Wednesday 15 July 2015
[Mr Christopher Chope in the Chair]
Housing Supply (London)
I beg to move,
That this House has considered housing supply in London.
In the 1937 novel “Coming Up for Air” by George Orwell, the narrator tells us that his neighbours all think they have bought their own homes, and remarks,
“they don’t, the building society does”.
Although it was an inter-war satire of social mores in the suburbs, many Londoners now in precarious employment and accommodation would welcome the possibility of being beholden to the building society—they may even kill to have a mortgage. As was written in the paper the other day:
“Increasingly…owning your house is the preserve of the rich. Home ownership levels in England are plummeting just as new homes are shrinking”.
That was not in the Morning Star or the Socialist Worker; it was in The Sunday Times property section. This debate is supposed to be on the housing supply in London, but it would be no exaggeration to say that it is on the housing crisis in London, as that is what we now face.
I will base my observations on having been the MP for Ealing Central and Acton since May and having lived in Ealing since 1972. The seat is mixed in terms of tenure and nature, and spans urban and suburban densities. There are multiple issues relating to housing in London: the first-time buyer market and the resulting so-called generation rent; the numbers of young people living in shared houses, or even with their parents, right up to their 30s; the ability of councils to build houses with proceeds from sales; the disastrous new right-to-buy policy; the axing of Labour’s decent homes standards; the changing definition of affordability; and the dwindling number of key workers in the capital.
Housing is a vital issue everywhere, but in London the scale and gravity of the crisis—acknowledged by the commitments to build more houses in all parties’ manifestos—is particularly pronounced. Meanwhile, in popular mythology, everyone in London is living on caviar, quaffing champagne and Pimm’s, and the streets are paved with gold. According to Land Registry figures, London continued to see the highest price rises in the country. In March, prices rose by 11.3% to an average of more than £462,000. The rise was 5.3% nationally, with the average property price a much more modest £178,000. So London is different.
For my constituents, the average property price is now £535,319—17 times their average annual take-home pay of £31,000, according to the National Housing Federation. We also have the dubious distinction of being the constituency with the third highest number of private renters and of having the highest private rents in a marginal constituency, according to Shelter’s pre-election report. Among other things, that report found that 0% of housing in my constituency is affordable for a typical young couple, that it takes 28 years to save for a deposit and that private rents went up by 14.2% in one year. It is no wonder that only 50% of London’s households are owner-occupied, compared with a national average of 64%.
The average age of an unaided first-time buyer in London is now 37, so my first question for the Minister is: what does he predict it will be by the end of his party’s term in office? Will we soon be “Turning Japanese”? In that country, people bequeath mortgages from generation to generation.
I congratulate the hon. Lady on securing what is an important debate for all those across London who are concerned about this No. 1 issue. Will she be speaking about some of Ealing’s significant housing regeneration schemes, which are making people in other parts of London very jealous?
Yes, I will come on to some of the more noteworthy schemes in the constituency—just hang on in there and I will get to that.
I do not want to brand all private landlords as neo-Rachman rogues. According to the post-2015 election Register of Members’ Financial Interests, 142 MPs declared rental income under the category for land and property in the UK and elsewhere, in which annual rental income that exceeds £10,000 must be declared. That is 22% of MPs—just over one in five. There must be some decent ones among them.
It seems illogical that nine out of every 10 pounds spent on housing in this country goes on housing benefit, including for properties that went into private hands under the right to buy and are now rented back to councils as emergency accommodation to combat homelessness, which we have seen manifested in mushrooming night shelters, soup kitchens and food banks across the capital. Although red tape is often condemned and flexibility championed, I am proud—despite Labour losing the election—to have stood on a platform of reining in the violent price rises that lead to instability for tenants. We also need minimum standards, not only for tenants but for the letting agencies that can charge sky-high fees, in the hundreds of pounds—I have never understood what for; a couple of references, if that.
Renting is no longer just a transitory stage for people in their 20s; it is the new normal, and it is becoming routine for people further up the age scale, including many professionals in my constituency. A new staffer started with me the other day. He is in his 20s and on good money, but he is sharing 12 to a house, with a shared sitting room and kitchen. At that stage of life, “Who Stole My Cheese?” should not be a way of life, and there are older people than him in the same situation.
I am now in my 40s and first bought, pre-boom, in the 90s, but it seems that people a bit younger than me or who were not as quick to buy have missed the boat. That includes people with kids. I see them every day on the school run, and they are quivering at the prospect of the landlord selling off the property any minute, meaning that they will have to move on and find new schooling for their kids. For the people who did not buy, it seems that the generations before have benefited from rising equity and pulled the ladder up behind them.
In his new book, “Injustice”, Professor Danny Dorling says that in 2015, the combined value of houses and flats in the London boroughs of Kensington and Chelsea, and Westminster is worth more than the entire annual product of Denmark, the world’s 35th largest economy. That is a stark reminder of how London is different, and that applies to the suburbs too. The road where I grew up was not built for rich people. Opposite us lived Mr and Mrs Cotter—this was the ’70s: we did not know people’s first names—a postman and a dinner lady with two kids. Yesterday, I googled our old postcode, W5 1JH. No properties were for sale there, but all the homes on the neighbouring Greystoke estate, which are largely semis, were worth slightly plus or minus £1 million. There is no way that a postie and a dinner lady could afford to live in that road now—indeed, no public sector worker could afford any house in any part of my constituency on the open market.
The other day, I met our local chief superintendent, who told me that 60% of Met officers now live outside the M25, far removed from the communities they serve. Every school I visit locally tells me that it can get young teachers in to train, but as soon as they want to settle and put down roots, they are lost to Slough or beyond, because housing in west London is too prohibitively costly for them to stay.
The current Mayor of London, the hon. Member for Uxbridge and South Ruislip (Boris Johnson), is notable by his absence—where is he when you need him? I have had my brushes with him, it must be said, but it was he who claimed that not only property prices but benefit changes in this city were causing “Kosovo-style social cleansing”. Those are not my words; they are his. What steps is the Minister taking to reverse the trend of a growing proportion of London’s key workforce, be they in public services or other employment, being left behind and pushed out?
In an attempt to bring down the housing benefit bill, last week’s Budget effected a raid on housing associations and registered social landlords, whose properties look set to be sold off and whose revenues will be raided, stopping them from building more houses. The little social housing that we have will dwindle, and the policy is being funded by the sale of the so-called most expensive social housing properties in those boroughs. Were that to happen, it would lead to the total decimation of all housing stock in most of zone 1.
Is my hon. Friend aware that my borough of Islington has a good record of building new council houses to a high standard? We have just completed an excellent development on Caledonian Road of 25 first-rate flats. If the Government’s policy goes through, they will all be sold and not one person on the housing waiting list or in housing need will get them. They will just be sold on to the private market and rented out privately. Does she agree that that is a scandal?
I thank my hon. Friend for his intervention. It sounds like good things are being done in Islington, but they are being stifled by central Government. If only everywhere could be like Islington. With his leadership bid, maybe we could roll out the Islington model more widely.
A residential research report from JLL states that a fifth of women and a third of men aged from 20 to 34 are still living in their parent’s homes in London. They have been termed “the boomerang generation”, and there is academic research showing that this is causing redefined roles between adults and identities and intergenerational conflict, because it creates a dependence model. Before becoming an MP, I was a lecturer at Kingston University, and a lot of people among the student body there were not even boomeranging away from the parental home to boomerang back to it. The combination of tuition fees and the economic slowdown means that they do not even leave to pursue their education in the first place, so we are starting to resemble France, where people tend to stay local for university. Lord Kerslake has stated that
“Londoners are missing out on opportunities: delaying having families, being forced to rent for longer and many are locked out of home ownership completely.”
Housing is not just about bricks and mortar; it is about resilient, ideally mixed communities, and its affordability is key to unlocking this city’s full potential.
I was asked earlier about developments in my constituency. On the eastern edge is Old Oak, the super-development zone that we are promised, with 24,000 dwellings coming on stream, but most of these properties will be out of reach for most of my constituents. Can the Minister say what is being done to change the definition of affordability from the current Mayor of London’s reckoning of it as a whopping 80% of market rate?
The word “crisis” tends to be one of the most overused in politics, but right here, right now in this city, it is justified. It is not hyperbole; it is reality. London’s population is set to expand to 10 million in the next 15 years. The suburbs were once seen as the solution to our social ills—combining the convenience of city working with the values of a rural idyll; positioned between concrete jungle and village green—but even these districts at the edge of our city are now suffering with out-of-control house prices, and they are spawning these unsafe beds in sheds. The saying was meant to be that an Englishman’s home is his castle, not his shed—leaving aside the implied sexism of that phrase.
Only a massive house building programme can solve the problem, and that is something that, I will admit, successive Governments have failed to undertake. The coalition Administration concentrated on developer-led, private homes, rather than social housing and mixed communities. The cuts to tax relief for landlords in the Budget sounded laudable, but what happened to the promised neo-garden city movement? I do not hear so much about that anymore.
We need to ensure that we do not lose people to Slough, Milton Keynes and Luton. We need to reverse the brain drain away to other global cities, which will see this city hollowed out by all the Old Oaks of this world and other developments in my constituency. Indeed, there is one by the railway tracks at Ealing Broadway—Dickens Yard—where new two-bedroom flats cost £1.2 million. Needless to say, the lights are always off, because absentee purchasers snap them up as investment vehicles rather than as a roof above their head. I imagine that the Minister will say, “It’s all devolved in London,” but will he agree to include in his next housing Bill a power to let councils ban overseas and off-plan sales, to ensure that first-time buyers in London at least have a chance?
Is my hon. Friend aware that much of this overseas purchasing involves dodgy money from Russian oligarchs and elsewhere, and that house prices in our city are being pushed up by criminal money and criminal enterprise? Is it not time for the Government to clamp down on Russian oligarchs, or are they too dependent on funding from connected people?
My hon. Friend makes an excellent point. Those dodgy people do need to be clamped down on. It would be a nightmare if London became just a playground for oligarchs, which is the way things are going.
The start of a new term in Parliament marks a natural punctuation point for new thinking. Will the Minister look towards alternative solutions such as co-operative housing? In 1997, Tony Blair stated that the main issue was “Education, education, education.” In 2015, it must surely be “Housing, housing, housing.” According to Ipsos MORI, 28% of Londoners rate housing as their main concern, compared with 13% nationally. This is a timely debate, and I look forward to hearing contributions from my fellow Members, as well as from the Minister.
I thank the hon. Member for Ealing Central and Acton (Dr Huq) for securing today’s important debate. She was right to make the point that all parties stressed in their manifestos the need for extra housing. That need is clear in London, the population of which is growing faster than anywhere else in the country and at the fastest rate in history. The official 1939 population peak of 8.6 million was surpassed earlier this year. The projection for 2020 is 9 million, but Members present, most of whom represent London constituencies, will recognise that a huge number of people are missed when data are collected; the figure is perhaps rather closer to 9 million, if not larger, already. It is therefore right to concentrate on housing in London.
It is also right, as the hon. Lady said, that general elections mark a punctuation point, allowing us to consider what we should be doing in the future. They also provide a chance to ensure that we recognise exactly what is being done already. Some of the likely developments have already been set out, and that will continue under this Government in London because we were elected.
The housing strategy, as set out by the Mayor of London, must undoubtedly consider not only the private sector, but other sectors across the market. It is also clear that, under this Mayor, more houses, particularly in the social and affordable housing markets, have been built than ever before—[Interruption.] It is all very well to shout “rubbish” from a sedentary position; some Members may not want to hear the facts. Under the mayoral programme, which set out to build 100,000 affordable homes over two mayoral terms, 94,000 affordable homes have been delivered since the Mayor was elected. He is on course to deliver 15,000 more over the next two years.
Does the hon. Gentleman accept that the Mayor of London’s definition of affordable housing is such that it is beyond the pockets of most of the people represented on these Benches?
I do not accept that. The market has various sections, and affordable homes are clearly aimed at a particular section. The strategy that the Mayor claimed to be able to deliver is being delivered. He is investing £1.25 billion in the supply in London, which will lead to another 42,000 homes being provided between now and the end of 2018. Such allocations of money will support the delivery of homes on the scale announced for the next two years.
No one is suggesting that we do not need to build more houses, and in all areas of the market, but we need to be clear about what is already being done. The affordable homes scheme is delivering more affordable homes in London than ever before. Furthermore, the Mayor’s First Steps strategy, a single brand for shared ownership products throughout London, is clearly part of an ambition to deliver a number of homes in the capital, doubling by 2025 and helping about 250,000 Londoners into home ownership. That will make a significant impact on affordable home ownership, ensuring that 36,000 more affordable homes in London will be coming through, and have been built in the past five years.
The biggest issue in London is the cost of a home and how that cost starts: with the basic cost of land. One of the major promises that the Chancellor of the Exchequer and the Mayor, the hon. Member for Uxbridge and South Ruislip (Boris Johnson), set out in February this year was the London land commission. Members on both sides should be standing up to welcome the fact that we are bringing into use public sector land that is not being used operationally.
It is fantastic to have a land commission bringing public land into use, but not if such land continues to be sold off to the highest bidder. Scotland Yard has been sold off for penthouses. Can the hon. Gentleman understand the outrage in London when no affordable homes are built?
I would have listened more carefully to the right hon. Gentleman’s comments had he not said that no affordable homes were being built—that is simply not true. As I have already laid out, 15,000 will be built this year in London. Clearly, the Mayor is delivering.
The sources of land and the value to the public sector— how the land and different elements of it are used—will vary, but the London land commission has an opportunity to bring land into use for home ownership of all types throughout London. Significant tranches of land are involved. Transport for London, for example, has 568 designated sites where non-operational land could be brought into use; 98 of those are ready to be rolled out pretty much immediately, according to the TfL development director, Mr Craig.
We should not squander the opportunity, which is significant. Such land has involved work in London’s east end and the Royal Docks; we have already mentioned Old Oak Common. We should also consider the potential that the Mayor has given in the money allocated—not only to land, but to the new housing zones, which are an initiative to accelerate housing developments in areas of high potential. Last year London boroughs were invited to participate in a programme, and I am delighted that my borough will be seeking to participate. The programme is likely to deliver a significant number of homes across the borders of my constituency and that of the hon. Member for Mitcham and Morden (Siobhain McDonagh). Those will not only be affordable homes, but homes in the social rented sector as well as in the private sector.
It is good of the hon. Gentleman to read out the Mayor’s brief, but that is just utter fantasy. The hon. Gentleman mentioned Old Oak Common and TfL, but the largest TfL site is in my constituency and no social rented homes are going in those places. The limits for income have just been put up to £85,000. That is not building for Londoners; it is building for oligarchs.
I am not just reading out the Mayor’s brief; I have a panoply of things in front of me. Opposition Members will undoubtedly read out the Labour party prepared brief in a moment. I am happy for anyone to inspect my things—no brief talks about the TfL numbers, because I personally researched them. I know that those numbers are there and that they are possible. A number of sites of varying size can be brought back into all sorts of home ownership. Some of that will be affordable housing and some social renting—[Interruption.] As my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) rightly points out from a sedentary position, when it comes to Old Oak Common, we cannot yet be sure—the potential is there for at least 24,000 homes, but the mix is not yet certain.
Clearly, there is a housing supply problem in London—[Interruption.] It is not right to say that the Government are doing nothing; the Government are doing a huge number of things, supporting the Mayor in London. Labour Members might not like this, but the reality is that in the Labour party’s 13 years of office, almost no council houses were built; in the past five years of the coalition Government, twice as many were built. [Interruption.] It is no good Labour Members shaking their heads: the numbers are there—that is absolutely true. Despite Labour cries, it is Conservative Members and their Government, with the support of a Conservative London Mayor, who are taking the action to deliver the housing that Londoners need.
I am grateful, Mr Chope, to have the opportunity to speak, although I will not speak for too long as many colleagues want to get in. I will concentrate on a few points that would change the situation for many people.
Right from the beginning, we must say that there is a big difference of opinion about what is affordable. Frankly, it is not acceptable for the hon. Member for Wimbledon (Stephen Hammond) to use the word “affordable” and not accept what has already been said: that 80% of market value is not affordable for Londoners, who have average earnings of £32,000 a year when the average property in London costs £470,000. It is also not acceptable for the hon. Gentleman not to understand and to say nothing in his contribution about the concept of council or social rents. Most Londoners find themselves in an overheated market, so they want to see affordable social or council rents. That is the dispute.
Other difficult issues face the city. There is deep concern about another word used by politicians that is coming to mean very little—“viability”. It is used too often by developers and local authorities, including Labour ones—this is not a partisan point—to say that the proportion of affordable homes on a development will be low, and that is using Boris’s definition of affordable. That is why two weeks ago I rejected a plan in my constituency to turn a police station into flats, given that only 14% of them were to be affordable. That is not acceptable when public land is involved.
The hon. Member for Wimbledon shouts about the land commission, but he needs to understand that it means nothing if it amounts to the selling off of public land, to which taxpayers have contributed over so many years, to the highest bidder and moving it from public to private ownership. That is not acceptable. It must be fought and stood up to in this city.
