Government authorities to do something now to sort out the problem.
Of course, it is vital that strong steps be taken to deal with the risks of money laundering. Nobody is arguing against that, but we cannot turn a blind eye to the impact that crude, blanket attitudes to these issues might have on real lives and businesses. We do not want to find ourselves with perverse consequences occurring in the endeavour to solve a very real problem. As my hon. Friend the Member for Bethnal Green and Bow said, particularly in this month of Ramadan, when so many of my constituents and hers are making charitable donations—small sums of money—and sending them abroad, it is a good time to be thinking about the solution.
The points that many hon. Members have made about Somalia and Somaliland are very relevant. There is the need to ensure that this is not seen only as a Treasury concern, but as one that touches on policy questions in the Foreign and Commonwealth Office and the Department for International Development. We need to see all those branches of Government working together in co-ordination on the issue. My hon. Friend the Member for Rochdale (Simon Danczuk) made a number of strong points, particularly on the dangers of ending up with a less competitive market here, especially where fees and exchange rates would be higher for the consumer and where access to those services is potentially at risk.
I would be the last person to voice concern for some of the big banks on this one. They can and should do much more, but it would not be right simply to pin this on one banking institution, which might be at the end of a queue on this issue. However, I would like the Minister to say what conversations he has been having with Barclays bank, in particular, about the imminent decision. To me, it seems not only that a long-term problem must be resolved, but that we are facing an immediate short-term crisis. Will the Minister address the discussions with Barclays, in particular, about the grace period and the extent to which there needs to be a different time frame to the approach being taken?
We have to focus on solutions now, and it is important that we give the Minister ample time to address those, so that we can cross-examine him and scrutinise the Government’s attitude. I just want to raise a number of points with him. Does he agree that it should be incumbent on the banks, as well as the regulators, to tell the industry—those small firms—what due diligence, improvements and audit checks they feel are necessary to overcome some of the hurdles and concerns? They would be the first to want to put beyond doubt any concerns that might exist about them.
As well as the Minister saying whether he has been able to talk to Barclays, will he address the questions that go beyond the United Kingdom? Clearly, the United States has a slightly different regulatory attitude, which is impinging very much on the larger banks and Barclays in particular. Therefore, we need to know what conversations have happened so far and ought to be happening with the American regulators and with the US Treasury Department and the State Department. Can we have some co-ordination with those other authorities? We do not want to see money laundering risks any more than the Americans do, but they will also be facing their own problems internally in the United States on some of these questions, because they are also a diverse society and a diverse community. Can we align ourselves to ensure not only that we have a gold standard of anti-money laundering practices, but that we do not throw the baby out with the bathwater?
What conversations has the Minister had with the Department for International Development and the Financial Conduct Authority? The FCA is a brand-new regulator, which has been operating for several months. It has a consumer remit and a competition remit. It seems to me that the FCA needs to be firmly involved in the issue and that it may have some expertise to bring to bear.
Suggested solutions have involved guarantees from the state or some sort of underwriting. Should the state-owned banks take that on their shoulders? The Bank of England has been mentioned perhaps as a way to do that in the short term. I am a little wary about the taxpayer ending up always being the one who must bear the burden of the solution; but clearly, as my hon. Friend the Member for Bethnal Green and Bow pointed out, the issue cuts across our international aid and development policies in another bit of the Government. We do not want to see Somalia, for example, retrench in development terms because of something that has been happening in another branch of the Government. I wonder what the Minister’s attitude is to those aspects and, in particular, to whether some aid agencies might be part and parcel of a solution in the interim, until we get some of the regulatory issues ironed out.
Can we have a round-table discussion with the whole sector and particularly with small and medium-sized businesses, involving not just the regulators but the Treasury, the Department for International Development and the FCO, and can we have that quickly? We are coming up to the summer holidays, but that is no excuse. The deadline is expiring very soon, and all hon. Members will want action taken, particularly on the issues that my hon. Friends the Members for Brent North (Barry Gardiner) and for Cardiff South and Penarth (Stephen Doughty) and others have talked about in their contributions.
As I said, I want to give the Minister time to respond, so that we can question him on policy. In summary, this cannot just be left as a commercial decision. We cannot say, “We are walking away from this. We don’t care about it. This is just one company making a particular call on this matter.” It is not just a market question. There is a downstream consequence from public policy, and it is therefore incumbent on us to get public policy right—to go the extra mile and ensure that we spend the time and effort necessary to find a solution. I just do not believe that having strong anti-money laundering policies is anathema to having proper facilities for diaspora communities to provide decent family support on an international basis. That is the sort of society that we need to support at this time.
I am grateful for this opportunity to speak under your chairmanship, Mr Bayley. I, too, add my thanks and congratulations to the hon. Member for Bethnal Green and Bow (Rushanara Ali) for securing this important debate. We have had a number of discussions on this issue already, and I look forward to continuing to have those discussions with her. I know that this is a very important issue for her and for all of us in this Chamber and beyond, and I welcome this opportunity to respond.
This issue is of concern to Ministers across Government and to hon. Members on both sides of the House, because a healthy, functioning remittance sector is crucial for the thousands of our constituents up and down the country who use such services to send money abroad. If you will allow me, Mr Bayley, I would like to speak for a moment about my gran. My gran—my mother’s mother—has been receiving remittances regularly for more than 50 years, since my parents first arrived in our great country and settled, first, in Rochdale. She continues to receive the benefit of remittances. When I first visited her while I was growing up, one of the things that I noticed was that she lives in a very remote village in Pakistan that has no bank. I think that the nearest bank is at least 10 miles away. She is unbanked. There were only a few remitters, at least to begin with, many years ago, that could get money to my gran. I mention that only to show that, at a very personal level, I do understand this issue and how important it is in Britain and particularly to British individuals such as myself, who are from an ethnic minority background.
The sector plays a crucial role in supporting the economies of all the developing countries that have been mentioned today that receive these funds. We all want to see a healthy remittance sector, but we also want to see a legitimate remittance sector. Our banks and regulators have a real responsibility to ensure that they are not inadvertently facilitating any kind of criminal activity. That could be money laundering, drug trafficking or the financing of terrorism, some of which we have heard about today. All are activities that pose real threats not just to UK citizens, but to global security. Of course, there is a fine balance to be struck between managing those risks and ensuring that essential services are still available to families in the UK. I would like to reassure hon. Members that we are committed to getting the balance right. This afternoon, I will set out some of the steps that this Government are taking towards ensuring a robust and sustainable remittance sector.