What is equally not acceptable is to mischaracterise the situation. A huge number of Londoners want to get on the housing ladder, and some of the housing now being provided represents exactly that sort of opportunity. We are not talking only about social rents and affordable housing; some of the opportunities enable young Londoners to get on to the housing ladder.
Do the maths: the average house costs £470,000 and the average salary is £32,000. With loans at three and a half times a person’s salary, many Londoners will not be able to get on the ladder. People are therefore looking for a Government and a Mayor who have something to say about social housing. What this Government are saying about social housing is, “We are going to extend the right to buy even further and take even more property off the ladder.”
Before my right hon. Friend gets fully into the issue of social housing, he must be aware of the problems of the permitted development rule, by which any industrial or office premises can be converted into private sector housing with no need for planning permission and therefore no control whatever over the kind of property put there. That is yet another example of missed opportunities: good quality council housing could have been provided but instead there is very expensive, upmarket private rented stuff.
I am grateful to my hon. Friend for raising that point. We need homes, but not at the expense of business and industry in this city. Of course, these are developments of homes with no infrastructure or support. Office space and facilities are dwindling in the city of London. Again, the hon. Member for Wimbledon had nothing to say about that.
There are some things that need to happen. We need a redefinition of affordability. We should make the plans that developers put forward for public land transparent and open. All of the accounts of viability on public land should be available to the public, so that they can interrogate whether the proportion of affordable homes is in fact fair.
We also need a degree of rent stabilisation. The vast majority of people moving into homes in London this year are not buying their own homes, but are in the private rented sector. Rents are soaring—in the past two years they have gone up by 20% in the London borough of Haringey and 40% in the London borough of Richmond. Given those soaring rents, does the Mayor have anything to say about the private rented sector? No. He has nothing to say at all. He has nothing to say about the licensing of landlords. A mother came to see me two weeks ago. She was fleeing domestic violence, and was sleeping in a friend’s hallway with her three children. That is what is happening in London’s private rented sector.
Where is the plan for the licensing of landlords and what do the Government have to say about overheated rents? If Angela Merkel can run on rent stabilisation in her country and Mike Bloomberg can run on rent control in New York, why is this brand of conservatism so extreme and so set against that?
I will give the right hon. Gentleman one example. What about the London Housing Bank using loans of up to £200 million to ensure that there is affordable rental accommodation? That is an example of a one nation Conservative Mayor tackling the issue of affordable rents.
I am afraid we have come back to the original debate about what is in fact affordable. Too many people are not seeing that affordability.
I suggest that we create a new vehicle—a Homes for London agency. The Government are set against any borrowing, but it is important to understand that a large part of the problem in London has been caused by the entire withdrawal of public grant to build homes in the city, amounting to £4 billion lost from this Government. That has to be replaced somehow. A new agency in London with a triple A rating could go to the bond markets and raise money against gilts, as Transport for London does. That would get us to a £10 billion fund—we will need a fund of that size if we are to make a difference. It is not about Government borrowing but a vehicle in London that can do something.
We need some kind of bond system to raise significant money for building social and council homes. We need to redefine affordability. We need rent stabilisation—every major city in the world understands that overheated rents lead to chaos and overcrowding; in some cities, such as Paris, they have led to riots. It is also important to hear what is being said in communities about estate regeneration.
I am against setting up a 1970s-style bureaucracy to impose rent control. I am for a rent cap, linked to interest rates, to ensure that our more excessive landlords are not able to drive up rents in the way that we are currently seeing. That model would require much less bureaucracy. It seems to work, in continental Europe in particular, and we should adopt it. It is the one that our party had in our manifesto at the last election, and I thought we had landed in the right place.
Finally, there is the issue of brownfield land—this relates to what my hon. Friend the Member for Islington North (Jeremy Corbyn) said about permitted development. If we stick to the idea that all our solutions can be built solely on brownfield land, we will end up driving out business and industry, and building solely upwards. I suspect that absolutely no one in this Chamber lives on the 22nd floor of a development, particularly if they have kids. In the 1960s and 1970s, we built things all over London that people simply do not want to live in. There is a real danger that we will do that again. We need some mechanism for green belt review.
A lot of the green belt is not green; it is car parks, quarries and waste land. Using just 3.6% of the green belt would let us build 1 million homes. In the London area, having the outer boroughs make a contribution with redesignation would get us much further along in this journey. The vast majority of housing being built is small—in fact, tiny—two-bedroom flats. That does not help the families in real need in this city.
It is a pleasure to serve under your chairmanship, Mr Chope. I welcome the debate secured by the hon. Member for Ealing Central and Acton (Dr Huq).
All Members present, representing areas of London both north and south, agree that housing is the No. 1 issue and one we need to debate more. I do not want to take up too much time, because I do not want to interfere with what has been, in many ways, a Labour London mayoral hustings. Although Labour nationally and in London should be doing a lot of soul searching, there also needs to be some honesty. There has been none yet in the leadership hustings, so perhaps there will be some in the Labour mayoral hustings.
We have heard the usual pejoratives about the rich coming over here and taking up all the London property, as well as the usual mantras about rent caps and controlling the market. We have also heard—with a shudder, certainly in my constituency—an attack on the green belt. People will be rushing to their local plans to make sure that there is proper protection for their local area. We must make sure that those decisions are made locally.
Let us have an honest debate. Let us recognise that there has been a 30-year failure by Governments to provide sufficient housing in London, and that there is blame on all sides. Let us also recognise that the Mayor and the Government have made great strides. Despite coming through a great recession, we are now able to seek to realise our ambition of doubling house building. We do not need a mayoral briefing, or any other briefing; we can look at the National House Building Council statistics: in 2014 there was a 10% increase in new housing registrations, at 28,733, up from what had been a record figure in 2013 of 26,230. We can all look around our constituencies and say that a lot more is needed, but there has been progress, which should be welcomed.
Also to be welcomed is the ambition to build 22,000 new homes. We have not seen anything like that since the 1930s. I am proud to be a Conservative and a Member of a one nation party and Government. We have a great history of leading revolution in house building. Together with the Conservative Mayor, we are starting to get there.
This debate is about affordable housing in all its forms, but it is also about rents. We have not yet mentioned the Mayor’s strategy, which is about ensuring that we build purpose-built rental property to have an affordable rental market. I referred to the housing bank, which provides £200 million of loans. Affordable rental properties are an important element of the market.
We also need to recognise that many of our constituents cannot get on to the housing ladder because they cannot afford it. Young professionals cannot get on to the ladder. We need to build affordable housing.
It does. I will talk about Enfield shortly, where some of the affordable housing that is being built is genuinely affordable. Meridian Water, which is alongside the constituency of the right hon. Member for Tottenham (Mr Lammy), will provide 5,000 new homes and is a huge opportunity to provide genuinely affordable housing as part of a mix. There needs to be a mix. We also need to focus on shared ownership to help people to get on to the ladder. We need to do more to encourage the First Steps programme, which my hon. Friend the Member for Wimbledon (Stephen Hammond) mentioned; as he said, that should double in scale. Shared ownership is important and should be a priority. We should call on housing associations to encourage shared ownership of their housing stock, rather than seeing it as an add-on or a subsidy for the rental market.
I did not hear the hon. Member for Ealing Central and Acton say anything positive about regeneration, even though there has been significant regeneration in her constituency. This week, a £55 million regeneration project was announced. On my patch in Enfield, Meridian Water is a huge opportunity to build 5,000 homes and create thousands of jobs; crucially it is linked to the transport infrastructure changes that are needed to transform the Lee Valley area. That is important.
The 20 housing zones are producing life-changing opportunities. We need more, and across London we should welcome them. London leaders do welcome them, but the Opposition seem not to.
When new housing starts at £1.2 million, how does the hon. Gentleman square that with the fact that there are 13,000 people on the council waiting list in Ealing borough; there are only 700-plus properties whose leases turn over each year; and there are 250,000 people on the waiting lists in London? The stuff being built is not appropriate to those people.
I agree, and the challenges in Enfield are similar to those in Ealing. I will not put my head in the sand and say all is rosy out there; I want to challenge the Government on some aspects. The plan for the redevelopment of the Ladderswood Way estate, which was put together by a Conservative administration and is now being carried forward under the Labour-run council in conjunction with the Mayor and the Government, will create 500 homes by 2018. Crucially, it needs transportation links, but opportunities are literally coming down the tracks—Crossrail 2 will be important for the New Southgate area. Opportunities are being harnessed, not least by the London land commission, to draw together everybody who is interested in public land and get them to work together in more co-ordinated way, which has not happened previously. All those things are important.
The London land commission was launched on Monday, so these are significant times. We need additional investment, and I look forward to continued support being announced in the autumn statement. City Hall, central Government and London boroughs are coming together to lock in surplus public land for housing, but we need cross-party support. Sir Steve Bullock, the Mayor of Lewisham said,
“It is vital that our overall strategy to tackle the housing crisis delivers an increase in affordable homes for ordinary Londoners.”
That is important, and we should all welcome it.
The hon. Member for Ealing Central and Acton asked about garden cities. In London, it is about garden suburbs. In Barkingside, the local development plan includes building 11,000 homes and five schools and providing 65,000 square metres for employers and community space. That is to be welcomed.
Right to buy will be coming through in the housing Bill. I support the principle of right to buy—people should have the opportunity to own their house—but the reality is that the majority of high-value council houses are in London, so the eyes of the rest of the country will be on whether the right-to-buy scheme is being subsidised through London housing. We need to the challenge the Minister on this. My constituents would not want the receipts from properties rightly bought by tenants of housing associations to go north of the M25.
May I inject a bit of reality on that point? In my constituency, there are 4,800 children living in overcrowded conditions on the housing register. I have had half a dozen advice surgeries since I was elected and half the people who have come to see me are concerned about serious overcrowding. The proposed right-to-buy extension will affect them disproportionately. Some 37% of housing in Camden will fall within the higher value bracket and thus will be sold off at the very time that people in Camden absolutely need it. It is going to make the housing crisis worse, not better.
I understand the hon. and learned Gentleman’s concerns. It will work if we increase the number of homes, and the way to do that is to ensure, in the spirit of localism and devolution, that London gets the receipts of the sales. If, as I suggest, we build two houses for every one sold, we would deal with the concerns about overcrowding and waiting lists in the hon. and learned Gentleman’s constituency and mine.
There is another issue on which London councils need to work better. Particularly in Ealing and Enfield, people are coming up from inner-city boroughs and are being placed temporarily in cheap accommodation. There are not only the costs of the accommodation, but social care costs. Children in care have an associated budget, but children in need have lots of associated costs. London councils need to work much better strategically to ensure that Enfield is not picking up the bill for residents of other boroughs. We need to work much better on that to ensure that Enfield, which does not have a properly fair funding formula and settlement, does not have to deal with that impact.
There are lots of other mayoral candidates and others who want to speak, so I will not go on for much longer. I will conclude by saying that we are a one nation party with a great history, not least on building housing.
I will not. There are too many candidates who want to speak.
The litmus test of a one nation party and Government is how we deal with the housing crisis. In London, we need to ensure that we continue to build more housing than ever before for the benefit of all Londoners.
The length of the speech of the hon. Member for Enfield, Southgate (Mr Burrowes) proves the failure of self-regulation in the House of Commons and, indeed, anywhere else. I will genuinely attempt to be as brief as possible.
There is an enormous housing crisis in London, and it is getting worse. Someone walking around the streets of London on any night will see the number of people now sleeping rough, without benefits and begging. Every day, people are being evicted from the private rental sector to make way for somebody else moving in on a still-higher rent. There is something brutal and unnecessary about the way in which many people in this city have to live.
The abject failure of Government policy to address the issues of housing in London is making the situation worse and worse. Nothing that the Government have proposed since they were re-elected in May is going to do anything to alleviate the crisis facing large numbers of people in London.
First, there is the idea of cutting most local authority tenants’ rent by 1%. I have no particular problem with that, but I hope that the housing revenue account will be compensated accordingly by central Government; otherwise, it will lead to an investment problem in the future. Then there is the bizarre idea, which I suspect is a Trojan horse for changing the whole local government rent regulation system, of charging market rents for those earning not very high incomes—median incomes. I was talking last night to a well qualified and experienced social worker in a London borough who is worried about applying for promotion, because success would put his salary up, which would more than double his rent. A salary increase of more than £10,000 a year would leave him worse off. That is a ludicrous situation. Council tenants should pay a council rent that they can afford.
Does my hon. Friend agree that one of the aspects of putting up council rents for people who earn a little more is that the earnings will be household earnings, which means that the rent for two people on an average salary in London will go up? Is not putting up rents in that way a tax on aspiration?
My hon. Friend is right. I hope that the Government will think this through and not introduce the regulation. It is unworkable and will lead to a lot of perverse results, unless it is a Trojan horse for something else, as I suggested, putting all council rents on to a completely market level. I suspect that that is in the beady eye of at least some in the Conservative party.
The second area of concern is the private rented sector. More or less a third of the population of my borough live in that sector, often in poor conditions. Most are on six-month assured shorthold tenancies; they have no control over the rent and, in reality, no protection against eviction. We must address the question of the quality and regulation of the private rented sector.
Of my constituents in Hampstead and Kilburn, 33% rent privately. Bearing that in mind, does my hon. Friend agree that we should think about a national register of accredited landlords, to weed out the abuse in the system and the revenge evictions that still happen, even though they are technically banned?
The quality of management of much of the private rented sector is appalling, and the lack of regulation of letting agencies leads to many shocking cases. It is often the most vulnerable people who are victims of what happens in that sector.
The hon. Member for Enfield, Southgate was complaining about the number of people moving in to his borough from other boroughs. Indeed, people from my borough go there—they get moved there because the council has nowhere to put them in Islington. They want to come back. Often they live in poor conditions. The hon. Gentleman is right up to a point that the practice meets a need of the borough; however, it also creates a problem for the children involved. If he goes to any inner-London tube station in the morning, he will see children who travel quite long distances to attend primary school, because their family want to return to the borough they come from and hope desperately to get a council place there to move into. It is a reasonable aspiration, and one obviously hopes for success.
My final point is about sales of council properties. With a £100,000 discount, a vast amount of money is being given to the people who are lucky enough to get a council place. If a tenant of council property buys it and remains there, that does not make much difference to the overall social make-up, the housing stock or anything else; but when they decide to move on, the homes are never sold to people on the housing waiting list. They cannot be. More than a third of the council properties recently sold in my borough have ended up in the private rented sector, often for very high rents. There is something ludicrous about a council rent of £100 to £110 a week being charged for a flat when an identical flat next door is rented for £400 or £500 a week, with most of it being paid for through the housing benefit bill. If this Government deserve a prize it is for subsidising the private rental system in this country.
We need a serious, sensible form of regulation of the costs of housing and particularly the private rented sector. Average rents in Britain are more than double the average for the rest of Europe—in London particularly. We must address the issue, or this city will become even more divided. In 10 or 20 years it will resemble Manhattan. There will be a smallish number of people remaining in council and housing association properties in central London, and those will be the only social rented places available. The rest of the residents will be wealthy enough to buy, or to pay very high rents to live here. All the workforce will travel long distances on trains and buses to keep the city going. We should ask the London Chamber of Commerce and Industry about its concerns for the future London labour market, and we should look at the problems. We are destroying this city by our failure to build enough social housing, regulate what we have and plan for the future, other than by allowing funny money to flow in to buy up large amounts of land and property, which is often left empty and used only as a cash machine.
There are 14 Labour MPs wanting to speak in the debate, so it is disappointing that two Tory Back Benchers spent 25 minutes this morning filibustering on an issue that is important to many of us.
There is a housing crisis. Not enough homes are being built, and those that are being built are not of the right sort. There are not enough homes with a genuinely affordable rent—a social rent linked to earnings rather than market value. There are not enough homes being built for which people can pay a London living rent. There are not enough family homes being built, and there are too many being sold off-plan to people in Singapore, Hong Kong and Malaysia. I have nothing against those countries and the people who live there, but we cannot allow our homes to be used as gold bricks by foreign investors and to sit empty.
It is a con when people talk about the market value of properties. The Mayor has a definition of 80% of market value as affordable. The Valuation Office Agency’s private rental market statistics show that the market rent for a four-bedroom private property is £2,500; for a three-bedroom property it is £1,695; for a two-bedroom property it is £1,400; and for a one-bedroom property it is £1,155. We can see why there is a housing crisis in London, which some people do not want us to talk about in Parliament.
On that point, does my right hon. Friend agree that that definition of affordable housing makes no sense, given that, in a borough such as mine, only a household with an income of £102,000 could reach the threshold of housing costs as no more than 40% of income? That would exclude the overwhelming majority of people in any housing need.
My hon. Friend is right, and that is why there is a crisis. In the King’s Cross scheme, which my hon. Friend the Member for Islington North (Jeremy Corbyn) will know about, one-bedroom properties are selling at £985,000. The price for a two-bedroom property there is £1.7 million. In Heygate in Elephant Park, a studio flat will cost £569,000 and a two-bedroom property will cost £800,000. It is possible to get a penthouse at a discount, at £2.1 million. We now have a city where developments have “poor doors”. There is a door for people who can afford market value and there are poor doors for those who cannot.