We recognise the role of Government in effectively supervising and regulating the money service business sector to help to drive up standards in this area. Last year, we strengthened the Money Laundering Regulations 2007, with a particular view to helping Her Majesty’s Revenue and Customs, as the relevant regulator, to strengthen its supervision, and HMRC is making every attempt to close down those businesses that are engaging in criminal activity and tarnishing the sector as a whole. Last month, it worked closely with the Metropolitan police and the Serious Organised Crime Agency to target organised criminals operating in this sector. However, in the longer term, proactive solutions must be found to avoid the need for such action in the future. The best way to achieve that is by creating a remittance sector in the UK that is trusted by all stakeholders and with which all banks can feel confident about doing business.
I have spoken with several of the leading high street banks—including, of course, Barclays—during the last few days. Some have expressed important concerns on the structural features of the sector and particularly on the issues surrounding transparency. I can confirm that I am looking urgently into what measures the Government might be able to take, and speaking to all relevant authorities to look at what options are open to us to try to allay as far as possible some of the concerns that those banks have expressed.
Separately, work has already been under way for some time through Project Quaver, led by HMRC and SOCA, on developing a healthy and sustainable sector. That project brings together the Government, law enforcement, regulators and industry to help banks and money service businesses to understand the risks that come from abuse of this sector, and to strengthen their compliance.
However, we recognise that having effective anti-money laundering and counter-terrorist financing procedures in place is not only essential to preventing, detecting and disrupting illicit finance. They provide the confidence for foreign investment and stable economic growth in many of the developing countries that have been mentioned. Developing effective regimes requires effective co-operation between the public sector and the private sector to understand and mitigate the threat of illicit finance, so under the UK presidency, the G8 has this year committed to launch a public-private sector dialogue on illicit finance, which will be held in Namibia in September of this year. That will not only help to tackle the issue of robust regimes in the traditional financial sectors, but address the opportunities and the risks posed by new payment methods, such as mobile money services. By bringing together private sector experts from around the world and Ministers and officials, the dialogue will be a unique opportunity to leverage expertise and drive reform that meets the specific needs that countries face, particularly in sub-Saharan Africa.
I thank the Minister for being very generous about interventions. Again, I am very interested to hear what is going on at international level—dialogues and so on at the G8—but, echoing the comments of my hon. Friend the Member for Cardiff West (Kevin Brennan), we want to know what will happen in the next couple of weeks, given what is happening on 12 August. I do not want to betray any confidences, but Barclays was offering a meeting at its headquarters. Will we see a meeting of the key stakeholders—the banks, the non-governmental organisations and the diaspora communities—in the next fortnight?
I think that both hon. Gentlemen knew that I was coming to this issue next. I am referring to the immediate effect of Barclays’ decision. I recognise that some of the things that I mentioned a moment ago, although very welcome, are long-term projects. In the short term, the Government are committed to doing everything that they can to minimise the impact on individuals and businesses in the UK of any immediate changes in this market. I understand that businesses in this sector will face challenges. That is why we are committed to working with the banks, trade associations and money service businesses to try to find solutions that do not mean extensive business closures. However, the truth is that we do not know what the full impact of some of the decisions that have been discussed here today will be. We are monitoring the situation and will continue to do so in the course of the next few months.
I am extremely grateful to the Minister for giving way; he is being very generous. In terms of immediacy, does he not agree with this point? My constituent George Boateng has contacted me to say that an entire parallel industry—the so-called hawala system—exists now and is totally and utterly unregulated, and we could end up with a situation in which we have a sort of reverse Gresham’s law: we end up losing money transfer that is legitimate and regulated and going into a completely unregulated system. Surely that cannot be anyone’s intention.
The hon. Gentleman raises a fair point. He is correct, to the extent that if individuals cannot find a legitimate alternative that can reach the parts of countries they want to reach at a reasonable cost, they may be tempted to use illegitimate means, which makes the issue all the more important. I accept his general point.
We are committed to ensuring that commercial decisions taken by banks do not inhibit individuals in the UK from remitting money to families abroad, but, once again, there may be challenges. Individuals might need to approach firms other than those with which they are used to dealing. There may be increased charges. Remittance flows to some countries may be affected, specifically those with less developed or non-existent banking sectors, such as Somalia, as we heard from the hon. Member for Cardiff South and Penarth. I share his concern.
I was encouraged to hear the Minister’s reference to his personal experience—his family experience —but I am disappointed at the lack of focus in his response on the fact that we need an urgent solution. I appreciated his time before the debate thinking through a constructive way forward. I hope that he will use the last 10 minutes to talk about how he will get his officials, the FCA and interested parties to use their insights to look at how we can solve the problem. He would be commended for making that happen. Across Government —in DFID as well as in the Foreign Office and his Department—and in his party and my party, there are grave concerns, which have been expressed in the debate. I hope he will use the last 10 minutes to focus on action and delivery, because he will be commended for that.
The hon. Lady is absolutely right to set that challenge and say that we should focus on action and delivery, and that is what I believe we are doing. I am sure she understands that there is no magic bullet or overnight solution that can be provided by any Government. As we heard today, this is a complex matter. The hon. Member for Nottingham East (Chris Leslie) recognised in his remarks that the banks have legitimate concerns. Other regulatory authorities are involved and hon. Members have mentioned the United States. Whatever the solutions, they may not be perfect and we may not get back to the world as it was before in this space. There will probably be changes to the structure of the industry. I hope she will be reassured, as I make further remarks, that we take the issue seriously.
The hon. Lady mentioned DFID, which I was coming to. I have discussed the recent bank actions with DFID officials and my right hon. Friend the Secretary of State for International Development. Initial indications do not suggest a significant impact on the economies of developing countries or their humanitarian situation. The Government will however assess the impact of market restructuring on developing countries and work with private sector and aid partners to mitigate any negative repercussions. The Secretary of State confirmed that the provision of UK Government aid will not be affected. My hon. Friend the Member for North West Norfolk (Mr Bellingham), who has great experience in development, talked about the work of DFID. It has said that it will commission an independent research report to understand the impacts of the recent bank actions on development outcomes in recipient countries.
I thank the Minister for being generous. Can he explain what evidence DFID used to come to that conclusion? I have not been given any evidence, nor have my hon. Friends or other hon. Members. DFID should be looking at how to improve this important industry, because we want to end aid dependency. It is scandalous that DFID is being so complacent and commissioning a research project, when businesses will go bust in the next month. Will he press DFID to take urgent action with him? I accept that there are no magic wands, but there have been constructive suggestions in the debate, which I ask him to take forward and lead on. He will be commended for coming up with a solution.