Freedom of information tribunals have shown that developers in Heygate, the Greenwich peninsula and Earls Court have taken advantage of the viability con, which means that they can say it is not viable to build affordable homes. I am pleased that my hon. Friend the Member for Islington North talked about Islington, which now has a new scheme that will be open and transparent. Developers will have to publish their viability assessments for schemes. I do not care whether we use the term “rent control”, “rent cap” or “rent stabilisation”. We need to sort out the rental market in London. More than half the disposable income of those who rent—a quarter of Londoners—goes on rent. That is unacceptable and is a reason why last year more than 60,000 Londoners aged between 30 and 39 left London. We have a brain drain from London caused by the housing crisis.
To compound that, we have—even in the words of the two filibustering Tory Members who spoke in the debate— a housing supply crisis in London. What is their answer? It is to sell off housing association properties and force councils to sell off their most expensive properties. That will lead to a situation in which good councils such as Islington and Camden must sell the new properties that they have built. Social cleansing is taking place in London; we are copying Paris and New York for the wrong reasons.
If the Government are going to force councils and housing associations to sell properties, all that we need is that they should require them to build one before they sell one, like for like in the same area, unless there are exceptional reasons not to. Then London will not become a city for the rich only, with outer London for those who cannot afford to live in inner London. Conservative Members who have spoken may think that a modern London of that kind is acceptable, but those of us who have made the effort to come to this 9.30 am debate, but did not get the chance to speak because of the disgraceful filibustering, want change.
Order. On several occasions, the right hon. Gentleman has tested my patience by using the expression “filibustering”. Nobody in this Chamber has been filibustering and if they had been, I would have brought them to order. I think it is very disappointing that, having relied on self-regulation, that seems manifestly to have failed and I have not been able to call as many Members present whom I would have wished to. However, we now have to move on to the wind-ups, because under the rules laid down by Mr Speaker we have a maximum of 10 minutes for the SNP spokesman. I call Dr Whiteford.
On a point of order, Mr Chope. As Chair, you are of course entirely within your rights not to impose a time limit. However, because Members, particularly on the Government side, have not shown any restraint, and given that this is the most important issue for London Labour Members and that we have come here to try and contribute, I wonder whether the Front Benchers would concede a little time to us, so that we can at least make some contribution. That would seem a fair way to proceed.
Thank you, Mr Chope. I begin by congratulating the hon. Member for Ealing Central and Acton (Dr Huq) on securing the debate, which I have listened to carefully. I genuinely regret that more London MPs have not been called to speak, because I know that the contributions they have to make are worthy.
What I have heard today leaves me in no doubt about the seriousness of the housing problems facing people in this city and the failure of successive Governments to really grasp the nettle, particularly with regard to affordable housing in London. Although I represent a seat in the north-east of Scotland, I am not a casual observer of what is going on here, because, like all Members from outside London, I spend my working week here. I live in this city when Parliament is in session and I need to find a place to stay too. Even from the very privileged position that MPs have, the distortions and excesses of property prices in London and in the private rented sector in central London are more than evident.
Is the hon. Lady aware that part of the reason for people being squeezed out is the amount of buy-to-let landlords there are now, and that it is easier to become a buy-to-let landlord than it is to become a first-time owner-occupier? Is she also aware that by getting rid of tax relief on buy-to-let mortgages, the Government could raise £6 billion, which would be the equivalent of funding housing associations to provide 100,000 properties in our city?
I am very pleased that the hon. Lady has managed to get those important points on the record, because they are pertinent to this debate and have not really come to the fore yet.
Prices are way beyond the purse of even quite well-paid people in London, and that is just not sustainable. The fundamental and interlinked issues at the heart of this are supply and affordability. A fundamental shortage of housing has pushed rents out of control, the consequences of which have been well rehearsed. The right hon. Member for Tottenham (Mr Lammy) made a key point by saying that someone on an average salary of around £30,000 a year cannot even dream of owning a house that costs nearly half a million pounds.
The average house price in Brent is £384,000, which is 19 times my constituents’ average take-home pay of £19,937. Rent can be 78% of a constituent’s income. That contributes to the housing crisis in London. Does the hon. Lady agree?
I absolutely agree, and I am pleased that the hon. Lady has been able to make her point, albeit quite late in the debate. It highlights the fact that the Help to Buy schemes introduced by the Government will not even touch this problem, because even with those schemes, people are completely out of reach of the market. That takes us back to the point made earlier. It is easier now for someone to have a house in London that they do not live in than it is to have one that they do. In fact, they could probably live off the proceeds of the house in London, if they could get a foothold in the market. We need a housing mix that includes affordable homes not only for the people who have historically lived in the area, but for those who work here in normally paid jobs, whether in the private or public sector.
As hon. Members know, housing is a devolved matter in Scotland. We have property hotspots too and inflated property prices in some parts of the country. We have also experienced a shortage of supply of affordable homes, over getting on for 30 years, and we have inherited a legacy of depleted public housing stock—
I absolutely will, Mr Chope, but I think it is very important for us to understand that some of the ways we have tackled the underlying problems in Scotland might have lessons that are well worth sharing in other parts of the country. The way we have tried to tackle them is very simple: we have tried to build more houses, and our completion rates across all sectors—both private and public—have been much higher. The fundamental problem here is that we are not building enough affordable homes for people. The completion rates in Scotland across the private and the public sectors have been much higher. It is worth making that point because in London the situation is completely out of control and there are very real challenges for any Government in trying to put that right.
A key point raised today, as touched on by the hon. Member for Islington North (Jeremy Corbyn), is the issue of selling off housing association stock. It seems to me to be utterly insane. I cannot believe that any Government, with any sanity, would even attempt to do that, because if there is already a shortage of affordable housing, my goodness, why on earth would we sell off what we have? Hon. Members have made it clear during this debate that the money for which people will essentially be getting a free house could be so much better invested.
Earlier this week, I met the National Housing Federation, which was clear that it could build four houses for the giveaway that one tenant gets. Let us make absolutely no mistake about what will happen to those houses in a very short space of time: they will be sold off to tenants and, within a few years, they will end up back in the private rented sector at exorbitant rents. People will not be able to live in the houses if they are on decent salaries, and if they are on lower salaries, they will be pushing up the benefits bill yet further by having to be supported in their housing costs. The proposal does not address the underlying shortage because it does not build more houses and that money is simply not being reinvested. I wonder how many MPs are renting, in the private sector, homes that were once local authority or housing association homes that have been hived off into the private sector and are now being let at market rents that only MPs and other very privileged people can afford.
The Budget last week was terrible for housing. The point has been made about the changes to social rents. Of course, there are pros and cons to that, but one of the big problems is that it will disincentivise investment by housing association providers here in London. The National Housing Federation said in its initial analysis that it expected 27,000 fewer houses to be built because of the changes announced last week. That seems to be compounding the problem, not addressing it. We also need to look at whether people will be disincentivised from investing at all. The NHF told me that it already knows of one housing association that has cancelled a planned house building project on the back of last week’s Budget.
I cannot but agree with Shelter, which said that last Wednesday was
“a bad budget day for housing and those struggling with housing costs…Only if you invest in affordable homes by rebalancing investment and having a housing strategy that recognises house building, rents, benefits, and homelessness are part of the same problem, can you permanently bring down the welfare bill. If you just slash and burn benefits in the hope people in genuine need will miraculously find well paid jobs, cheaper homes or fewer children, you’re unlikely to succeed in anything but making more people homeless.”
I do not think that problem is more acute in any part of the UK than here in London, where people are often working in low-paid, service-level jobs, but are having to make long commutes into work because housing is now increasingly out of reach.
We know that if we invest in affordable housing, we can tackle the problem at its roots—that we can tackle not just the symptoms of the problem, but the underlying problem. The UK Government need to boost their funding for affordable housing throughout the UK, but I urge them to be much more ambitious. I noted Government Members’ scepticism towards the points made about selling off the housing stock, but we have heard very little about actually building new houses, and the Government’s ambitions for that are woeful. They need to be building 100,000 houses every year because of the lack of supply, and London is at the heart of that. Londoners would benefit from that, and those in average-wage or low-paid jobs would gain a great deal from it, but investment in housing would transform the lives of many people throughout the UK, and that work has to start here.
It is a pleasure to serve under your chairmanship again, Mr Chope. I congratulate my hon. Friend the Member for Ealing Central and Acton (Dr Huq) on securing this important debate. I share her strong concerns about the urgent and growing housing crisis in our capital city. She gave an excellent review of the problems with housing in London.
It is worth putting on the record how brilliant it is to see so many Labour London MPs here for the debate, representing their constituencies. Despite the very limited time available, we managed to hear from my right hon. Friends the Members for Tottenham (Mr Lammy) and for Tooting (Sadiq Khan), my hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) and my hon. Friends the Members for Hammersmith (Andy Slaughter), for Hackney North and Stoke Newington (Ms Abbott), for Ilford South (Mike Gapes), for Dulwich and West Norwood (Helen Hayes), for Islington North (Jeremy Corbyn), for Hampstead and Kilburn (Tulip Siddiq), for Westminster North (Ms Buck), for Mitcham and Morden (Siobhain McDonagh) and for Brent Central (Dawn Butler).
I congratulate all those colleagues on getting in key points despite limited time. Interestingly, they showed clearly how the policies coming from the Government and the Mayor of London are simply not delivering the housing that their constituents need. They raised important issues about the supply of homes, the quality of homes and delivering genuinely affordable homes. They pointed to increasing homelessness, increasing rents and the subsidy going to the private rented sector that is distorting the market, alongside the acute shortage of land in the capital and policies that will deliver additional land. That was in great contrast to what was said by Government Members, who seemed to be living in a world of housing delivery that has escaped most of us on the Opposition side of the Chamber.
Housing supply is the crux of the crisis. It is estimated that the need for additional housing in England is for up to 300,000 new units a year, or three times the current supply levels. House building has fallen to the lowest level in peacetime since the 1920s. New property listings have declined for four months in a row and have failed to show any meaningful growth for two and a half years.
London is at the heart of the supply shortage. London house prices have increased by 43% in the past five years, primarily as a result of the acute shortage. The average house price in London in 2013 was £475,000, an increase of a staggering £41,000 compared with the previous year. We are looking at a broken market that can be fixed only by bold measures to improve housing supply, particularly in London. As many hon. Members outlined, house price rises in London have outstripped wage inflation and prices have hit an affordability ceiling, with last year’s figures showing the salary to house price ratio at 14 times average wages.
Shortages are pushing up prices not only in London but in surrounding areas as the commuter belt gets wider and wider; that point was made excellently by my hon. Friend the Member for Islington North. To get affordable housing, people are having to move further and further out, often losing their connection with the borough that they want to live in and meaning that children are dislocated. The Government have not addressed that very important issue.
I thank my hon. Friend for raising the point about families having to move further and further away. That is not only a problem for those families because of the social pressures that they face; it also places additional pressure on outer London boroughs, which have their own problems because of a shortage of housing and pressures on the small amount of affordable and private rented housing available. We have the additional pressure of families moving from central London.
I thank my hon. Friend for making an excellent point.
The cost of renting in the home counties has risen by 5.4% in the past six months, with an estimated 47% of tenancies consisting of corporate commuters, so there is an impact on the outer boroughs and on surrounding areas as well. The poorest and most vulnerable have been hit particularly hard by skyrocketing prices as the crisis has deepened. As hon. Members have said, that is increasing the number of homeless people on the streets of London. The figures are shocking: 7,581 people slept rough in London at some point during 2014-15; that represents a 16% rise on the previous year. There is also a huge impact on the number of people claiming housing benefit.
Analysis published by the National Housing Federation earlier this year forecasts that a 21-year-old Londoner will have to wait on average until the age of 52 before they can afford to get a foot on the property ladder if the current price increases continue. More and more people are relying on the bank of mum and dad in order to take out a mortgage. That is increasing inequality in the city.
Worryingly, the CBI has warned that the lack of housing supply is having a massive detrimental impact on social mobility. If the only young people who can afford to live in London are those whose parents already have a home there and can remortgage it or afford to help them with rent or mortgage costs, the recruitment pool is restricted to the children of more affluent members of society. That is not a sensible policy at any level, including economically.
Even the hon. Member for Uxbridge and South Ruislip (Boris Johnson) acknowledges the need
“to double housebuilding and provide a million more homes by 2025.”
It is just a pity that he is not actually doing anything to deliver on that in London. In fact, as a great many of my hon. Friends pointed out, he is calling in planning applications in order to reduce the number of affordable housing units delivered. Again, that is in contrast to Labour councils in London, which are doing what they can—Islington is a very good example—to deliver more council houses.
The Minister has not answered a question that has been put to him on a number of occasions, which is that, given this policy—[Interruption.] No, outside this debate, but he has another opportunity today to answer the question. Because the Government are requiring or going to require councils to sell off their highest-level stock, will he insist that Islington sells the council houses that it is currently building before they are even occupied by council tenants? That very serious question needs to be addressed.
In the last couple of minutes of my speech, I shall turn my attention to some of the things that I think the Government need to do. First—this point was echoed by many hon. Members—we need a coherent and comprehensive policy to increase housing supply in London that will deliver genuinely affordable houses in communities that people want to live in, with the associated infrastructure and services that are necessary. They do not want to be surrounded by buildings that are empty because the homes have been sold to overseas investors.
My hon. Friend is absolutely right. From her previous comments, is it not clear that the Government are not only not taking the action that she proposes, but actively making the situation worse? Forcing the sale of a third of council properties means that the only affordable source of accommodation is being run down and will not be available for people in housing need.
It is a pleasure to serve under your chairmanship, Mr Chope. I congratulate the hon. Member for Ealing Central and Acton (Dr Huq) on securing the debate. We recognise that there is a huge demand for housing in London and there is a real challenge for the Government and the Mayor, who has set himself a significant challenge to meet the needs of the growing population in this hugely important world city. London is an economically important and vibrant place to live and work, and it is crucial that we ensure that the housing market works well.
It has been interesting this morning to listen to a mixture of mayoral and leadership hustings, as well to quotes from George Orwell. I assume that the hon. Member for Ealing Central and Acton, who quoted one of my favourite authors, will therefore want to support things such as right to buy and the starter homes package, despite the opposition of her Front-Bench team. She has outlined her desire to see more home ownership, which is something that both schemes will deliver.
We have introduced a range of measures to get Britain and—working with and supporting the Mayor—London building again, to fix the broken housing market and help hard-working people to get the home that they want.
Does my hon. Friend agree that the Mayor’s task has been made even more difficult by the fact that he inherited a situation in 2010 in which housing stocks were at their lowest level since the 1920s? Council house building was less than half what it has been during the coalition period.
My hon. Friend makes a good point. I find it ironic, to use parliamentary language, that the Labour party makes the case for house building while seeming to forget that it left us with the lowest level of house building since, I believe, 1923, as well as a reduction in the number of social homes. The coalition Conservative-led Government built more council-owned homes than were built during the entire 13 years of Labour.
I will not give way at the moment, because of the time restraint.
Since 2010, we have been able to deliver more than 260,000 affordable homes in England, including more than 67,000 in London alone. We have exceeded the target that we set ourselves for the period to 2015, and we will not stop there. We will ensure that we deliver another 275,000 affordable homes by the end of this Parliament. That is the fastest rate of affordable house building in more than 20 years, and it will benefit communities across our country.
The constituency of the hon. Member for Ealing Central and Acton will benefit hugely from the resulting housing regeneration. Early work has shown that Old Oak Common alone could result in the development of up to 7,650 affordable homes, and we recognise that high earners in social housing should pay their fair share. That is why last week’s Budget, which some hon. Members who have spoken today have clearly not yet read, not only included our commitment to protect social tenants in England from rising housing costs by reducing their rents by 1% a year for four years, but will ensure that high earners who live in social housing are not being unfairly subsidised at the taxpayer’s expense.
Although the announcement of the 1% reduction in social rents will be welcomed by tenants, it will leave a £16 million hole in Southwark Council’s housing revenue account. Can the Minister give us an assurance that that money will be replenished by the Government to enable Southwark Council’s continued investment in affordable housing?
I would like to see Southwark Council go further in developing more homes and using some of the £21 billion of reserves that councils have built up over the last few years. We are determined to make sure that tenants get a fair deal, particularly where social housing costs have increased at almost double the rate of the private rented sector over the last few years. We are committed to supporting the aspiration of ordinary hard-working people who want to own a home of their own. That is why we will deliver 200,000 starter homes over the course of this Parliament, at a 20% discount on market value.
I will not give way at the moment.
A Help to Buy ISA will help those saving for a deposit to have a better chance of owning their own home. The Help to Buy schemes have already supported a total of 210,000 households since 2010 with the measures we have taken. We intend to go further. We will do more to help people reach that aspiration of owning their own home. We will work to deliver that for 1.3 million housing association tenants, supporting their desire to own their own home and making sure that at the same time we are boosting the housing supply in this country.[Official Report, 7 September 2015, Vol. 599, c. 1-2MC.]