I will come to that point before I finish, but, given the questions asked today, let me say a few words about Barclays.
When I met Antony Jenkins, Barclays chief executive, we discussed its recent decision to end its relationship with a number of money services businesses in the UK and I tried better to understand its perspective. Although we did not discuss decisions taken on individual firms, I was reassured to understand that the recent review of its customers in the sector is being conducted on a case-by-case basis. I was also reassured that it is working with firms to manage the impact of its decision. He confirmed that Barclays will consider on a case-by-case basis extensions to any initial notice period it has given companies, particularly where those companies can show that they are in active discussions with other banks that may take their business.
Without wishing to betray any confidence that Barclays relayed at the meeting with me and my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), it is clear that it has decided not to continue to do business with certain remittance companies, and, despite what the Minister has said about the assurances he received from the chief executive, that was made very clear to us in the meeting. The matter is much more urgent that the Minister is acknowledging.
I take those points on board. The hon. Gentleman is right to suggest that Barclays has made the decision. It is however showing flexibility over the timing of closing certain accounts, and that flexibility is better than no flexibility.
I shall turn to a few questions raised by hon. Members. The hon. Member for Bethnal Green and Bow asked whether I had received representations from the large money transfer companies. I have not received any representations from such companies. She also suggested—if I understood her correctly—that the banks’ behaviour could be anti-competitive. There is no evidence that banks are acting in concert or are distorting competition. They appear to have acted in accordance with their commercial interests and their desire to minimise risk.
The hon. Member for Rochdale (Simon Danczuk) asked why larger organisations, such as Western Union, are not affected by the decisions of the banks and whether the banks would benefit from the withdrawal of some services. The short answer to why some larger institutions are not affected is that their internal compliance procedures are in many cases similar to what the banks themselves adopt internally; in many cases, they spend more resources on compliance and transparency issues, which they are clearly in a better position to afford than smaller operators; and in many cases they are regulated differently. All companies are supervised by HMRC, but there is a difference between a company registered with the FCA and one fully authorised with it, and banks take that into account.
The hon. Member for Rochdale and others, including the hon. Member for Nottingham East, asked whether we were having discussions with the US. We work closely with the US Treasury and State Department at all times on all regulatory matters, including money transfer. It is important to point out that since many transfers are ultimately in US dollars, there is a US interest. Lastly, I asked the British Bankers Association for a round-table meeting and it has agreed. We will have one, the Government will of course take part and I look forward to it.
UK Energy Infrastructure (Wales)
It is a pleasure to serve under your chairpersonship, Mr Bayley, as I know that you are a green Chair in a green chair. In this debate, I will talk about Wales’s contribution to UK energy, and the development thereof.
Wales currently produces about 22,000 GWh of energy a year and consumes about 18,000 GW. We export approximately 4,000 GWh to England, but that figure is due to grow because of the abundant opportunities provided by the sea and the wind, and by solar energy. Essentially, I want to discuss the need to have the right balance between green energy and green tourism, with future tourism and economic opportunities paying due respect to our seascape and landscape.
The global population is growing, from something like 6 billion to 9 billion, and we are therefore not in control of the environment beyond our immediate physical surroundings. The size of the middle class in China, for instance, has grown from 2% to 20% of the population in the past 10 years, and more people from developing nations are travelling. Opportunities for green tourism in places such as Wales, which has a relatively sparse population, are therefore enormous and need to be borne in mind, as do opportunities in the creative industries. “Da Vinci’s Demons” is filmed at the old Fabian way site in my area. Our landscapes lend themselves to extraordinary Hollywood-type productions. We need a balance.
There are opportunities for nuclear development in Anglesey to produce another 34 GWh, which would be an increase of 150% in Wales’s total energy production and should justify further investment in Wales. We do not get our fair share of investment: some 80% of current infrastructure investment plans and 90% of transport plans are for London and the south-east. I know that hon. Members are interested in freight, for instance, and there is a case for investment in that.
Uskmouth power station in my constituency, which is one of the oldest power stations, is having huge problems getting rail freight capacity—it is difficult for rail freight companies to invest in the future—which is causing problems locally and increasing the costs to the power station’s operators. Does my hon. Friend agree that the Government should consider that further?
I completely agree. The big political debate is the balance between growth and cuts to get down the deficit, and we need to focus on growth, which means investment in infrastructure. We need to get the right gauges for freight—from Milford Haven, Swansea, Cardiff or Newport—and we need to move around universal freight modules, which are ship-carried in many instances, and energy from power stations, as my hon. Friend mentioned. There is a case for investment now, given the expected future income from new energy sources in Wales. There has been some discussion of a barrage that might generate up to 16,500 GWh, which would be 5% of UK energy, but the idea has clearly been kicked into touch, partly by the European habitats directive.
Meanwhile, the Swansea Lagoon is a big issue in the local press. It could generate some 400 GWh, which would be 0.1% of UK consumption and 2% of what the barrage could produce. That is a relatively small level of production, but it is big scheme in that it would take £650 million to build, with its footprint extending from Swansea docks halfway to Mumbles pier. The electricity produced would be enough for about 121,000 households, but it would be for the UK grid and not for Swansea itself, which has about that many households. I am concerned, therefore, that on balance the development is at least neutral in tourism terms. We hope to become the UK city of culture in 2017—we are on the shortlist of four—and next year we celebrate the 100th anniversary of Dylan Thomas’s birth. We have high hopes for prosperity from cultural tourism in the emerging Swansea Bay city region, so preserving our iconic view is enormously important to us locally.
I thank my near namesake for allowing me to intervene. He focuses on tourism, and green tourism is a hugely important part of the economy in my constituency. At the moment, we face six wind farm applications without any knowledge of how the infrastructure will take the power out. If the mad scheme goes ahead, it will be absolutely crucial that the infrastructure is undergrounded, and that will not happen without Government pressure. It is vital that the whole line be undergrounded, because of the damage it would do to the economy.
The hon. Gentleman makes the point well that there needs to be a balance between the value of the electricity and the prospective value of the tourism. Aerial views show that England is relatively densely populated and Wales relatively sparsely, and that will be a key asset for our environmental tourism. We want to think strategically, therefore, about where our energy production is. With wind, there needs to be access up the Severn estuary to the grid at Hinkley Point or Port Talbot, but there is less of a case for pylons right into the centre of Wales. I respect the fact that some of these issues are devolved, but we need a balance because we are talking about a once-and-for-all change to our views and to the value of our tourism. Once the infrastructure goes up it will not be pulled down, so we need carefully to consider the pros and the cons.