Hon. Members mentioned private sector rates in England as a whole, which have been rising at less than inflation during recent years. We need to make sure that good standards are met, and we are taking steps to improve quality and choice in the sector. That is why we have established a fund to deliver a further 10,000 new homes. We will continue to improve the sector’s professionalism and to make it even more attractive to investors, to deliver more homes. We have taken action to tackle bad landlords so that they either improve or, preferably, leave the sector. That is why I support what the Mayor of London is doing with the London rental standard. We have published the “How to rent” guide and the “Renting a safe home” guide to help tenants better to understand their rights and responsibilities.
Opposition Members have talked about different forms of rent control and tried to argue that they are not rent control as any of us see it. If it looks like rent control and it smells like rent control, as the electorate made clear in the general election this year it is rent control—something that the Labour shadow Secretary of State has already said does not work and will not work. Experiences elsewhere have proven that, and we will not do it.
We are also facilitating new ways of regenerating inner-city estates, as we have seen at City Mills in Hackney. We are looking to kick-start more work to deliver more homes. We believe that we can deliver more homes on brownfield land without adopting the plan of the right hon. Member for Tottenham (Mr Lammy) to build across our treasured green belt. We expect to bring more than 134,000 more homes up to the decent homes standard, including around 55,000 homes in London alone. We will be investing a further £160 million to ensure that by April 2016, no more 10% of stock in each local authority does not meet that standard, and £145 million has been allocated to London.
We have, as hon. Members have pointed out, brought forward permitted development rights to get better use of existing buildings, particularly unused office space. There have been 25,700 permissions for home extensions and office-to-residential conversions to date.
Not at the moment.
That is 25,000 more homes for people in London who need them, and I am disappointed that Opposition Members seem to want to prevent Londoners from accessing those homes. That is part of a radical package of planning measures that the Chancellor announced at the Budget last week, including extending the Mayor’s powers to ensure that further work can be done strategically in London to deliver the housing that we all want.
Our new measures will help London to build up, in addition to other building, rather than building out and touching on the green belt that Opposition Members seem so keen to deliver on. We want to deliver more homes for Londoners while protecting that important countryside, which is what residents want. Alongside our planning measures, we will invest £1.3 billion up to 2020 to unlock and accelerate development on large housing sites that are struggling to move forward. We have released enough public sector land to deliver more than 100,000 homes, and we will deliver another 150,000 during this Parliament. Our Get Britain Building investment fund of £500 million will support almost another 10,000 homes.
We are working with the Greater London Authority to support regeneration in Brent Cross to deliver another 7,500 homes, and we are providing £7 million of revenue funding to the GLA over this Parliament to support the delivery of the Croydon growth zone, which will enable the creation of another 4,000 homes and 10,000 jobs. We are engaging locally led development in the form of garden cities. There are several already across the country, including Ebbsfleet, near London.
I look forward to the hon. Member for Ealing Central and Acton encouraging areas such as hers to deliver more, and we will work with them to do that. We are determined to make the best use of brownfield land to unlock and accelerate housing schemes and deliver homes across our country. The GLA alone aims to deliver 50,000 over the next few years, and we will support the Mayor to do that.
The housing market in our capital is expanding and improving. One thing that we all agree on is the fact that London needs new homes. We do not dispute that. That is why we are committed to improving the housing market in London by working with the Mayor to respond to the capital’s particular housing challenges and helping ordinary Londoners to achieve their aspiration of home ownership. When the Opposition talk about the policies that failed them up to the general election, I gently suggest to them that they should think again.
The Minister did not answer any of the series of specific questions that I asked him, although he gave us a good catalogue of things from whatever he was reading out—it seemed to be some sort of Mayor’s brief. He was asked: does he think that the definition of affordable housing as 80% of market rate is correct, and does he think that there is scope for changing it, because it is simply not affordable for my constituents? It was put to him that the average age of a first-time buyer, unaided, in London is 37—is that right, and what does he predict it will be by the time this Administration leave office? I also put it to him that he could look at alternative models of housing. Would he investigate, for example, co-operative housing solutions? I also asked about key workers, the people who keep this city going: the police, teachers, public servants—
UK Steel Industry
I beg to move,
That this House has considered the future of the UK steel industry.
I am grateful for the opportunity to introduce this important debate, and I am grateful to hon. Members for attending. I welcome the Minister to her new role. She has already surpassed her predecessor, the right hon. Member for West Suffolk (Matthew Hancock), by attending this debate. She should not worry because I will be positive and compliment her, and hopefully she will compliment the all-party group on steel and metal-related industries by providing good answers to our questions.
The steel industry is a vital strategic foundation for the UK. Steel is fundamental to strategic sectors such as automotive, construction and energy. Being infinitely recyclable, steel is perfectly suited to sustainability. Like those of many hon. Members here, my constituency has a great and proud history rooted in the production of steel and associated products, and I hope that steel will play a strong role in the future of my area and my country.
The manufacturing of steel products makes a significant contribution to the British economy. Exports of British steel were worth £4.9 billion in 2013 and contributed £2.4 billion to the UK’s balance of trade. The sector’s overall contribution to the UK economy is worth some £9.5 billion a year. It underpins many other economic activities and will continue to do so for the foreseeable future. The industry provides jobs for thousands of people and supports domestic businesses and employment in the supply chain, with associated knock-on benefits for the national economy generated by tax revenues.
During the previous Parliament, the Government said that they would take swift and robust action by introducing compensation payments in relation to the EU emissions trading scheme in 2013, carbon price support in 2014 and making a commitment to commence payments in relation to renewables levies later this year and next year, but the industry faces a number of urgent and critical challenges today if it is to succeed tomorrow. The need for major ongoing investment will continue, and a meaningful partnership between the industry and the Government is required to overcome those challenges.
The changing nature of the economy means that the UK now imports more of the steel it consumes, largely in the shape of finished goods. In 1970, 90% of the steel consumed in the UK came from domestic production; that share is now less than 20%, with consumption broadly the same. That has compelled the UK metals sector to become increasingly export focused, which exposes us to shifting wider demand patterns and movement in exchange risks, as we have seen recently. Meanwhile, the UK remains open to imported steel material from as far away as China.
The UK steel sector continues to suffer an ongoing economic crisis. The service sector-led economic recovery has left steel-consuming sectors, such as construction, between 5% and 10% below 2007 levels; and recovering activity in such sectors has been less steel-intensive. UK steel demand in 2015 is forecast to be 75% of pre-recession levels, compared with 94% in Germany and 180% in China. Such demand levels are a real problem for a capital-intensive business such as steel.
High levels of steel imports are another challenge faced by the industry. Members of the APPG, of which I am chair, are increasingly concerned about the dramatic increase in UK steel imports, most notably from China. Steel imports from China have doubled in the first four months of 2015 compared with the same period last year.
My hon. Friend makes an excellent point, which both the APPG and EEF, the manufacturers’ organisation, have been making for some time. I hope the Minister will respond on that.
Compared with the same period last year, some products are registering truly staggering increases in imports of between 1,000% and 3,000%. The primary cause of those increases is the slowdown in Chinese construction activity, which has prompted certain Chinese producers to seek new markets in which to dump excess production. Those producers have come to the UK because they are already accredited under the British accreditation scheme to sell in far eastern markets such as Hong Kong and Singapore, which use the same accreditation scheme.
The APPG is committed to free trade, but what we are currently experiencing with some steel products cannot be considered free trade. The Government need to take a more proactive approach in such cases—some would say that they need to adopt industrial activism—and I welcome the news that, in last week’s European Commission anti-dumping committee, the Government voted in favour of maintaining anti-dumping duties on wire rod. The Minister heard my colleagues on that issue and took action. In a short period of time, she has been an infinitely better Minister than her predecessor. I will keep praising her in the hope that we get even better answers as the debate continues.
Loss of sales of the magnitude we are seeing now is unsustainable in the longer term for the one remaining British producer of rebar, Celsa, which is based in the constituency of my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty). The argument is not about creating barriers but about ensuring a level playing field not only in this case but in future anti-dumping cases, such as those on reinforcing steel bar, grain-oriented electrical steels and cold-rolled steels, which are all at various stages of investigation by the European Commission anti-dumping committee.
The steel industry is not all doom and gloom. An industry that remains innovative in which people continue to invest will create direct jobs, skills and broader regional economic growth. The steel industry has the potential to enjoy a long, sustainable, innovative and productive future. Earlier this month, for example, BOC, the biggest industrial gas company in the UK, signed a 15-year agreement to supply industrial gases to Sahaviriya Steel Industries UK, a major integrated iron and steel manufacturing facility based on Teesside in the constituency of my hon. Friend the Member for Redcar (Anna Turley) at the Teesside Cast Products site. The agreement is one of the largest gas contracts ever awarded in the UK. There has since been a turnaround, and the agreement represents a huge vote of confidence in the long-term sustainability of steelmaking on Teesside and the wider UK.
Another example, again from Teesside, is the cluster of energy-intensive industries in the Tees valley that recently set out a bold plan for the UK to lead the world in combining a growing industrial base with substantial reductions in carbon emissions. What is planned will be Europe’s first industrial carbon capture and storage network. CCS is a group of proven technologies that can capture, transport and permanently store up to 90% of carbon dioxide emissions produced by burning fossil fuels, thereby preventing them from entering the atmosphere. To date, the focus in the UK has been on commercialising CCS for electricity generation. Teesside Collective is an important departure; its premise is that a range of industries will be able to capture their emissions, plug them into a shared pipeline network and send them for permanent storage under the North sea. CCS is significant for the steel industry, as an energy-intensive industry, because the EU emissions trading system is likely to remain the primary driver of reducing industrial emissions up to 2030. Following the agreement of a new EU climate change package in 2014, sectors within the EU ETS will collectively need to reduce emissions by 43% between 2005 and 2030. Such reductions may be hard to achieve for sectors such a steel, but that type of programme offers a high-tech solution.
Projects such as the Teesside Collective may be crucial for the long-term future of the steel industry, and I welcome the support that the project has received from the Department of Energy and Climate Change. It is vital that the Government are proactive in supporting the steel industry. Such support does not have to consist of intervention similar to that in Italy, where the largest steelworks is in the process of being nationalised—incidentally, it is one of the worst-polluting steelworks in the EU. Government support could take the form of policies such as competitive energy prices and business rates. Following the review that ended in June, a swift, positive response is now required.
My hon. Friend mentioned business rates. As we know, the lack of investment in machinery and technology is a major reason for the United Kingdom’s productivity crisis. The steelworks at Port Talbot in my constituency invested £185 million in a new blast furnace, which led to a £400,000 increase in business rates. Does he agree that we need to have a business rates holiday until the review is completed at the end of 2015? It is urgent that we increase competitiveness and productivity.
I thank my hon. Friend for that question. He makes an excellent point. To encourage further investment, which we have seen in Port Talbot and across the steel industry in certain areas, we need a response from Government about business rates, so that there is no deterrent to further plant and infrastructure investment by the private sector.
Further integration into industrial policy and essential long-term national infrastructure subjects that are actually followed through would give companies the green light to invest. At present, too many infrastructure projects fail to incorporate British-made products into their design. Government can promote procurement strategies that support domestic manufacturers, encouraging innovation and job creation by signing up to the UK Steel charter for sustainable British steel.
My final points relate to the people involved in the UK steel industry. At the end of May, we stood on the brink of the first national strike in the steel industry for over 30 years. That action, which included a 24-hour stoppage, was threatened after Tata Steel decided to axe the final salary benefits of the British Steel pension scheme. It was only avoided following an 11th-hour deal between unions and Tata Steel after Government advisers and the Advisory, Conciliation and Arbitration Service were called in. Under the modified scheme, steelworkers who are given approval to retire at 60 instead of 65 years of age will receive new ex-gratia payments from October 2020. Today, the ballot of union members over whether to accept changes to their pension scheme closed, and employees at the Tata Steel works in Scunthorpe and other places are expected to deliver a massive vote of confidence for the proposed changes to the British Steel pension scheme. That demonstrates how constructive and positive industrial relations can be. We want to maintain that and we have maintained it for over three decades. I hope the Minister takes that point back to her ministerial colleagues, especially in light of today’s news.
To reinforce the point that my hon. Friend makes extremely well about the history of pragmatism in the industry, is it not symbolic that we were on the verge of the first national steel strike since 1980 and the one before that was about half a century earlier? The industry has a good history of positive industrial relations that can be continued into the future.
My hon. Friend is correct. The employees in the industry know that things could be shifted at any moment. In a globalised economy where capital can move in seconds, there is an understanding and a traditional trade union ability to get round the table and negotiate. Michael Leahy, the former general secretary of Community, always said that we believe in the force of argument not the argument of force. However, when an employer, or indeed a Government, tries to deny the democratic rights of employees in the workplace, it has to be taken into account. I hope the Minister will take that point back to her ministerial colleagues.
I mention pensions because when we are debating issues such as energy prices, productivity, emissions targets and so on, it is easy to forget that many of the communities we represent have been built from the hard work of steelworkers over generations. In the previous Parliament, I, alongside hon. Members here, pledged to stand up for steel, and that includes defending its workers, who have contributed a huge amount of their lives and expect a decent pension at the end. I do not think that is too much to ask.
The APPG members here have asked to meet the Secretary of State for Business, Innovation and Skills, and I believe that the vice-chair of the group, the hon. Member for Corby (Tom Pursglove), repeated that request in Business, Innovation and Skills questions. We would love to meet the Minister, if an audience with the APPG would be acceptable to her. We have also written to the Select Committees on Business, Innovation and Skills, which my hon. Friend the Member for Hartlepool (Mr Wright) chairs, and on Energy and Climate Change, as well as the Treasury Select Committee, asking them to investigate matters.
I thank my hon. Friend, the chair of the APPG, for sending the Select Committee that letter. The Committee has not discussed it yet, but may I say on the record that I believe that the steel industry is vital to the future of manufacturing and the prosperity of this country? We must do all we can to ensure that it is innovative, competitive and viable for the long term. I will certainly push that point in the Committee.
I thank my hon. Friend for that response.
We know that companies in the steel industry have already put in place future budgets for the compensation mechanism that will come through as a result of the Chancellor of the Exchequer’s previous commitments to a compensation mechanism. We need clarity and evidence to show that the Government are acting upon it. We also need the Select Committees to look into business rates, EU ETS decarbonisation, and the future of the industry in relation to skills. We have a workforce who are predominantly in their late 40s and early 50s. The issue might not be the lack of capital; it might be the age profile of the workforce. We need to take that on board and be serious about it.
We also need to look at the time it takes to train someone, whether in the processing or on the craft side. For example, I recently talked to Roy Rickhuss, the general secretary of Community, which is my trade union, and he said that it takes nearly three years to train a waterman who works in a blast furnace. That is probably the most important job in the plant: he is the guy who keeps the molten iron away from the water. Anyone who has ever witnessed a breakout, which is an unfortunate and serious event, knows how dangerous it can be. That job takes two to three years to train for. We need industrial activism, which does not just go to companies as urgent investment and does not just have public funding that supports that investment, but that looks at how we ensure that there is a succession plan for skills in the industry.
It is a pleasure to serve under your chairmanship, Mr Chope. I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing the debate. If there was a criticism to make, it would be that it is unfortunate that it is only a 30-minute debate. If anyone is interested in my views on this, I think it ought to be a 90-minute debate, and I would have it in the main Chamber.
It is important that we discuss the problems and difficulties that face our steel industry. I am particularly interested in looking at solutions. I want people to come forward with ideas about how we solve the many problems that we know our steel industry faces. There is no debate; we absolutely agree about the value of having a good, strong British steel industry for all the reasons the hon. Gentleman identifies.
It is right to say that we agree on the problems. We know that we have huge overproduction across the world and that that has been a real challenge for the British steel industry. We also know that there has been a marked reduction in demand. We can discuss and debate why that might be, but the harsh reality is that that reduction has taken place. I am confident, given the economic success that we have had, that demand will rise in this country. Unfortunately our economic success has not been reflected across the globe, but there will be an upturn, which is why it is important to keep steady. It will come good, even though we have overproduction, because demand will rise.
We also agree that we have a problem with the cost of energy. The steel industry is a very high consumer of electricity. We have overly high electricity prices for our industries, particularly the electricity-intensive industries, that are so heavily reliant. We call them EIIs in the Department for Business, Innovation and Skills, and the hon. Gentleman and others will be familiar with them. The cost of electricity is a serious problem for our steel industry. We must look at that, but when we do so we must understand that someone would have to pick up the bill if we were to make a move on costs to EIIs, and that may not be an attractive proposition. However, I completely understand the burden the current electricity pricing system places on EIIs—I get it.
The other matter, which was raised by the hon. Member for Aberavon (Stephen Kinnock), is business rates. I know that concerns the hon. Member for Hartlepool (Mr Wright) as well, because he was nodding with great vigour from a sedentary position, and rightly so. It is a problem. It is hugely ironic, as the hon. Member for Aberavon said, that in Port Talbot people invest huge amounts of money and bizarrely get clobbered for doing the right thing by the huge rise in business rates on the other side. Sheffield Forgemasters International in Sheffield is paying £1 million a year in business rates.
As we all know, the difficulty is that if we were to do something about business rates for our steel industry, people would ask: why not do so for all the other industries? They would all be queuing up. We are reviewing business rates. We want to listen to everyone, which is why I am happy to work with the new Chair of the Select Committee on Business, Innovation and Skills—I congratulate the hon. Member for Hartlepool on his election. We know we must do something about business rates. I want us to take a radical approach.
Those who were Members of the last Parliament will know that the new Minister is a breath of fresh air when it comes to passion for and commitment to the steel industry. In the last Parliament, the Government were working with industry to publish a UK metals strategy. Can she update the House on that work? Is the strategy ready for publication and consideration by the House?
I have some words on that. I have abandoned my speech, which will get me into terrible trouble with my officials, but I will read the next bit out rather than ad lib, because then I know it will be right.
I am pleased that the metals sector, including the steel industry, is developing a new national metals strategy. That has been facilitated through the Metals Forum, a grouping of 12 trade associations, including UK Steel, with which BIS has regular dialogue. The publication of the strategy will bring metals into line with other important foundation sectors, such as electronics and chemicals, which have led and developed their own strategies. We have been pleased to be able to fund some of the work, both for the strategy itself and for the initial scoping study, and we have seen some of the output that has emerged, which is of high quality. The public document is nearing completion and is likely to be published in early autumn. We expect it to provide a framework for our work with this sector in the future.
Hopefully that answers the hon. Gentleman’s question. It may not give the detail, but that document will be published in early autumn. I will just put on the record that I am, of course, more than happy to meet the groups that have been established to discuss how we can help our steel industry.
Mr Chope, how long have I got? Am I to go to 11.30 am, or are other Members able to make speeches? I think the answer is no. I am thinking of the hon. Member for Llanelli (Nia Griffith), who is on the Opposition Front Bench. Does she get a speech?
The short answer is that I need to make more inquiries about that issue, and of course I will write to the hon. Gentleman about it.
Yesterday I met Karl Köhler, the chief executive officer of Tata Steel. It is absolutely clear that his company will face huge challenges in the future; he has been very up front about that, and I understand that. My attitude—which hopefully was demonstrated last week, as has already been identified—is that this Government will and must do all we can to help the sustainability of the steel industry.
That is why I was so keen that we vote as we did about the threat of certain Chinese imports of certain steel products where there is good evidence that—unfortunately —China has been dumping. It is right that the EU should take the measures we are taking. I was so keen that we vote in favour of those measures that when the vote from the UK delegate was cast in favour of what many will say is a protectionist measure, although I do not have a problem with it, apparently it was necessary to go back to make sure, because it was the first time that it had happened and people were so shocked by it. I hope that the message goes out to all involved in the steel industry that I take this matter incredibly seriously.
The steel industry is a very important part of our manufacturing sector, it is important to our country and we have to do everything we can for it. However, the challenges are enormous and we should be under no illusions about that, and of course it is not only Tata but all the other steel companies that face real difficulties.
I will return to my speech—in fact, I will start it, or rather jump into the middle of it. The best way that the Government can support UK steel companies is through a successful economy and successful steel-using industries. That is why I take the view that we should stick with the plan that we started under the last Government. We will continue with it. Our ambition is to create the right business environment for free enterprise and to remove barriers to productivity and growth within sectors, including by deregulation, promoting fair competition and simplifying the business landscape. The Government work closely with the steel industry on a large number of issues, and that will continue.
Yesterday in the main Chamber, I thanked the Minister for her work on the anti-dumping measures. On supply chains for Government projects, we know that it is possible without breaking EU rules to, let us say, make it a bit easier for our supply chains to get the work. What will she do to get the Government to encourage and help the supply chains to make the necessary bids for the expected Government projects?
The hon. Lady makes a very good point and I thank her. I will certainly go back to my officials about that issue and discuss what can be done. Obviously, I would wildly encourage anyone within the supply chains to buy British-made steel; that is incredibly important for all the obvious reasons and because the steel is of such high quality.
In his opening remarks, the hon. Member for Middlesbrough South and East Cleveland talked about the skilled workforce. It may be that we have to revisit that issue, to ensure that apprenticeships are encouraged and that younger people are brought into the industry. However, the workforce in the steel industry are highly skilled.
Of course, there are certain niche sectors of the steel industry where we do particularly well and we rightly have a worldwide reputation. However, I will come back to the hon. Lady. Perhaps I will write to her about what more we can do, because the state aid rules are a real problem for us.
I am obviously very grateful, as are all members of the all-party group, to Ministers for their willingness to talk to us and engage on the issues that we are discussing. However, I would be interested to know a little about the up-to-date thinking on carbon taxation and the support available to businesses that are tackling that big problem.
I think I have made my own views very clear. I am hugely aware of the difficulties that the problem causes, because it is undoubtedly the case that our electricity costs are some of the highest in the whole of Europe, if not the world, so we have to look at them. However, we cannot simply get rid of these things; everything comes with a cost, the burden of which may have to be borne by somebody else somewhere along the line. Nevertheless, we are actively looking at that issue.
I really appreciate the Minister’s openness, her willingness to engage with us on this issue and her positivity towards the UK steel industry, but on the point that my colleague the hon. Member for Corby (Tom Pursglove) raised, one of the most immediate and positive solutions that the Government could adopt, which would send a good message to the steel industry, is to commit to implementing the outstanding parts of the energy-intensive industries compensation scheme. Can the Government confirm when they will deliver that compensation scheme, which has already been promised and announced, and will they consider bringing forward compensation for the renewables obligation?
As I say, we are having a debate between different Departments, as the hon. Lady might imagine. I thank her for her contribution and I hope that we can solve what is undoubtedly a problem, but even if we were to do the right thing with the cost of electricity, that would not solve all the problems for the steel industry; the cost of electricity is just one of the problems. I want people to come forward with solutions to help me in my job, to ensure that we do everything we can to help our steel industry and to grow it in certain areas, because, as I said, we do extremely well in many niche markets.
As I said earlier, yesterday I met Dr Karl Köhler, the chief executive officer of Tata Steel. I am looking forward to meeting Luis Sanz of Celsa, which is obviously another big player in this industry, and last month I had the pleasure of meeting Gareth Stace of UK Steel, who did not hold back in giving his assessment and some parts of his wish-list. As hon. Members know, and as I have already alluded to, EU state aid rules limit the direct help that can be offered to steel companies. Research and development, environmental protection and some training can be supported, but we cannot provide operational aid; I think that we are all aware of that. Nevertheless, we work within those strictures to provide all the support that we can reasonably provide to ensure a competitive future for the UK steel industry.
Mr Chope, we really ought to have 90 minutes to debate this issue. I will reiterate that I am more than happy to meet hon. Members and discuss it further, and I congratulate the hon. Member for Middlesbrough South and East Cleveland on securing this debate today, which he will now sum up, and let us hope that we get a longer debate on this issue next time.
Thank you, Mr Chope. I really appreciate it.
I thank the Minister for her very positive and warm words about the industry. In the short period of time that she has been in situ, she has demonstrated that she is a far better Minister with responsibility for steel than her predecessor. With her support and advocacy within the chambers of Whitehall, we can get even more positive results.
I will end by talking about the compensation mechanism. That was a specific promise given by the Chancellor. We need to see information and evidence about that. I would like to work with the other members of the all-party group and the Minister in any meetings that we are able to have, whether they are with the Secretary of State for Business, Innovation and Skills or indeed with Treasury Ministers, so that we can get past the difficulties between Departments that the right hon. Lady referred to.
Nevertheless, I warmly welcome the Minister’s words today and I hope that we can build a working relationship in the future.
Question put and agreed to.
Regional Support for the Arts
[Andrew Rosindell in the Chair]
The Speaker’s Commission on Digital Democracy recommended the use of regular digital public discussion forums to inform debates held in Westminster Hall. A digital debate has taken place on Twitter, ahead of this debate on regional support for the arts. For that reason, Mr Speaker has agreed that for this debate members of the public can use handheld electronic devices in the Public Gallery. Photos, however, must not be taken.
I beg to move,
That this House has considered regional support for the arts.
It is a pleasure to open this debate, Mr Rosindell, particularly as you are in the Chair. As you rightly said, this afternoon’s debate follows the second ever parliamentary digital debate, which began on social media yesterday. Appropriately, the debate enabled Twitter followers from regional arts organisations, and enthusiasts throughout the country, to discuss the arts outside London in our great regional cities and market towns, and in the countryside. They discussed how we can fairly distribute what Government funding there is throughout the British Isles, whether from the Arts Council, the lottery, or direct grants from the Department for Culture, Media and Sport, to ensure greater equity and access to the arts. They also debated how to redress the parlous financial position of some local museums, theatres, heritage sites and cultural groups, which some of those participating in that Twitter debate raised with us. The House of Commons authorities inform me that 250 people took part in that debate, which reached 1.2 million Twitter accounts.
Will my hon. Friend say what hashtag was used for the debate, so that those of us participating in today’s debate can look at some of the tweets?
It is #artsfunding. That was not my decision; it was set by the House of Commons. I thank everyone who took part in that debate for their contributions. I will mention as many of the points raised as I can.
The point that came across clearly was that arts organisations have never been under greater pressure to change than they are today. Whether we like it or not, state funding for museums, galleries, and perhaps for the wider arts as well, is in serious and probably perpetual decline. The imperative to continue reducing the deficit, the ambition to achieve a budget surplus in the years ahead and the prioritisation, rightly, of health, education, defence and international development, all of which I personally support, suggest that arts funding from central Government will continue to decline in this Parliament—and would have done whichever political party won the general election. We will find out by how much in the months to come.
This is a major change from just a decade ago. Then, arts organisations across the country were able to rely on steady financial support from Government and were, to some extent at least—although no doubt it did not feel like this at the time—shielded from having to ask the more uncomfortable questions about how they operated and how to distribute resources equitably across the country.
I thank the hon. Gentleman. I was, I guess, referring to England and Wales, but the hon. Gentleman’s presence is much appreciated and he has provided an important clarification.
I emphasise my earlier remark about difficulties in the regions and particularly the importance of London, which came across clearly in the Twitter debate. The relationship between London and the rest of the United Kingdom with regard to the arts is one of positive interdependence; there was no tit for tat in our debate yesterday between London and the rest of the country.
Last year, three of the world’s 10 most visited museums were in London and the number of visitors to each is increasing. The British Museum welcomed almost 7 million visitors. Even those of us representing constituencies far from London, whose constituents perhaps only visit the capital a few times a year at best, can agree that that is a tremendous achievement—one no doubt connected to this Government’s decision to retain the decision of a previous Government to maintain free access to the national collections. At about £50 million, that is a substantial contribution of public funds, yet one can see its benefits: in England, visitors to the national museums have risen from just over 7 million in 2000-01, when free entry was introduced, to around 20 million today. As one individual mentioned in our Twitter debate, many of those are foreign tourists. In the present financial climate, one could seriously question why we do not charge foreign nationals, and perhaps non-European Union nationals, as required, and ring-fence that money specifically to spend in the regions of the United Kingdom.
There is no point in having free entry to some of our greatest museums if people cannot get to them in the first place. The national collections are relatively safe, be they in Edinburgh, Liverpool, Cardiff or London, but the same is not true of the rest of England and Wales—certainly not outside the major regional cities. There is no point knowing that there are great, free museums elsewhere in the country if those close to home charge and are struggling to maintain the quality that they want.
There is an irony for those of us who are regularly in London, whether living or working here as Members of Parliament, because we enjoy the capital’s rich cultural life, often for free. Meanwhile, my constituents in rural Nottinghamshire have incomparably more modest access, and usually for a charge. My children and I can enjoy trips to the Science museum or other wonderful family-friendly institutions when in London, but when we are home in Newark—a town with significant deprivation and an average income of £19,500 per annum—we pay £20 to visit our superb new National Civil War Centre, £30 to see the Magna Carta at Lincoln and £40 for a visit to Belvoir Castle, our nearest major stately home. Those figures are for family visits.
My constituents are not as hard done by as many in the country. Of course, we have Nottingham close by—a city with a vibrant, growing cultural life, whether at the Nottingham Playhouse, Nottingham Contemporary and Nottingham Castle or in the arts supported by Nottingham University; like other universities, that is becoming an increasingly important promoter and facilitator of cultural life, which we should encourage. But the point remains: my constituents have to pay for, and inevitably and invariably have to travel to access, much if not all of the culture they want to see.
A report last year found that total funding from the Arts Council and DCMS was 15 times higher per head of population in London than in the regions. Lords Puttnam and Bragg produced the shocking figures showing that Londoners benefited from £69 spending per head, compared with £4.50 in the rest of England. One could do an even starker calculation, comparing those living in great regional cities such as Manchester, Birmingham or Leeds to smaller cities, market towns and the countryside, including my constituency.
There has been progress. By next year, the Arts Council will have shifted the balance of funding to the national organisations that it supports, so that just over 50% will be located outside London. That is progress. The chief executive of the Arts Council made the welcome announcement a month ago that the amount of lottery funding to bodies outside London would increase from 70% to 75% by the end of 2018. The Arts Council has launched a £32.5 million fund to support arts production, talent and leadership outside London. There have been incentives such as the theatre tax relief, which was welcomed by my local theatre in Nottingham. That relief will help support touring theatre companies. Some of our national institutions, such as the National Gallery and the British Museum, are pioneering regional tours of great works of art, although those are very expensive to put on. The British Museum’s annual report for last year showed the enormous amount of mentoring that it does for curators and those leading regional museums and galleries.
Let us be honest, though: those efforts are comparatively modest. They do not go nearly far enough and are not happening fast enough to redistribute cash and talent. There is a widening gulf between the capital and the great regional cultural centres and the rest, and that pattern is reinforced by private philanthropy. According to the charity Arts and Business, 82% of the £660 million donated in 2012 went to London-based organisations, and that is before the Olympics and the BBC are included. My neighbouring MP, my hon. Friend the Member for Sherwood (Mark Spencer), recently held a debate in this place on the gaping disparity between the BBC’s investment in culture and the creative industries in the midlands and London.
The proportion of Arts Council money spent outside London has been falling for decades, even though every survey concludes what we all know: the average Londoner is no more likely to enjoy the arts than his country cousin. The effect of those trends has been to choke off access to the arts for those in the regions, and especially those in smaller cities and towns and rural areas. It is estimated that two thirds of the country lives outside the readily affordable range of national organisations and museums, and that zone is surely shrinking for those on the lowest incomes, as transport costs rise and rural and local bus routes continue to decline.
At the same time, there has been a huge squeeze on local access to a wide range of artistic and cultural experiences—particularly, as was made clear in our Twitter debate, those provided and supported by local authorities. Many local authorities under financial strain have continued to support their local ecosystem of artistic and cultural organisations, and they deserve great praise. Sometimes that support is simple and low-cost, such as with Newark and Sherwood Council’s provision of free rehearsal space to orchestras and community groups. However, as the recent Select Committee report noted, some councils—including some of the most prominent, such as Westminster City Council—do considerably less, and we should be pushing them to do more.
One could take up the point made by the Select Committee that the provision of culture is not a statutory duty for local authorities. As with library provision in some parts of the country, we must see quality provision and not a tick-box approach to satisfy the law. We have to persuade councils that the arts are essential to the success of their communities, but the problem exists and we need to recognise it: more than half of the local authority museums responding to a recent survey by the Museums Association said that their incomes had fallen very significantly and that their confidence was very low.
Why does the disparity matter? It matters if we believe in a one nation approach—the Prime Minister has spoken eloquently on this—where opportunity is available to all and all our brightest talents are shared with those in the greatest need. It also matters if we believe in rebalancing the United Kingdom and reigniting the fire that drives our regional cities and towns, as the Chancellor has laid out powerfully in the Budget and elsewhere. When we speak of a northern powerhouse, the language evokes the strength of great Victorian cities, all of which invested heavily in museums, theatres and civic architecture. The reality is that there will be no return to Victorian-style vibrant cities in the midlands or the north unless there is a momentous shift in their image and how they are viewed, and that is driven by culture and the arts.
My constituents see their best and brightest employees—and, in particular, their children—vanish to the bright lights of London. Many of us in this House have done exactly the same thing. An English, Welsh or, indeed, Scottish provincial revival must set as its goal turning provincial cities and towns into cultural magnets in which young and old alike want to live and work and in which entrepreneurs want to set up their businesses.
We need a major change in our support for the arts if we are to give those places the attraction and glamour of London or of the many other vibrant places, such as Oxford, Brighton or Cambridge—they are, it has to be said, predominantly in the south-east—that our brightest people are drawn to; often those people never return to their roots, however fond they may be of them. The issue is not about Arts Council funding to the regions rising from 49% to 53%, but about something of a far greater magnitude happening far quicker. We need to move away from the mindset that London’s national museums and performing companies may travel more and the ultimate belief that they can visit the nation or the nation can visit them, but that they are not part of the nation itself.