My hon. Friend makes the point that Wales is not as densely populated as England, but it has a growing number of energy sources, from the energy island of Anglesey in the north right down to the south. There are large projects and smaller community ones, with a growing number of solar panels. Does my hon. Friend share my concern that the grid infrastructure must be of sufficient capacity to cope with that, and to ensure not only that people can feed in the energy from their solar panels but that the energy, which will be generated in Wales, is fed in properly to the national grid system in the most efficient and cost-effective way?
Yes, I certainly agree. My understanding is that Wales produces about 27,300 GWh of energy, but that nets down to about 22,000 GWh because of inefficiencies in transmission. The issue of energy loss is very important. We need to run a sophisticated and effective network, which pays due regard to environmental impacts and therefore to the economic impacts on tourism. I am not putting to one side the important subjective impacts on people’s everyday quality of life, but there are also quantifiable economic impacts.
Coming back to the Swansea Lagoon, the Minister might want to comment on whether an evaluation of the impacts on tourism has been done. The construction phase would create discontinuity for retail and tourism. If the sea bed was dug up—which it would be—to provide some of the material for the wall, would that generate a lot of contamination from industrial waste brought up with it? Is the visual impact shown on the promotional literature accurate or slightly misleading?
Is the Minister comfortable with the fact that there is an opportunity now for local investors to put down a £800 stake and get £3,800 back if planning permission is granted? That means that local opinion makers, such as me, are under a lot of pressure from people who have put the £800 down. All the risks are taken by local people. There are fears that when the tide went down there would be an unsightly view which would block the iconic view from the town centre, Town Hill and the Uplands. In addition, given that in future years we want to pursue the idea of a Dylan Thomas festival on a scale more akin to that of Hay, there is a question as to whether the perimeter of the construction—its footprint is nearly as big as Cardiff—would impede future cruise-borne tourism in Swansea bay.
There are therefore several questions—I do not know whether the Minister has any preliminary answers—about the environmental and economic impact, and the trajectory of the short-term problems and of where we will end up if we want a more strategic development of the bay front and then have a lagoon. It may work out well, but those are important questions.
I also want to touch on the Atlantic Array, which, as hon. Members may know, is a bold and imaginative opportunity to have wind turbines offshore. They would be about 12 km offshore, but the National Trust has told me that the Germans normally want them 35 km offshore, so that is an issue. This may sound strange, but, importantly, the biggest harbour porpoise population in Britain is in that vicinity; one of a similar size is in Cardigan bay. Apart from not wanting to disturb that habitat, there is a question mark in relation to future environmental tourism over whether that habitat might be so disturbed by the erection of pylons that those breeding grounds move for ever. I want to make it clear that, in principle, I am in favour of such developments offshore.
I apologise for missing the start of the hon. Gentleman’s speech. What consideration has he given to other marine turbine technologies? I spent a very happy morning with the hon. Member for Llanelli (Nia Griffith) in a boat on the Severn estuary off the north Devon coast, and there is an imaginative scheme for marine turbines in the Severn estuary that would alleviate some—not all—of the concerns that he has voiced, particularly the environmental ones.
I am sorry that I could not be in that very boat. We should of course look imaginatively at all opportunities. I think that the hon. Gentleman was talking about underwater marine turbines, which are certainly enormously important. In the Severn estuary, which is virtually the biggest of its sort in the world—the bore is enormous—the whole idea of a barrage is predicated on such turbines, rather than on ones driven by the tide coming in and out, which is the case in the lagoon. We should certainly look at that in the future.
Solar energy has been mentioned. If the technology was there, I would like public sector buildings across the country to be tiled with solar panels to provide a solar footprint for the future, although the numbers must add up, because people can get such things wrong. The Chinese invested a lot in solar, but suddenly found that their technology had become obsolete.
There are therefore many opportunities, and I think that it would be best to give the Minister time to respond to some of the ideas and possibly to take some interventions as well.
I welcome you to the Chair, Mr Bayley. I congratulate the hon. Member for Swansea West (Geraint Davies) on raising the issues. Balancing the impacts of energy infrastructure against the benefits is a key consideration for the planning system, so I welcome the opportunity to talk about energy infrastructure in Wales.
Wales has an essential role to play in meeting our energy needs. We are committed to putting frameworks in place to ensure that the much-needed investment in infrastructure takes place, which is key to getting our economy moving in the short term. The energy sector has the biggest infrastructure programme in the UK, and many such projects are ready to start. It has been estimated that replacing and upgrading our electricity infrastructure alone will require about £110 billion of capital investment in the decade to 2020, supporting up to 250,000 jobs up and down the supply chain. That is half the total infrastructure investment pipeline in the UK, and nearly double the amount needed for transport.
Wales already plays a significant part in powering the United Kingdom, and is home to a range of vital energy infrastructure across the different energy sectors. It is a net exporter of energy, which helps to meet energy demand across the UK. The most recent figures—for 2011—show that it exported 13% of electricity generation to the rest of Great Britain, and it has been even higher in recent years. Since July 2012, Wales has also been a net exporter of electricity to the Republic of Ireland, via the east-west interconnector.
Wales also plays a central role in ensuring that our gas needs are met. It is home to one of our main liquefied natural gas import facilities in Milford Haven, and LNG is an increasingly important part of our energy mix. The terminal has the capacity to import nearly 29 billion cubic metres of gas a year, which is nearly a quarter of our total gas import infrastructure. The facilities there cost upwards of £1 billion, so major global energy players—such as Qatargas, Exxon Mobil and BG Group—have clearly recognised the great benefits of investing in Wales. That decades-long relationship will continue to benefit Wales and thus the rest of the UK.
The Minister is making the case that the net export of energy to the UK from Wales will grow. At a time when austerity measures are hitting Wales more than elsewhere, including because it has more public servants and more people on benefits, is there a case for Wales to have, instead of cuts, a greater proportion of investment in infrastructure to build growth to get down the deficit? As we make a growing contribution towards the UK pot, there is a case to be made for more investment, whether in freight railway lines or other infrastructure, to help give people the tools to provide growth and jobs.
I was in fact coming to exactly that point. Wales will benefit, and to some extent already benefits, from the steps we are taking to ensure the investment in infrastructure that we need. We are committed to providing the certainty that industry wants and to ensuring that the UK, including Wales, is one of the best places in the world to invest in low-carbon electricity generation. Our electricity market reforms are critical to that. As we know, a large proportion of our existing capacity—the equivalent of about 18 large power stations—has to close by the end of the decade. At the same time, we may need as much as double today’s electricity capacity by 2050 to deal with growing demand from the electrification of transport, heating and industry.
To meet our legally binding carbon targets, significant new electricity generating capacity will be needed by 2030, most of which has to come from low-carbon technologies, such as nuclear, renewables and fossil fuels with carbon capture and storage. By 2050, emissions from the power sector must be close to zero. The reforms that we are delivering through the Energy Bill and electricity market reform will be the biggest change to the market since privatisation and will transform the sector.
I am pleased to say that today, as planned, we have published the draft delivery plan that sets out the detail of how the Government will drive investment in low-carbon technology while securing electricity supplies at lower cost to consumers. Electricity market reform is now at the implementation stage in preparation for its introduction next year.
The challenge now is to unlock the investment, and I believe that Wales is well placed to do so. We have already seen success in Wales. Since 2010, my Department has granted consent to five major energy infrastructure projects there, covering a wide range of types of infrastructure, including onshore wind farms, biomass plants, and tidal and gas generation. In total, the projects already given consent alone can provide a generating capacity of about 1.5 GW, which is enough to power more 1.5 million homes. Many more projects are in the pipeline: developers in Wales have registered an interest with the Planning Inspectorate in relation to bringing forward 17 more major projects that all have the potential to lead to significant jobs and investment there, as well as to increasing our energy security and reducing carbon emissions.
The one part of the thinking about which I have not so far heard from the Minister is local opinion. There was a recent statement on the impact of local opinion on the Government’s view about smaller wind farms. In mid-Wales, we face a large number of very big wind farms. In general, does the Minister feel that local opinion should have a key place in the consideration of larger wind farms in Wales?
My hon. Friend knows that I cannot comment on individual applications or on those in his constituency, but the whole intent of our recent statement was to secure a greater degree of involvement for local communities through their being consulted before the submission of applications and having the ability to take into account wider considerations, such as visibility or the visual impact and the cumulative impact of successive applications in one locality. I hope that that will do something to redress the balance between developers and communities.
The Minister mentions the large number of projects in the pipeline. Whenever I have asked whether the Department of Energy and Climate Change has any central records of the number of biomass applications, I am always told that only local authorities know about the applications. It concerns me that we may be reaching a situation in which we are no longer able to supply our biomass plants from local sources, which I find acceptable, and that we end up importing from much less acceptable sources, which may be deforesting the world. Can his Department set up a register so that we have some idea about where we are running to in the future, otherwise we may find that we have biomass plants that can be sourced only from unacceptable sources, which would be a bad place to be?
That is an important issue, and one that I have been discussing recently with the domestic wood industry, especially the wood panel industry. I am aware that the Scottish Government require of a biomass plant a plan that shows exactly how sustainable the feedstock is likely to be. If I may, I should like to reply to the hon. Lady in writing, after a little more thought.
As I was saying, Wales is now seeing huge investment in its renewable energy infrastructure. Wales already accounts for around 6% of overall UK renewables. Since 2010, £1.3 billion of investment has been announced in renewable generation in Wales, potentially supporting around 2,000 jobs.
Just last week, the Secretary of State visited the site of the Pen-y-Cymoedd wind farm in south Wales, which is set to be the largest onshore wind farm in Wales and England. The announcement from Vattenfall that construction is to commence on the 76 turbines on the site in 2014, with the first power being generated for the National Grid in late 2016, is welcome news. That project alone represents more than £400 million of investment, creating around 300 jobs, and providing power to 140,000 homes. Furthermore, Vattenfall has confirmed that it will also invest £1.8 million every year in community funds for the 25-year life of the wind farm, ensuring wider benefits for local people.
This is also an exciting time for nuclear new build here in the UK. We were delighted to welcome Hitachi to the new nuclear market in Britain last October, with its purchase of Horizon Nuclear Power. Hitachi brings with it significant experience of building reactors and it holds an excellent track record for building on time and to budget. The first site it is planning to develop in the United Kingdom is Wylfa on Anglesey.
Hitachi is keen to develop its long-standing programme of industrial development in Wales. Horizon held successful supply chain events in Llandudno in May and in Gloucester, which I attended, which attracted some 400 business representatives. Hitachi’s entry to the new nuclear market shows just what a highly attractive proposition new nuclear is and reflects the strength of the Horizon project. I want to assure hon. Members that the Government are firmly committed to ensuring that new nuclear goes ahead in the UK and that all parts of the UK will benefit from it.
Yes, I am happy to do so. We are now accelerating the pace of shale gas exploration by putting in place a robust regulatory framework, and ensuring that where shale is hosted by a local community, that local community benefits, just as it benefits from onshore wind farms and as it will do from nuclear stations. The Chancellor has also announced fiscal measures to incentivise the expensive early years of exploration. My right hon. Friend the Secretary of State for Communities and Local Government will be setting out some amended planning guidance so that both developers and local communities that want to consider their applications will be clearer about how the applications are to be handled. We want to make sure that we do not miss out on the potential of shale gas.
Last month, we published the first authoritative estimate of the amount of shale lying underneath the northern basin—the Bowland-Hodder basin covering the northern counties of Lancashire, Cheshire, Yorkshire and so on. We now have a similar study going on in the south of England. Eventually we need to start mapping the resource right across the United Kingdom.
Finally, I can say that I have authorised a new 14th onshore licensing round, which is in preparation at the moment and will commence next year. Again, that should provide opportunities right across the United Kingdom to check and tap the potential of this resource. It is only potential at the moment; we do not yet know whether shale gas is recoverable as cost-effectively and as easily as it is in the United States. We know that the shale here appears to be thicker, so potentially there is a lot of gas that could be extracted and that could make a real difference to our economy. We also know that given the increasing volatility of international oil and gas prices, we have to do more to secure our energy supplies here at home by encouraging a stronger mix of energy from different sources, whether it is wind, other renewables, nuclear, other gas or shale gas.
I am certainly prepared to look at that.
In conclusion, with the framework for investment in place, the energy legislation in front of the House and the details of electricity and market reform being published in greater detail and in draft, we now need to get investment flowing. That is the challenge over the coming years. If we can get investment in a new efficient, low-carbon and diverse energy mix, the jobs and growth that we all want to see will follow. Based on the evidence to date, and the points I have been making, I am confident that Wales is up to the challenge. It is already seeing deployment on the ground, and it is well placed to take advantage of the new investment that we need.