The hon. Gentleman is making a well-balanced and polite speech, but perhaps we should put some sharpness into the debate. Does he agree that it is completely unacceptable that the Arts Council spends £1 out of every £2 in London? Even with the lottery-funded support for the arts, £1 in every £3 is spent in London. That is not only unfair, but damages access to the arts for people in regional cities, such as Manchester, and their economies. Does he agree that that imbalance is intolerable?
The hon. Gentleman makes a good point. I agree that it is intolerable; it has been for a long time. If there is a growing consensus that we want to redistribute and realign ourselves, to increase the strength and economic vibrancy of our regional cities, then the issue has come of age.
My final point is that regardless of how we distribute the available cash, if we are moving into an era of diminishing Government support for the arts—I do not think this is a party political point—we need to step back and assess how our organisations can adapt and thrive in that new climate. Is it not time for a new strategy for the arts in the regions and for our national institutions? One has only to look to the United States to see some institutions that have survived and thrived with diminished state support. Museums forced to rely on wider public support are inevitably better at outreach, education and community engagement. As the Financial Times noted the other day, the Metropolitan Museum of Art’s YouTube channel has had more than 15 million views. The National Gallery’s channel has had just 600,000 views. American institutions are dramatically better at and more proactive in fundraising, and their Government provide better incentives to give.
Some US institutions embrace more controversial means of operating, such as de-accessioning works of art that will never go on public display, that are duplicates of those already on display or that are of little merit to the public. Those decisions are difficult and mistakes can be made. We have seen some unfortunate examples in the UK recently that have given the idea a bad name, but we need to challenge our institutions to consider such opportunities responsibly, as some other great institutions do, including the Metropolitan Museum of Art. The Government could consider through a review how we might use some of the funding opportunities used by others.
I have spoken to UK museums that would give up their dependence on subsidy and set themselves free from the shackles of the state—believing it easier to raise money from private philanthropy if they did—were the state to do something radical, such as guarantee a bond or gilts to provide them with income or endowments. I return to the example of the Metropolitan Museum of Art, which issued a $250 million bond in January to fund future development. It was given a triple A rating by Moody’s.
The point is that we have a 19th-century view of how to run museums and galleries that just about worked when the state supported them reasonably generously. If those days are over, perhaps we should consider radical options so as to be on the front foot, rather than allowing the institutions to diminish slowly.
The scale of the challenge requires a new approach and strategy for the arts, rather as it did when Jennie Lee produced her original White Paper as the first Arts Minister, but with different, often uncomfortable answers in the 21st century. There are three central questions for this Parliament. First, how can we ensure that the value of the arts in general, whether in London or beyond, is recognised by the Government in future spending decisions and seen as an integral part of our strategy for sustained economic growth, particularly in the regions?
Secondly, with the funding that is or will be available, how can we dramatically and swiftly correct the imbalance between London and the regions to create a one nation cultural policy that places at the heart of what we do access to the arts for economic development, education and wellbeing? Lastly, how can we support, assist and incentivise arts organisations to move with confidence into an era when central Government support is likely to be increasingly limited, but the public appetite for and value of their work, and therefore the opportunities, are growing exponentially?
It is an honour to serve under your chairmanship, Mr Rosindell.
I have always been a strong supporter of the arts. I believe that rounded communities are important for proper education. I support local theatre, and I was delighted to see that there is a parliamentary choir, which I joined and am enjoying very much. I therefore thank the hon. Member for Newark (Robert Jenrick) for securing this debate.
My constituency, Workington in west Cumbria, has a proud history of arts, music and culture. There are a number of excellent organisations in the area that are supported by many dedicated volunteers, to whom I pay tribute today. For example, the Carnegie theatre in Workington was built and opened its doors at the turn of the last century; it holds a special place in the hearts of local people. The Kirkgate Centre in Cockermouth is a unique theatre and arts venue. Run by Kirkgate Arts, it was set up specifically to tackle the social disadvantage that comes from lack of access to arts and community services.
One thing we are good at in west Cumbria is getting arts out into local communities, which is a really important aspect of regional arts funding. Kirkgate Arts delivers “Arts Out West”, west Cumbria’s rural touring arts programme, which brings arts events to local village halls. I have benefited from its visits to my own village on many occasions. Rosehill theatre’s “Rosehill on the Road” programme takes arts into schools, and it recently did a fantastic piece of work collaborating with local schools to bring an opera to the Carnegie theatre. It was just tremendous. People say that opera is not for everyone, but I defy them not to go to see such a production.
Continuing to provide that sort of access to the arts is a real challenge, as my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said. Local arts providers constantly face an uphill struggle for the funding they need. The Carnegie theatre was run by my local council, Allerdale Borough Council, but it has just been passed on to a trust so that it can access funds that the council could no longer provide because of cuts. We need to ensure that our arts facilities in the regions can develop to their full potential and secure long-term stability. That is becoming more and more difficult.
The Kirkgate Centre has great ambitions to broaden its cultural programme so that local communities can benefit even more from the wide range of high-quality performances and events it puts on. It would be much more likely to be able to deliver those ambitions if arts funding were not so disproportionately divided across the country. If there were less of a regional imbalance, areas such as mine would no longer miss out. We need to ensure that access to music and theatre is not just for people who live in big cities; I do not have a big city in my constituency. Everyone needs access to the arts, wherever they live.
Over the past few years, successive Governments, as well as the Arts Council, have acknowledged the serious imbalance in arts funding, but nothing has been done to alleviate it, the argument being that significant new funds would need to be found. As the hon. Member for Newark said, the latest figures on the funds distributed by the Arts Council show an enormous benefit to London per head of population compared with what goes to the regions. That is even further distorted because most of the regional funding goes to cities such as Manchester, not to rural communities like mine.
I am delighted that the new chief executive of the Arts Council, Darren Henley, understands the situation and has said that it should not be allowed to continue. He has pledged a significant shift in how the Arts Council invests its lottery revenue further out into the regions. Nevertheless, I fear that the areas further from the centre, such as west Cumbria, will continue to miss out, because if regional funding is provided, it gets sucked into the bigger cities within a region and does not make it out to more rural areas. We need to ensure that that does not happen.
Cumbria is often overlooked—it is a bit out on a limb, particularly west Cumbria. When he looks at the distribution of funding to the regions, I urge the Minister to work with the Arts Council to consider how we can make sure that all areas of the country are taken into account.
Sitting suspended for a Division in the House.
As I was saying, west Cumbria needs continued access to funding, and I hope we can work to deliver that. I like to think really big for my constituency, so there is something I would like the Minister to consider. Right now, major collections in London are left undisplayed: for example, Turner’s watercolours are just stacked away, and if someone wants to see them they actually have to request permission. Why do we not consider moving some of those undisplayed works, which could be national collections, out of London and into the regions to improve cultural awareness, create jobs, increase tourism and, most of all, ensure cultural accessibility?
Is the hon. Lady aware that a significant percentage of the Government’s secret, undisplayed art collection has gone missing? It is one of the great scandals of the Government—not of the Conservative party in particular, but of the state in general—that we do not know the location of many of those works of art. It is an extraordinary thing.
I was aware that people do not know exactly where all the pieces of art that are catalogued are. I hope that my idea would help to prevent such things from happening in the future. It may even enable the Government to discover some of the lost artefacts.
Leeds, Newcastle and Manchester have all benefited from art being moved out of the capital into the regions, so why not move some to west Cumbria? The west coast of Cumbria will soon benefit from major infrastructure developments, as I am sure the Minister is aware, and with that will come investment in my constituency. Why not use some of that investment to bring about projects such as I describe, which would create a lasting cultural legacy for the area? Will the Minister consider discussing my idea with the museums and galleries to see whether we can consider such a proposal for west Cumbria and perhaps for other areas around the country?
Victoria Borwick will do. It is a delight to welcome you to the Chair for this debate, Mr Rosindell.
I am speaking today as the MP for Kensington, where we have a great number of fantastic museums. I appreciate the sentiments expressed by some of my colleagues earlier, but it is only fair that I should remind people that we have the fantastic Science museum—many Members will have beaten a path to the door to twirl the knobs, press the buttons and enjoy the secrets of the Science museum, particularly given that we want to encourage more teaching of science, engineering and mathematics. We have, of course, Dippy the dinosaur in the Natural History museum, along with a fantastic range of wonderful educational exhibits, which bring natural wonders to the world. Indeed, I believe David Attenborough said the other day when talking to Barack Obama that he had never met a child who was not fascinated by natural history when things were brought to life in that way.
We also have the glories of the Victoria and Albert Museum and the other Kensington museums, along with Kensington palace. In fact, more than 12 million visitors came to the museums in Kensington and Chelsea as a whole last year, so I very much echo the sentiments expressed about how important this industry is to London, not only for teaching our young people about the great and wonderful history and resources that we have, but for being a worldwide centre of attraction whose goal is to bring more people to London. The UK’s cultural sector will continue to flourish only if we treat it as that.
The relationship between London and the rest of the UK on the arts is one of positive interdependence. In a way, we could say that we are selling Britain as a whole when we showcase our international and national museums. People went on the great European tours in the past and brought back fantastic collections of wonderful things. It is fantastic that we should be able to show them not only to our children, but to those who visit from around the world.
That is important, as investment in a single place reaps benefits across the country. As a global city, we rely on our creative relationship with the regions to maintain our mutually beneficial relationship. As hon. Members know, our museums do tour—that is an important point— but we also need to ensure the right level of interdependency, so that people who come to London should also have the opportunity to travel further afield. However, it could be argued—depending on how the maths are done—that if funding is calculated by visit, arts funding for London is lower than for other regions.
Therefore, I want to continue to maintain London’s importance as a centre of culture, and not only in our museums and our arts. Speaking, if I may, as the president of the British Antique Dealers Association, I also want to draw attention to all of London’s arts, antiques and creative industries. It is a global hub: we import and export, mostly through London, but there are more than 7,000 art and antique dealers throughout the country, offering employment to thousands. As part of our overall sector, it is important that we should all work together, but obviously it up to me as the MP for Kensington to encourage everybody to continue to visit the wonderful museums that we have on our doorstep.
It is a pleasure to speak as the Scottish National party spokesperson on culture, media and sport. I thank the hon. Member for Newark (Robert Jenrick) for kicking the debate off—I am not sure that is exactly the right expression, but—
Thank you. You are too kind, sir.
I thank the hon. Member for Newark for initiating this fascinating debate. We have seen a flowering of arts in Scotland since the restoration of the Scottish Parliament, and we find ourselves in a much healthier position than much of England. The truth is—as several in the debate have said—that there is a sharp contrast between the position in London and the position in much of England, which is poorly served by the Department and by Arts Council England. As the Minister will know, the arts in London are funded to the tune of £69 per head, but for the rest of England the figure is £4.58 per head—a truly shocking disparity. That might be great for metropolitan Members on the Tory Front Bench, but it is not so great for the rest of England.
Creative Scotland and Arts Council England fund the arts with grants from their respective Governments, so let me give hon. Members some financial facts. Creative Scotland spends £91.2 million; the Arts Council spends £615 million. Scotland comprises only 8% of the population, so we punch well above our weight, spending nearly 15% of the total UK tally. Next year’s Scottish Government draft budget on culture is up £150 million on this year, whereas in England the Arts Council’s budget has fallen by one third since 2010. In this financial year, Scottish local authorities put £631 million—5.3% of revenue expenditure—into culture. In England, local authorities spend only 2.3%. In fact, the English local authorities are being crushed because of their ever-decreasing budgets. Westminster City Council and Somerset County Council have axed their arts budgets completely.
Arts of course, as everyone knows, are a window into a nation’s soul. It was Alasdair Gray who wrote:
“People who care nothing for their country’s stories and songs…are like people without a past—without a memory—they are half people”.
On that basis, I am delighted to say that Scots are whole people, because the Scottish household survey shows that 91% of Scots took part in cultural activities in the past year and that Scottish public opinion is overwhelmingly behind public funding of the arts. A Creative Scotland survey found that 92% of the population support the proposition that it is
“right that there should be public funding of arts and cultural activities”.
With public support, the Scottish Government have enhanced spending to provide stability for the Royal Scottish National Orchestra, the Scottish Chamber Orchestra, Scottish Ballet, Scottish Opera and the National Theatre of Scotland, and to guarantee free access to our national collections. But alas, DCMS cuts have resulted in 11% real-terms reductions to English National Opera and 15% reductions for Opera North.
In Scotland, with more than 200 cultural festivals a year, a national youth arts strategy for investing in the future and the glorious Edinburgh festival, we feel that we are in a strong position and are going from strength to strength. The arts are at the core of national life for many. However, arts and arts funding are of course not just about a national feel-good factor; there are practical benefits too. Creative Scotland found that the arts and creative industries in Scotland generate 130,000 jobs. That is in a country of only 5 million people, with a £12.5 billion turnover. That is huge.
I do not want to labour the point, but I will conclude by saying that we in Scotland are very much at odds with the Conservative Government’s sadly rather philistine approach to the arts at every level. For philosophical and cultural reasons, and for practical reasons in terms of generating jobs and money, we intend to carry on investing in the arts. They are too crucial not to.
It is a great pleasure to serve under your chairmanship, Mr Rosindell. I thank the hon. Member for Newark (Robert Jenrick) for securing what has been an excellent debate. He made the point that although it is not a question of London versus the rest, there are important issues about how the arts are funded outside London and the metropolitan areas. He spoke with passion about the need for a provincial revival in the arts, and mentioned the great new Labour innovation of free access to museums. He even mentioned Jennie Lee, which of course was music to many people’s ears. It was a very good speech.
I congratulate my very musical hon. Friend the Member for Workington (Sue Hayman). There are not too many Members who walk through the Division Lobbies with copies of “Zadok the Priest” and suchlike. She spoke interestingly about the dedication of volunteers and about the Carnegie theatre in her constituency. A number of us will have examples of Carnegie-type philanthropy in our constituencies, and that is an interesting model for the encouragement of more philanthropy outside metropolitan areas. My hon. Friend’s speech was excellent, with many great ideas for west Cumbria.
The hon. Member for Kensington (Victoria Borwick) made a strong speech in support of the museums in her constituency and understandably put the case for London. We should of course have arts for all, not just the few. We are all proud of our outstanding London institutions, but the debate has highlighted the need for proper funding for the regions, too—the simple principle that everyone in the United Kingdom should be able to experience and participate in excellent cultural and artistic activities. We can all think of examples, and I would not want to forget the Rhos male voice choir’s tremendous victory on Saturday in the Llangollen international musical eisteddfod in my constituency, coming as it did on the back of three national eisteddfod victories. Incidentally, those victories were all secured while I was their Member of Parliament, although I suspect that that had nothing to do with it.
Sometimes we may feel that not only have the Government ignored and neglected the arts community; they have done nothing for the arts in regions that have suffered from Arts Council budget cuts and from the sustained squeeze on local authority funding. The Select Committee on Culture, Media and Sport, which the Culture Secretary chaired, recognised:
“London has long received a disproportionate share of arts funding”.
Arts Council budgets and direct spending from the Department for Culture, Media and Sport go disproportionately to London, so arts outside the capital, in the regions and nations of the UK, need more support. The challenge is to rebalance without damaging the cultural super-cluster of London. Our vibrant arts institutions in London must thrive, but more needs to be done to improve provision across the country.
What are the sources, then, of arts funding? The biggest subsidisers of art are the artists themselves, who often work for little or nothing, for love of the art. Apart from that, the sources are national and local government, sales and philanthropy. The figure for giving to the arts by individual philanthropists that goes to London-based organisations is variously quoted as around 82% to 90%. When the Government started cutting arts budgets, they set up the Catalyst Arts programme to strengthen the sector’s fundraising experience. The rather forlorn hope was that increased private giving would compensate for the cuts. I think we all know that it has not. Unfortunately for the regions, funding from that programme has gone disproportionately to London.
I want to talk now about national funding. In October 2013, a group of regional arts professionals produced a report called “Rebalancing Our Cultural Capital”, which detailed the distribution of DCMS, Arts Council England and lottery money between London and the rest of the country. It said that Londoners got £70 per head each year in funding from DCMS and through Arts Council England, and the rest of the country got only £4.60 per head. That is a ratio of 14:1. Arts Council England announced its funding distribution for the period 2015 to 2018, and the balance for funded organisations—national portfolio organisations—will be 53% outside London and 47% in London. That is only a 2% shift since the period 2012 to 2015.
Lottery funding for the arts is spent 70% outside London and 30% in London. In his first speech, Darren Henley, the chief executive of Arts Council England, announced that he aimed to increase the 70% figure to 75% by the end of 2018. That is all welcome, but it feels like small beer. Nevertheless, the Arts Council has woken up to the problem and is slowly changing. It should be congratulated on doing so in the face of what could be considered neglect and a little forgetfulness, to say the least—if not ignorance—on the part of the current Government.
As to the lottery, there should be more transparency about where its tickets are bought. I know that some people feel that tickets bought in poor areas are subsidising arts in rich areas. In reality, that suspicion will be dispelled only by the disinfectant of sunlight. We need more transparency, without treading on commercial sensitivity and harming business. It is perfectly possible to do that, and it is the right thing to do.