In further conclusion, let me just say—I am sorry not to be more helpful—that I am aware of the proposal from Tidal Lagoon Power to develop a bay tidal lagoon in Swansea. My officials have met the developers concerned, but because the project is now at the pre-application stage in the consent process of the Planning Act 2008, I am not able to offer from here any particular comment on the merits or otherwise of the proposal, but I look forward to the outcome of the planning process with interest.
Surrey County Council and Adoption
I am raising the anonymous case of a small group of parents—potentially—who started an adoption procedure with Surrey county council at the same time. I am not happy with the procedure, and nor are the individual set of parents whom I will talk about. I must say at the beginning that I am very supportive of the Government’s moves to speed up and sort out the adoption procedures. Perhaps they ought to be grabbing Surrey county council by the back of the neck and shaking it.
This case—the one I am choosing to talk about—involves a married couple in my constituency. They are professional people, they own their own home in a small village in the constituency and they are near an excellent primary school, which feeds one of the best secondary schools. The mother has become a full-time mum for the two little sisters they have adopted. Put bluntly, after an appalling start in life things are looking good for those two little girls.
The adoptive parents expressed an interest in adopting to Surrey county council at an adoption meeting in November 2010. They submitted a formal application. A meeting was held with a social worker in January 2011. Prior to approval to progress, the couple attended an initial four-day training course in 2011 with seven other couples. So we are talking about eight couples, potentially—this is not a single-couple case.
On the fourth day of the four-day training course, the couple I am talking about were shown details of some children who were available for adoption. However, it soon became apparent that Surrey county council should not have done that, as its procedures had another eight months to run before approval. My constituents—this couple—looked at the list of children’s details in late March 2011, as produced by Surrey county council, and were attracted towards adopting two young sisters. One was aged five, going on six, and the other was aged two, going on three. At that stage, the two little girls had been in care for two years. On that final day of the training course, all the couples were told that Surrey county council would fast-track an application, as we would wish, if a suitable match was identified during the preparation for adoption. However, in my opinion, or at least in the opinion of the couple, Surrey county council seemed incapable of speeding up any progress at all. In fact, looking at the case in retrospect, the council did the opposite.
At the end of the first stage, the couple were assigned a social worker to take them through the preparation stage; that was in late March 2011. They first met their assigned social worker at the start of May 2011—two months’ delay. By early summer, the couple had started to express serious interest in adopting the two little girls, having seen their child permanence reports and later a short DVD of the children. As a result of that, the social worker agreed to start to run the adoption approval process, so as to approve the couple as adopters. It was agreed that the matching panel process would run in parallel. In October 2011, six months later, the couple met the children’s social worker for the first time, and reconfirmed their wish to proceed to adopt these two little girls, so that the processes could continue in parallel. At that stage, there seemed to be mutual agreement that, given the girls’ age and the length of time they had spent in care, the process should be moved quickly.
The adoption panel was set for early November 2011—12 months’ delay. The matching panel was expected to take place in late November 2011, but no date was set. The couple were deeply concerned that, at that time, their social worker had still not interviewed the required three referees from the six who had written reports about them as potential adoptive parents. In October 2011, as the distance between the meetings got longer, the social worker realised that she could not complete the work in the time required and the adoption panel meeting was slid back another 10 days.
After 14 separate daytime meetings, each one lasting between two and three hours, the social worker prepared a report and took the potential parents and the report to the panel in late November 2011. Appallingly, the panel decided that there were some basic deficiencies in the report. For example, the social worker was required to interview three referees but she had only interviewed two and, to make matters worse, still presented the report.
The panel therefore felt that it had to defer the case. To make matters even worse, the panel felt that, among other things, the social worker’s report contained too many references to the specific children—the two girls—instead of fictitious ones, which apparently was the normal procedure. Again, that was a Surrey county council problem.
As a result of that, the panel was apparently not confident that the couple were a suitable match, but that was entirely based on the inadequate report, and so we went backwards. As I am sure the Minister will understand, the adoptive couple were slightly upset—to put it mildly—as the panel was supposed to be judging their suitability as generic adopters, but in fact the couple had been led down the road of considering specific individual girls.
Things got worse. First, the social worker went off sick with stress and disappeared for nine months. A week after the social worker went off sick, the couple met the social worker’s manager, who apologised for the inadequate report. I find that somewhat strange, because the manager is ultimately responsible for the report before it is progressed with. However, the manager did not appear to notice that.
The couple were told to drop the match prospects with the two little girls, which was very upsetting. There were three further meetings with the manager, written submissions from the couple and so on. The matter proceeded on, so that the panel decision was brought forward to late January 2012 and was positive.
I find it extraordinary, but at that stage the couple had difficulty persuading the manager working with them that it was appropriate for them to adopt siblings. The couple were assigned a new social worker and told to look for a new potential match. In March 2012, they discovered from other potential adopters that the two little girls—
Sitting suspended for a Division in the House.
I will scurry, Mr Bayley.
In March 2012, the adoptive couple discovered that their potential adoptees—the two little girls—were still on the list for adoption. They had been offered to other potential adopters but not accepted, for some reason. On that understanding, the couple approached the manager. They were told by the manager, once again, to forget the match and move on, even though Surrey county council had no alternative options for the children. Thanks to delays, at this stage the eldest girl was now nearly seven. At no time during the process were my constituents ever informed why they may or may not have been an unsuitable match.
In April 2012, my constituents ran out of patience with Surrey county council. They discovered, through Adoption UK, that there was an adoption exchange day in London, where a large number of adoptive agencies were present with the profiles of children for adoption. They discovered that it would be helpful to bring along a short biography to give out. This they prepared themselves, only to discover on arrival at the event that it should have been prepared with the assistance of Surrey county council. They still attended. Different Surrey county council staff were present, to whom they explained this long difficulty. They were assured that the staff were somewhat appalled.
Fortunately, on a Friday evening in April, the same manager—the one who had been there all along and who originally took them through the adoption panel—rang to say that she had had further discussions with colleagues. She said that Surrey county council now supported placing the two youngsters with them. The next matching panel took place in June 2012, which was a further delay of two months. Introductions were to commence in early July, but there was another two-week delay. To save the Minister the arithmetic, that was some 16 months after the first possible approach, after having first seen the details of the little girls. The two sisters latterly moved in with the adoptive parents, because of success, in August 2012. By this stage, the two girls had been in care for more than three years and had lived with two sets of foster carers.
Bad though that is, there is more. First, there was a shambolic lack of clarity over the contact arrangements with the birth parents. In broad summary, there were two differing opinions from two social workers. One social worker wanted up to six contacts a year for the birth parents with the girls, the other wanted no contact. Decisions were made, undone and remade. Confusion and upset reigned for the wee girls, for the adopting parents and for the birth mother. The final decision was no contact, which was backed by the court but opposed by the birth mother.
Surrey social workers decided at this stage that they needed to support the new combined family once the children had moved in with their adoptive parents-to-be. In September, the two girls were about to start at their new school. The elder of the sisters was going through a difficult settling-in stage. In its wisdom, children’s services decided that the mother would need more help, which was accepted. A social worker was allocated to the new family on a weekly basis, after school. She was, I understand, young and clearly inexperienced. Whatever advice was sought, or when changes were suggested in the strategy for caring for the children, she had to rush back to the manager, again, and return with the advice the following week. This support was so pathetic and inadequate that, by mutual consent, these support arrangements were shelved.
In addition to this inadequate support, the adoptive mother received visits every three weeks from the children’s social worker and from the parents’ own social worker—not together, but separately. The two social workers did not agree with each other’s approach. This, of course, made life challenging and every visit from the children’s social worker resulted in a period of unsettled behaviour from the children, who blamed the adoptive mother for the move. Fortunately, Surrey did something right. It bought in SafeBase, an external specialist organisation, which supported and helped the parents.
In January 2013, when the children were quite settled—they had got through their first Christmas with their new parents and the adoption process was about to begin—for some unknown reason, the children’s social worker decided that she needed to start visiting once a week to work on the children’s life story books. Why she needed to do this in conjunction, and in close proximity, with the children, I cannot fathom, and the timing was bad. Of course, predictably, that weekly visit, including pulling information together for the life story, had the immediate effect of unsettling the children yet again, as the social worker raked up their past on a weekly basis. That persisted for more than a month, until the social worker was signed off sick with a broken wrist—so they could not inflict other visits. The frequency of visits reduced and a semblance of normality started to return, and there was progress through to what one would consider proper normality.
To add to the problems, the children’s social worker delayed the commencement of the court process for the adoption by almost four weeks, by failing to provide the parents with the address of the birth parents. This was only resolved by going back to the manager again. To further aggravate the situation, the first court hearing was adjourned because the judge was not satisfied that adequate efforts had been made by Surrey county council to contact the birth parents, and he delayed the adoption by another six weeks.
In the middle of all that, the children were told about the contradiction of the contact with their birth parents. That was done by the children’s social worker in March 2013. I understand that it went through well.
The children are now adopted and in the home. I have met them, although the children do not realise it. It is understandable that Surrey county council children’s services department was concerned about how the parents would cope with the demands, but it seemed to make it worse at every stage. The adoption is now complete, and I should like the procedures that Surrey county council went through to be looked at, preferably independently, by somebody outside, if the Minister—if he acts—can persuade Surrey county council of that.
I have had dealings with Surrey county council’s social services in the past, and it was like banging my head on a brick wall. It shelters behind data protection, and progress is zero. A group of potential parents came together in November 2010, and I hope they can have their cases briefly looked at as a paper exercise and that the individual parents can then be interviewed, because if social services continue as they have been in Surrey, we are doomed when it comes to helping those children.
The children are now in what I know is a happy home. I wish them all the very best, but I must warn the parents, as a parent with adult children: just wait till those wee girls are teenagers. Then the fun starts.
It is a pleasure to serve under your chairmanship, Mr Bayley. I congratulate my hon. Friend the Member for Mole Valley (Sir Paul Beresford) on securing this important debate. I know from his contributions to the Commons stages of the Children and Families Bill that he shares my determination to speed up and improve the adoption system from start to finish.
It is a shame that this debate has come about because of the catalogue of distressing experiences that my hon. Friend’s constituents have had with Surrey’s adoption service. It is pleasing to hear that, despite those problems, his constituents have persevered and are now the proud parents of two little girls who now have the stable, loving family home that they so desperately needed. I am sure that he will understand that I am unable to comment or intervene on an individual case—such cases are always best dealt with locally, where the circumstances are well known. I can assure him, however, that if his constituents want to provide my officials with permission, I am more than happy to write to the chief executive of Surrey county council to inquire about whether the director of children’s services is aware of their concerns and has any plans to consider them formally in the way that he suggests.
I can very much relate to the many challenges and joys of adoption and the care system that my hon. Friend describes. As he knows, I have two adoptive brothers who are among the more than 80 children, many from incredibly difficult backgrounds, that my family have fostered over 30 years. That clearly was not always easy, but I came to treasure seeing how love, stability and routine helped my brothers lay down roots, grow and eventually thrive. I know first hand just how life changing adoption can be.
We know that the permanency of adoption provides vulnerable children with one of the strongest foundations for a brighter future, so it is right that we do all that we can to remove the barriers and blockages that keep children in need and prospective parents apart.
As my hon. Friend’s constituents found, the existing system is clearly far too often failing to deliver for many people. Chronic delays mean that children in care wait on average two years—in the worst cases, three years—to be adopted, and some children are never adopted. Currently, just over 4,500 children are waiting to move in with their new family, and we need around 2,000 more adopters than are currently approved to meet that demand, with an extra 700 adopters needed each year to meet future demand, which is a 25% growth in the system’s capacity. We need not only more adopters but more adopters such as his constituents who can welcome older children and pairs or groups of siblings into their family. There is no doubt that we face a significant challenge on adopter recruitment.
The hopes of children waiting for a family are draining away all the time. Evidence shows that a child’s chances of adoption are reduced by almost 20% for every year that they spend in care. I am determined to do whatever it takes to change that situation, which is why we are taking action on a number of fronts to speed up and simplify the adoption system. I assure my hon. Friend that that includes significant measures to drive up performance locally.
We have made £150 million available to councils to boost adoption rates, and through adoption scorecards we have strengthened accountability by publishing information on how long it takes each local authority to place children for adoption. Nationally, some local authorities are doing excellent work on adoption, which we must recognise. That work is reflected in the 12% rise in adoptions last year, compared with the year before. Although that is very welcome, performance across the country is still too patchy, which is why we will continue to monitor closely local authorities, including Surrey, through the adoption scorecard and other available data. Where progress gives cause for concern, we will not hesitate to take the appropriate and necessary action.