Direct funding from the DCMS often goes disproportionately to institutions in London. The National Gallery, the British Museum, the Tate and so on are hugely important to our country, and they are one of the things that make London the great cultural super-cluster that it is today. The city attracts millions of tourists, and those places are fantastic and preserve the cultural inheritance of our wider country. Thanks to Labour’s introduction of free entry to museums in 2001, that inheritance is open to everyone. Visitor numbers at some museums have rocketed up by more than 250%. We are justifiably proud of that as a nation. Nevertheless, the money goes disproportionately to London. That can even lead to the absurd situation of Conservative councils in the capital spending nothing—literally nothing —on the arts, while enjoying museums and galleries paid for by the nation.
All that means that in many areas of the country the only public funding for the arts comes from local authorities. The junior Minister present is often very polite in what he says, but even he sometimes blames the neglect of regional arts on local councils. Why does he not talk to his colleagues in the Department for Communities and Local Government, let alone the councils themselves? Why has he not offered help to local councils making these difficult decisions? Why have Government cuts to local government fallen so disproportionately on the most deprived in our country? I know he will have a lot to say about that in his summing up.
I am sure that the Minister will talk about a few million pounds for pet projects here or there. In fact, we have grown used to the cultural baubles that get thrown into the autumn statements and Budgets. The problem is that the Chancellor sometimes likes to give with one hand while taking far more with the other. He likes to give money for cherry-picked projects while cutting local authority and Arts Council funding. Sometimes he likes to choose who gets the arts funding and who does not, sidelining the Arts Council and local people. That is clearly a problem.
We know that the junior Minister does his best—he gets to a fair number of gallery openings and other events —but sometimes one wonders whether he is ignored by the rest of his Government, with the Education Secretary notoriously warning that for children to study arts subjects could
“hold them back for the rest of their lives”.
She is giving a speech at the Creative Industries Federation event tomorrow morning, and I suspect that she has a bit to apologise for. Indeed, we wondered whether she was scared in some way of her Government’s record. There is currently no formal requirement for arts and culture education in schools, which is deeply concerning. A number of schemes introduced by the Labour Government to improve access have been cut, which has led to the number of primary school children taking part in music, for example, dropping from 55% in 2010 to 36% in 2013.
If we go back in history, we remember the story—it is one of my favourites—of the young George Frideric Handel going into his attic to learn to play the clavichord, because his father did not want him to become a musician. The young Handel managed to learn and do rather well—it came, I suppose, from being a musical prodigy—but most of us are not musical prodigies. Children need to experience and participate in culture and creativity to foster the next generation of creatives, audiences and citizens. However, the Conservatives’ narrowing of the curriculum has led to state school pupils taking fewer art and design subjects. We need Government action, because the alternative is to presume that everyone is a Handel-style prodigy.
This ripples up the rest of the chain, harming the whole of the workforce and the economy. There were only 1,000 apprenticeship starts in the creative industries in 2013-14—the lowest of all sectors, despite it being one of the fastest growing in our economy. For this Government do not govern in the interests of the whole nation; they are not really “one nation”. What many of us fear is a society where some people have access to culture and others do not—that is deeply damaging—and where some areas have world-class museums while contributing little or nothing and others have nothing but the Chancellor’s whim. That is not only unfair; it is holding us back. It is holding back the fastest growing part of our economy, limiting the well-paid, rewarding jobs of the future and diminishing our voice on the world stage. I urge this Minister and the Government of which he is a part to live up to the rhetoric and do more to provide regional support for the arts.
It is a great pleasure to appear under your chairmanship, Mr Rosindell. Obviously you do not have a chance to participate in the debate, otherwise we could have heard your words of wisdom on the cultural assets of Romford—I gather that the Brookside theatre there is successful. I would also have wanted to hear more from you about the Offset music festival, which I am sure you attend regularly. It has included bands such as the London art punks Wire and Gang of Four, which many of us will remember from our childhoods. It is a pleasure to know that they are still playing.
I thank my hon. Friend the Member for Newark (Robert Jenrick) for initiating this important debate. What unites us across party barriers is that there are those of us who are passionate about the arts. I am delighted that my hon. Friend is a member of my own party, but I am also delighted to spend time and associate with members of all parties who care about the arts, because we should band together. It should not be left to one, small junior Minister to fight the case for the arts; we should all, from all parties, work together to fight for the arts, regardless of the colour of the party. Indeed, we do not debate the arts often enough in this place. I remember only one official Opposition debate on the arts in the previous Parliament—as a new Opposition emerges, perhaps we will see more official Opposition debates in the main Chamber in the years to come—and only one or two in this hallowed Chamber.
We had some valuable contributions from the new Member—a Lady Member indeed, because that is her title—my hon. Friend the Member for Kensington (Victoria Borwick). She represents some of our finest national museums, so it is right and proper for her to be in the Chamber. She made an excellent speech. The hon. Member for Workington (Sue Hayman) sings in her local choir and her daughter helps out at the local arts centre. She, too, has displayed her passion for the arts. I will come on to her proposal in the body of my speech.
As usual, there were excellent speeches from the official spokespersons, the hon. Members for East Dunbartonshire (John Nicolson) and for Clwyd South (Susan Elan Jones). I hate to sound as though I am appearing in “Groundhog Day”, but we had a debate yesterday when I accused the hon. Lady of a mild case of chutzpah, and I will make the same accusation again during the course of my remarks.
I was excited to discover that this was one of the first digital debates. I do not know whether it is the very first or whether there have been others. It passed me by that this was a digital debate, and no one told me about a vigorous debate on Twitter yesterday, in which I would have happily participated. However, I obviously reviewed yesterday’s tweets and very illuminating they were. One of the great advantages of a Twitter debate is that people live tweet it as we speak, so should I fail to take note of some of the pertinent points made, I can follow them up on Twitter—in particular the points of @MarDixon, who has been live tweeting the debate from the Public Gallery. So far I have only featured in a discussion about whether I should be given a hug or be on her Christmas card list. No doubt I will feature prominently now that I am on my feet and able to make the points that I wish to make.
Over the past five years, arts funding has been an important issue. I am pleased that we in this Government have done our best to protect funding for the arts, because we are passionate about and strong supporters of the arts. We have had to reduce the grant in aid available to the Arts Council, because we had to make tough decisions as a result of the state of the economy left by the previous Labour Government and our need to tackle the deficit, but I hasten to say that we have tried to make the savings where we can and in an intelligent and thoughtful way. For example, we have reduced the central costs of the Arts Council and we had to stop some programmes, such as Creative Partnerships, which were initiated by the previous Labour Government and foisted on the Arts Council. My focus has always been to ensure that we have secured as far as possible the grant in aid available to arts organisations from the Arts Council. On the whole, we have succeeded in doing so.
What is never mentioned, but should be, is that our first decision as a new Government was to rebalance lottery funding to restore the cuts that the previous Labour Government had imposed on heritage and the arts, taking them from a 16% funding share to a 20% one —a significant uplift—and so making something like £150 million a year available to the arts and a similar sum to heritage. National lottery funding goes to arts institutions in Scotland as well, which will be relevant to the hon. Member for East Dunbartonshire, as it has helped to lay the foundations of the success he talked about. We have also tried to protect the national funding of museums and secured much lower funding reductions than some other Government Departments, thanks to the advocacy of successive passionate Secretaries of State. I posit that the casual, lazy, characterisation of swingeing art cuts is seen to be very far from the truth when the figures are analysed.
The trouble we face when debating the arts is summed up by that famous phrase, “Lies, damned lies and statistics”. It is possible to put the statistics in such a way that it looks like all the funding goes to London, but that is far from the truth. Take, for example, our national museums, which take up roughly 50% of the overall spending envelope for the arts. We look at the postcode of the Victoria and Albert museum and of the Natural History museum, and think that all that funding is going to a very small part of London, ably represented by my hon. Friend the Member for Kensington. But the Tate, for example, is also in St Ives and in Liverpool; the Royal Armouries, a national museum, is in Leeds. We have the national museums in Liverpool; the Museum of Science and Industry is in Manchester, the National Media museum is in Bradford and the National Railway museum is in York. The V&A is opening a new space in Dundee, in one of the most exciting current architectural projects, as well as one of the most exciting new spaces opening for the arts. Many of our national museums have physical spaces outside London; many also have strong partnerships with museums outside London. Only recently, for example, the V&A was instrumental in helping us to save the important Wedgwood collection just outside Stoke.
My hon. Friend the Member for Newark introduced the debate very ably. I campaigned for him in Newark and am glad he was elected and then re-elected. He has extensive experience in this field, having worked at Christie’s. In the short time he has been in this place—I hope this does not sound patronising—he has made a massive impact in terms of the international work of our arts institutions in protecting antiquities abroad, particularly in war-torn regions such as Iraq, where he has been instrumental in moving Government policy on towards greater funding for cultural protection. His tone and remarks today have shown he will be an important voice in arts policy before his inevitable promotion to Minister—although for selfish reasons, I hope he is not made Culture Minister.
Our national museums clearly play a role throughout the whole UK. There is the debate about regional funding and whether too much Arts Council money goes to organisations based in London and not enough to those based outside it. Again, I do not wish in any way to belittle that debate, but rather I want to rebalance it. Approximately half the arts organisations based in London—that is, those with a London postcode—that get Arts Council grants work, tour and exhibit outside London. The most recent example that comes to my mind, because I met them in Ipswich, is the Talawa theatre company, a black theatre company that does fantastic work. Its headquarters is in London, but it tours. We need to get away from the idea that because an organisation has a London postcode, all its work will be in London.
Simply holding this debate could give the impression of a barren wasteland outside London. Nothing could be further from the truth. If we visit any major city or town in England, we will see a vibrant arts scene. I was recently in Sheffield, where I visited the Crucible and Museums Sheffield, two fantastic organisations working very closely together. In Yorkshire, there is the Yorkshire sculpture park; in Bristol and Birmingham, there are vibrant arts organisations. In the last debate we had on the arts in this Chamber, a lot of colleagues lined up to express their criticisms of Government policy, yet inevitably all their speeches extolled the virtues of the cultural organisations in their constituencies. The arts scene outside London is extraordinarily vibrant, and long may it remain so.
None the less, the Arts Council, quite rightly, is focusing on rebalancing its funding. Darren Henley is the chief executive of the Arts Council—as @MarDixon has tweeted during the debate, his ears must be burning. He made his first speech in the role in Hull—an important fact, as Hull is the city of culture in 2017. We have maintained the successful cities of culture programme begun during the last Labour Government by one of the four people now contending for the Labour leadership. Although I do not think that any of the four will be any good, it would be nice if the Labour party was led by a former Culture Secretary. The scheme worked incredibly well in Derry/Londonderry and will work well in Hull. It galvanised a lot of other places into looking at whether they could get city of culture status; simply by applying, those places renewed their focus on their cultural assets. Mr Henley has announced the ambition for excellence scheme, a new £35 million funding programme to support talent, excellence, leadership and ambition across the arts. The vast majority of that money will be spent outside London. The previous chief executive, Alan Davey, announced the creative people and places scheme, another £30-odd million scheme, the majority of which has been spent outside London. Mr Henley has made it clear that 75% of all lottery funding from now on should go outside London.
That is a massive shift from the situation under the last Labour Government, when less than half of national lottery funding went to organisations outside London. Perhaps that is why I use the word “chutzpah” when referring to the speech by the hon. Member for Clwyd South. I do not think we need to take lessons from a party that spent the majority of funding in London and, indeed, was quick in the run-up to the general election to tweet—tweeting is a theme of our debate—its support for future arts cuts. Having seen Newcastle City Council plan to cut all its arts funding and reverse the decision only after a great hue and cry, I do not think we need to take any lessons from the Labour party.
It is possible for the debate on the arts to look simply at grant in aid and funding, and not look at some of the innovations we have introduced. For example, we have introduced catalyst funding to encourage philanthropy and donations both within and outside London, and have put in place match funding programmes. We will publish an evaluation of the scheme shortly, which I think will show some significant success. We have introduced tax credits for theatre, which have already had a major impact. The tax credits for orchestras will come into play next year. The tax credits for theatre are for touring theatre, so will ensure that all parts of the country benefit from the productions they support.
Technology will play an important part in spreading culture. One has to choose one’s words carefully—I do not want somehow to give the impression that crumbs are being given from the table—but my constituents go to see screenings from, say, the Royal Opera House in the cinema, and they think that is the most fantastic thing. It is a different experience from being in the opera house but is equally enjoyable in its own way. That is a very good way of ensuring that culture from some of the leading arts organisations in the country can get out there. That applies to anything, from the grandest opera production to the simplest theatre production, and it is a great way of ensuring that the production can escape its physical boundaries and reach as many people as possible.
I am also interested in how we use technology in our education system and in the pilots getting under way between TES Global, which is the digital arm of The Times Educational Supplement, and museums, so that some of their collections can be used by teachers as a teaching resource. That is a real partnership between teachers, who know how to teach and engage their pupils, and museums, which know about curation and the objects in their care.
I should say a word about education, because, of course, we have done a lot to support culture education. The hon. Member for Clwyd South was kind to note that the Secretary of State for Education will be speaking to the Creative Industries Federation, where she will reinforce her support for arts education. As hon. Members know, the Education Secretary gave a very important speech about science education, making the point that although arts education was in itself fantastic, we should not neglect science and technology education. For some reason, some people have—I would hate to say “deliberately”—misinterpreted that as an attack on arts education. They seem to think that we live in a binary world where, if we praise the sciences, we are somehow denigrating the arts. Nothing could be further from the truth, but my right hon. Friend will reinforce her support for arts education tomorrow.
It may be that words will be enough, but by your deeds shall ye be judged. Of course, one of the great successes that we had in the last Parliament, working with the Department for Education, was to ring-fence music education funding and ensure that it was transparent, clear and secure for local authorities to incorporate the In Harmony programme, which was started by the last Labour Government but has now been put on a secure footing so that it can continue. It is interesting that the Liverpool In Harmony programme just had its sixth anniversary, and the enthusiasm that can be seen on Twitter and the massive impact that the scheme is having in Liverpool is really fantastic.
Not only that, but in the last Parliament, the Department for Education increased the amount of funding going to music education. It has also supported other programmes such as the museums and schools programme and the heritage schools programme, which are new initiatives to get heritage and museums centre stage in our schools. The Department for Education is an absolutely fantastic partner in all the work that I do as a junior Minister, standing up for the arts with its support. Those are important points.
We are planning to publish a White Paper at the end of this year or the beginning of the next, looking at the arts and heritage, and it is important to recognise what we have done in heritage. We have given £90 million to English Heritage to help it restore all its buildings and to create a new charity that will be set free from the constraints of Government bureaucracy. The need to give freedoms was a point made strongly by my hon. Friend the Member for Newark in his opening remarks, and we have given our national museums more freedoms to borrow and be flexible in how they go about their work. More freedom will be transformative for English Heritage.
The White Paper will look at an idea that I am fascinated by, which is place making. One of the problems in arts funding is that we tend to look at it in silos: how much is this theatre getting? How much is this dance company getting? Even in a small town or city, a lot of arts organisations do not talk to each other and do not see how the whole can be greater than the sum of the parts. We need to put culture at the centre of place making. That is what makes the place someone lives in, grows up in and works in a wonderful place to be, whether they are working, retired or visiting. I think that will be very important, and it will give us a platform to formalise our relationship with other Government Departments. The Department for Education is fantastic, and we need to work more closely with the Department for Communities and Local Government, with the Department for International Development, and with the Department of Health in particular, because we know the incredible impact that the arts can have on health.
One other idea that I am interested in, which I hope the hon. Member for Workington will help me with—this has become a mild obsession of mine—is museum storage. I am obsessed by museum storage—I am also obsessed by radio spectrum, but that is another matter—and the reason is that I echo her sentiments, up to a point. By the way, I am planning to go on beyond 4 o’clock because of the Division; is that all right, Mr Rosindell?
The reason that a lot of objects are in storage is for preservation. Sometimes a Turner watercolour will be kept in storage because it is not sensible to have a Turner watercolour on display permanently, given that it is a fragile and important cultural object. However, lots of objects are in storage, and I want to transform museum storage—I will need the hon. Lady’s help, because I am only a junior Minister—and I want to have big centres outside London. For example, there is Wroughton in Swindon or Boston Spa in Yorkshire, where the Science Museum and the British Library respectively have huge storage facilities. There are also areas such as Cumbria, with fantastic local MPs who are keen to campaign to see more cultural assets in their area, and Thurrock, where the Royal Opera House has its stage and set design facilities. Would it not be brilliant if we could set up storage centres outside London? That is tick-box one. However, can we not go further and make them centres of excellence? For example, they could be centres for digital curation, so Boston Spa could become a centre of digital excellence for the preservation and digitisation of print material.