As well as getting local authorities to raise their game on adoption, there is also increased support for prospective adopters, backed up by the excellent training available from adoption agencies. When I talk to adopters and prospective adopters, one of the many questions that they have, as well as those on the assessment process, is on what happens next. Where does the support come from? What role will the local authority or voluntary adoption agency play in ensuring that the adoption will be successful? The worst thing that can happen to the child is that the adoption is not successful because the right support was not provided at the right time. We need to ensure that we work closely with local authorities, voluntary adoption agencies and other national adoption organisations, so that we can make really good progress by implementing the adoption action plan, by creating the adoption gateway, by reforming regulations to create more streamlined approval processes and by publishing transparent scorecard data on timeliness, so not only officials and politicians but the public and prospective adopters can see the performance of local authorities and so that others can also have a chance to understand how good or bad the performance of their local authority is.
I hear what the Minister is saying, but on paper and from what he is saying, Surrey county council would have appeared to have put in the support and so on. The difficulty is that, looking at it from the outside, it is virtually impossible to tell that that help is a hindrance.
My hon. Friend makes a key point about the quality of the support that is available. One of the areas on which we are putting more focus is the quality of social work training, and therefore on the standard and quality of social workers who work with families right from the very start, so that they get a better, higher and more consistent level of support, which we know can help to ensure that a placement is successful.
One of the changes that will help push that through is the new inspection regime that Ofsted is introducing, which will bind together both child protection and looked-after children, including adoption, so that there is a much brighter light and a much deeper look at what is happening within children’s services. We owe it to the children whose best future we have decided lies in adoption to provide them with the best opportunity at the earliest opportunity to make those all important attachments with their new family and to ensure that any delay is flushed out of the system wherever possible.
We will continue to develop the adoption scorecards and ensure that they are contextualised in a way that really reflects performance within local authorities. We have also introduced the First4Adoption phone and online service and the adoption passport, so that potential adopters have much better information and support. They do not have to go to the local authority to get that information and support, because it is provided in one place by many people who have personal experience of adoption and who are therefore in a good position to provide a better understanding of what prospective adopters are letting themselves in for and the great benefits that adoption can bring to them and, we hope, their family in the future.
Additionally, we have the new, fast, two-stage adopter approval process that started on 1 July. In most cases, prospective adopters can expect to wait no more than six months to be approved from when they register their interest. I was recently told of a couple who started the process in about October 2012, and twin babies were placed with them on an adoptive placement by February 2013. That is a fantastic example of how we can speed up the process but still ensure that we get a good match and a good-quality placement.
Surrey county council seemed to take the right approach to begin with. It was a twin-track approach of sorting out the parents and bringing in the children together. Then, of course, it flew apart. Is that what the Minister means by a twin-track approach?
What I am talking about relates to the adopter approval process. The twin-track approach is sometimes called concurrent planning. In the Bill, we are trying to promote fostering for adoption, so that rather than waiting until the final decision is made about whether the birth family is capable of caring for a child in the long term, moves can start to be made to establish the child in the placement most likely to be their permanent one. The aim is to avoid situations in which a child planned for adoption is still within the care system, moving from one foster placement to another.
The beauty of fostering for adoption, which some authorities, such as East Sussex, already carry out, is that the risk falls fairly and squarely on the prospective adopters. There is no risk to the child, who can be placed much earlier with their prospective adopters, so that the family can start to create the bonds that will stabilise their future hugely and avoid unnecessary delay, which we know only causes more problems rather than more solutions.
The two-stage process involves the initial two-month preparation period, during which the prospective adopters gather the information that they need to understand adoption in greater detail and the relevant checks and references are carried out. Those who successfully complete it then go on to the second stage—a more detailed and more appropriately focused four-month assessment. The beauty, as I said, is that it focuses on the essentials to ensure that prospective adopters can give what is necessary for a child to be placed with them successfully.
It is also worth noting that, since 1 July, a fast-track approval process has been introduced for those who have already adopted and fostered and are looking to adopt again. They do not need to start the whole process again, as they currently do; they can be fast-tracked, which will help reduce delay. The approach will dramatically reduce the amount of time that children must wait before they can move into their permanent home and their number of temporary placements. Stability is a key factor of a successful outcome for a child in care moving on to a permanent placement. The more we can reduce the number of placements, the more likely the child will have a successful childhood.
Adopters will be able to take a much more active role in identifying children through the measures in the Bill to allow approved prospective adopters to access the adoption register directly, which they have not been able to do before now. Again, we expect that that will drive up speed and the number of matches made, as well as increasing the pool of potential matches available directly to prospective adopters. We will pilot the new register in a number of local authorities before deciding whether it should be rolled out nationally, but we believe that that is the right approach, and it is supported by many excellent adoption charities.
We will change contact arrangements through the Bill, so that they are demonstrably more in the best interests of the child than anybody else’s. There have been dramatic reductions in delays since we introduced the new clause on the 26-week time limit for care proceedings. The time has gone from an average of 57 weeks to about 40 weeks, and it is falling fast. That will also help to solve many of the problems identified by my hon. Friend and experienced by his constituents.
As I have outlined, a great deal of work is under way to overhaul the adoption system fundamentally and tackle head-on many of the issues that my hon. Friend rightly raised, but we need to go further and faster, especially with regard to adopter recruitment. The backlog of 4,500 children in care waiting to be adopted needs to fall rapidly, and the system needs to sustain the ability to cope with increased future demand for prospective adopters. We know from the recent research carried out that hundreds of thousands of people out there would love the opportunity to adopt and consider it an aspect of their lives that they would like the opportunity to fulfil.
We need to grab that opportunity and make people feel welcome when they approach a local authority or voluntary adoption agency, so that they feel that the whole system is not set against them but there to support and encourage them and provide them with the advice and guidance that they need to feel equipped and confident when the great day comes and that child or those children end up in the bosom of their family. We will take whatever steps are necessary to ensure that we have a system that is deserved by our most vulnerable children, as well as by the thousands of generous, loving people like my hon. Friend’s constituents who have gone to such great lengths to open up their homes and hearts. I join him in wishing his constituents and their two little girls the very best in future.
We must always be alive to the fact that the system that we have created is never perfect, but we do know that for too long the adoption system has failed to deliver for too many children. That is why it remains a high priority not just for me or the Secretary of State, who has his own personal experience of adoption, but for the Prime Minister, who from the start of this Government has championed adoption as one of the best ways to give children, some of them with the most difficult start in life, the best possible chance of the brightest future. It is therefore incumbent on us all to ensure that we achieve that, and I believe that the work that we are doing will go a long way to address many of the concerns that my hon. Friend’s constituents have rightly raised and that he raised on their behalf. We will not take our foot off the gas.
Sitting adjourned without Question put (Standing Order No. 10(13)).