Thirdly, and most crucially—and where I let out a mini cheer when the hon. Lady was speaking—we could make them accessible to the public. That obviously comes with a cost and we would not necessarily make them accessible 24 hours a day or even seven days a week. There is something really exciting and enjoyable about visiting a museum storage site—I know that I am now beginning to sound slightly odd—because it is so informal and people feel like they are on their own voyage of discovery. I go on a lot of regional tours and I remember that, when I went to Liverpool, my private secretary said to me that it was the best trip that she had had, because we went round the stores of the National Museums Liverpool. It was exciting to be able to look in nooks and crannies. I want to bring out that informality and accessibility and build national storage sites all around the UK. I have decided to go public on that in this debate because I have been moved by the hon. Lady, and because I think it is about time that we started debating the issue in public. I have asked people to come to me to talk about the White Paper and about their ideas.
I am sorry that I have not been pugilistic and battered the Opposition on these issues, and defended the Government’s record vigorously. I think the Government’s record speaks for itself. We have never seen a more vibrant arts scene in the UK or more vibrant creative industries. The hon. Member for East Dunbartonshire talked about the incredibly generous funding in Scotland and it is, of course, possible to elide the figures. We remember the terrible, tortuous birth of Creative Scotland, with resignations left, right and centre, but it remains one pot, so if he is going to compare Creative Scotland to the Arts Council, he also has to include Creative England and the British Film Institute.
However, I do not want to divide us. I hope that the hon. Gentleman and I will go together to see the Celtic exhibition that the British Museum and the National Gallery of Scotland are jointly putting on. Perhaps one lunchtime, when the Titians are in London, we can wander up and look at these two wonderful paintings, jointly owned by the peoples of Scotland and England, and reflect on this great Union, brought together by a shared culture and a passion for this great United Kingdom—a passion I know that you share, Mr Rosindell, in your daily life, celebrating this wonderful country of nations. I did not go on beyond 4 o’clock after all.
Thank you for your chairmanship, Mr Rosindell, and all Members for being here today. I am very grateful for their many contributions and to the Minister, who was entertaining and eloquent as always. It was very interesting to hear about his obsession with storage. From my days at Christie’s, I remember that the best place to take the most valuable clients was the stores, because that always excited them more than the carefully manicured halls. I look forward to seeing that develop in the weeks and months to come.
This has been an important debate. It was important to have it at the start of the Parliament and to say to the many people throughout the country who are passionate enthusiasts of the arts and work in arts organisations that Parliament is interested in what they do and care about, and that we will pursue this issue for the rest of the Parliament. I thank everyone who participated in the debate and particularly the 250 people who participated in our digital debate and the allegedly 1.2 million people who followed it on their Twitter accounts.
Question put and agreed to.
That this House has considered regional support for the arts.
Bank Closures (Northern Lincolnshire)
[Philip Davies in the Chair]
I beg to move,
That this House has considered bank closures in Northern Lincolnshire.
It is, as always, a pleasure to serve under your chairmanship, Mr Davies. I sought this debate because our high street banks are reducing the service that they give to my constituency and the neighbouring constituency of Gainsborough. My hon. Friend the Member for Gainsborough (Sir Edward Leigh) has asked for his name to be associated with my comments. Unfortunately, a diary clash prevented his being here.
It might be helpful if I give a brief outline of Barton-upon-Humber, which is the northernmost part of my constituency. That market town is being affected by two bank closures. Both HSBC and NatWest have announced that they are closing their local branch; the NatWest one will close on 20 August and the HSBC one in early September. Barton-upon-Humber is a long-established trading town, situated on the southern bank of the River Humber. It has held some significance from as long ago as Saxon times. It has developed into what I think it is fair to say is a typical market town. The banks have announced the closures at a time when the population is increasing and there is a real boost to the local economy, wrought in part by the reductions made by the coalition Government in the Humber bridge tolls, which have made journeys between the northern bank and the Barton area much more accessible.
When we talk of a high street, we have a vision of a cluster of small shops—butchers, bakers, newsagents and so on—but they are always supplemented by the local solicitor’s office, perhaps an insurance broker and, of course, our high street banks. They come together and provide the essential ingredients of a thriving local economy, not just in our provincial towns but—perhaps even more so—in our market towns.
Barton-upon-Humber is one such place. Three years ago, it suffered a major setback when the Kimberly-Clark factory closed. That resulted in more than 500 job losses but, thankfully, Wren Kitchens took over the factory and it is now a thriving commercial enterprise, employing almost as many people as when Kimberly-Clark had it and with the prospect of yet more jobs in the pipeline. As I mentioned, the reduction in the Humber bridge tolls has been a real boost to the local economy, but the offshore renewables sector, based around the ports of Immingham and Killingholme, has made Barton very much an expanding town. More residents equal more potential customers, whatever the business—or so people would think. That will not be so at our high street banks, NatWest and HSBC, which, as I said, have recently announced the closure of their branches.
Of course, we all recognise that banking has changed, particularly for the personal customer, and in that respect most of us are to varying degrees guilty. We want the bank or the bookshop there when it suits us, but for the rest of the time we are tempted by online banking, Amazon or whatever. However, that is no help to our local butcher, newsagent or other trader who wants to offload his takings for the day.
Let me focus on NatWest, as it was the first of the two banks to announce the closure of its branch. Like most high street banks, it occupies a major building in the marketplace in Barton. It has been there since 1913. The announcement came as a major disappointment to the community: private customers and, as I have mentioned, small businesses. Older residents in particular feel it as a blow. Once again, personal contact is being taken away from a commercial transaction. Local people, of course, are concerned that this might be the start of a trend. I am pleased to say that I met officials from Barclays earlier this week and they have given me an assurance that they are not planning any closures—for the moment; that is the big concern of local people.
I mentioned the neighbouring constituency of Gainsborough, where two towns, Caistor and Market Rasen, are affected. For Caistor, it is a particular blow because the NatWest is the last bank in town.
There are more ways than ever to bank. NatWest has provided me with a host of statistics. It says that branch transactions have fallen by 36% in the past five years and mobile transactions have increased by 300%. It states:
“Only 9% of our transactions were undertaken in our branches in 2014, compared to 25% in 2010”.
It goes on to state:
“We know the value of the High Street branch, we have the second largest branch network in the UK, and it will remain the cornerstone of our service to customers.”
How will it remain the cornerstone if it is closed?
Branches are important because, as I mentioned, they provide an opportunity for customers to interact with staff on what may be big life decisions, such as taking out a mortgage or starting a business. Both NatWest and HSBC are very keen to tell me that they are making alternative arrangements with the Post Office. That, of course, is in line with the protocol agreed between the British Bankers Association and the Government earlier this year, but local post offices do not constitute a vast network. As anyone who has queued up in the post office with loads of money from their takings will know—I used to work in Market Rasen and can tell my hon. Friend the Minister that even to go and buy a stamp was a half-hour job—the reality is that post offices are not an ideal alternative.
The British Bankers Association has provided me with a host of information about how banks go about assessing closures. As the Barclays representatives told me yesterday and, indeed, as the HSBC representative told me, this is customer-led—customer-led meaning, of course, that people are moving online or to mobile transactions. I hope that the Minister will be able to give some reassurance that the agreed protocol will be firmed up a little. As I am sure she will appreciate, people are rather cynical about consultation processes. They tend to think that the bank decides on closure and consults on how to go about the closure, not on whether the closure should take place. I hope that the review of the protocol, which is scheduled for a year after it comes into force, will result in its having a few more teeth than has been the case up to now.
The British Bankers Association protocol does go into a fair amount of detail, whereas the Government’s website is a bit thin on the ground when it comes to what should actually be provided. The previous Minister, who is now my hon. Friend the Minister of State at the Department of Energy and Climate Change, said at the time of the protocol’s introduction:
“I’ve received a lot of correspondence from consumers and businesses who are worried about bank closures and the trend in banking services moving online, and I think it is essential that banks continue to take into account the impact of their decisions on their customers.
I therefore welcome the agreement announced today that banks will work more closely with their customers and local communities to minimise the impact of bank closures.”
In other words, it is an acceptance that bank closures will take place. My constituents look to me, and I look to the Government, to be on their side and the side of customers—not on the side of the banks, which are well positioned to take account of themselves.
If we look further at the details from the British Bankers Association, they go on to outline community engagement. Although it happened eventually, NatWest was seemingly somewhat reluctant to meet Barton Town Council. It has now done so, and has also met North Lincolnshire Council. The meeting was to discuss the impact of the closure on the community and customers, and to look at alternative provision. It was not—I repeat not—to discuss whether alternative arrangements could be made, such as mobile banking or reduced opening hours. I look to the Minister to give some reassurance that when the review takes place, she will seek to strengthen the protocol on behalf of my constituents.
Hon. Members across the political spectrum continually speak about the high street and how important it is to maintain a vibrant local economy and support our local shops. If we are to expand our market towns, however, shops need the services of our local banks. Banks, I am afraid, take a rather high-handed attitude. It is easy for us all to slip into the much-favoured habit of criticising bankers, and I accept that we are talking about high street bankers rather than those who have even less public appeal. The reality, however, is that customers, such as the local newsagent, who are looking for services from their bank will easily notice the large profits and the rather generous—to put it kindly—payments to senior directors. If just a little of that were to trickle down into the local branch network, perhaps we could sustain our market towns and small shops to a much greater extent than we have done in the past.
I go back to the Government’s website, which is, as I say, a bit basic when it comes to outlining the protocol. The website states:
“Today’s ground-breaking agreement will make sure customers still have banking services close at hand if a branch closes. Communities will be given fair notice of any closure and clarity about the alternative places and ways to bank. This includes the Post Office, which is an ideal shared service for customers who prefer to use counter services. The agreement will also make sure there is the right support to help customers use internet or mobile banking.”
I have to say that my constituents in Barton have not seen many examples of support for customers when it comes to greater involvement of online banking.
I conclude by appealing once again to the Government to be on the side not only of my constituents in Barton and those in the neighbouring constituency, in Caistor and Market Rasen, but of customers throughout the country who deserve and need a proper high street commercial banking network if high streets and the business community are to survive.
What a pleasure it is to serve under your chairmanship this afternoon, Mr Davies! I congratulate my hon. Friend the Member for Cleethorpes (Martin Vickers) on securing the debate. He has spoken eloquently on behalf of his constituents and communities. He is without a doubt the most diligent and effective Member for Cleethorpes I have ever known.
As my hon. Friend set out, bank branches play an important role in their communities—communities such as Barton-upon-Humber, Caistor and Market Rasen. They are valued by individual consumers and small businesses, and the services that they provide make a real difference to people’s lives. One of my key priorities as Economic Secretary is financial services that deliver for customers. I strongly believe that banks should be there to help and enable customers to achieve their aspirations at every stage of their lives, whether that is saving for their first home, taking out a mortgage, buying a car or saving and investing for the future.
As my hon. Friend mentioned, how we bank is going through a period of unprecedented change. New online and mobile technology means that customers are reducing their use of high street branches. As he mentioned, some banks had pledged not to close a branch if it was the last one in town, but since those pledges were made the volume of transactions in high street branches—including in the last branches in town in places such as Caistor—has continued to decline. Those changes mean that the banking industry, which has to modernise and improve its services to maintain profitability, often has to make tough decisions. They are commercial decisions for the individual institutions, but it is right for the Government to seek to ensure access to banking services for everyone, wherever they live.
We made strong progress on that agenda during the last Parliament. In March this year, the Government welcomed an industry-wide agreement known as the access to banking protocol. I am pleased to say that all the major high street banks agreed to that protocol, which came into effect in May this year. The protocol means that when a bank decides to close a branch, it must think carefully about the consequences of doing so; it must engage with its customers; it must consider the needs of its customers; and it must identify ways for its customers to continue banking after the branch has closed. The results of that engagement with the community and an impact assessment will be made public before the branch is closed. We have also made it easier for my hon. Friend’s constituents in north Lincolnshire to switch their bank accounts, with seven-day switching to one of the banks that remain open.
I appreciate my hon. Friend’s concern about the impact that branch closures will have on shops in local high streets. I assure everyone that the Government are committed to safeguarding high streets and town centres. For example, through the high streets innovation fund we have provided funding to the 100 towns that have the highest rates of empty property. Small business rate relief is also a valuable bonus for high street shops. In March 2015, the vacant share of retail outlets fell to 13%, which is the lowest vacancy rate since 2010.
As well as taking seriously the impact of branch closures on local communities, we must consider how customers will continue to access banking services. A range of alternative measures is in place, and I would like to talk in more detail about some of those measures. As my hon. Friend mentioned, at more than 11,500 of its branches in the UK, the Post Office allows customers to access their bank accounts, check their balances, withdraw money and deposit cash and cheques. Sixteen banks offer services to their personal customers and small businesses through the Post Office, including those that he mentioned. That is a huge network, which offers most customers a real opportunity to continue banking locally.
I know that more can be done, however. The range of services offered by the Post Office may be more limited than those offered in a traditional bank branch, and my hon. Friend has mentioned how popular they are. Service provision may vary by bank and by the capacity of each post office. That is why the Government are supporting measures to improve the banking services that the Post Office offers and to make those services more consistent for customers.
Late last year, the British Bankers Association and the Post Office began negotiations to agree a standard set of services, such as withdrawals, deposits and balance checking. The agreed services will be made available to bank customers at post office counters across the country. The negotiations are ongoing, but I make it clear that the Government consider completion of that work to be a priority. The protocol includes a measure for an independent review after one year, which I hope will indicate whether it has been effective—I will take a close interest in that matter.
We also expect to see concrete progress on publicising the services that are already available. As I have made clear, banks should be there to help their customers achieve their aspirations at every stage of life. We should also recognise that the modernisation of banking services is leading to new opportunities for customers, and we should all be excited about that. Since April 2014, for example, customers have been able to transfer money instantly to another bank account using only their mobile phone number; from 31 July 2016, customers will be able to use their smartphone to photograph cheques for payment into their bank account, helping to make life easier for customers in remote areas. Banks are taking action to ensure that customers are able to use such new and exciting technologies with confidence.
Those innovations also apply to the UK’s ATM network, which can play a more important role in addressing some of the concerns voiced by consumers when their local branch closes. Steady progress is being made in extending the ATM network across the UK, and the number of free-to-use ATMs is at an all-time high. In fact, 97% of withdrawals are now made free of charge. Isolated, disadvantaged and rural communities often have the worst access to free-to-use ATMs, however, so the Government are working closely with the Link network’s financial inclusion programme to subsidise free-to-use cashpoints in more than 1,400 remote and deprived areas across the UK. Importantly, members of the public in my hon. Friend’s constituency can nominate their area for inclusion in that programme.
This debate has focused on branch closures, but it is also important to recognise that many banks are choosing to prioritise their branch network and are opening new high street bank branches, with TSB and Metro bank being good examples. Metro bank is planning to open 150 branches by 2020, and its branches are open seven days a week.
I thank the Minister for the information she has provided. My constituents, and people across the country, would appreciate more opportunities for face-to-face contact. Can she give an assurance that the Government will do all they can to influence the banks to make provision for people who want personal contact? It is one thing for people who are applying for a car loan of a few thousand pounds not to have face-to-face contact, but people who are committing to a mortgage for 25 or 30 years need detailed, experienced advice. It is much easier to provide such advice on a one-to-one basis.
I agree. My hon. Friend will be glad to know that 58% of people agree with both of us that face-to-face contact and having a local branch are important when choosing where to bank and engaging in major transactions. Some banking organisations take the view that they will gain market share by opening new branches. I have mentioned Metro bank, and TSB currently has 630 branches serving 4.5 million customers, which makes it the eighth-largest branch network with 6% of all UK branches. The Government are keen to encourage such healthy competition between different brands, some of which offer a face-to-face banking model.
The Government’s ambition is for 15 new banks to enter the market over the life of this Parliament. If we achieve that, it will give customers far more choice of whom to bank with and encourage banks to compete more effectively with one another. Competition will also continue to drive innovation in the delivery of banking services, such as contactless payment and payment by mobile phone. Atom bank, which recently received its banking licence, is a good example of innovation. It plans to be an online-only organisation and has ambitions to offer a range of innovative services to customers, which could include face-to-face contact through technology, as well as between individuals in the same location.
One often suggested solution is the sharing of bank branches, which would allow banks to lower overheads and maintain local provision when they may otherwise have to close their branches. Of course, each bank must specialise and differentiate itself from its competitors, but that should not prevent the industry from thinking creatively about how premises and services could be shared. The British Bankers Association is currently considering that issue in consultation with its members. In particular, it is exploring where local circumstances may mean that sharing a branch is the best solution.
I understand the concern of communities in northern Lincolnshire about local bank branch closures—my hon. Friend mentioned Barton-upon-Humber, Caistor and Market Rasen—and many communities across the UK, including the one I represent, are experiencing a similar situation. Changes in the banking industry reflect changes to customers’ needs and habits. Banks and building societies need to balance customer interests, market competition and other commercial factors when considering their strategy. It is right that the Government do not intervene in such commercial decisions, but we are clear that banks and building societies should support access to banking services for everyone.
Once again, I congratulate my hon. Friend on raising these important issues today.
Question put and agreed to.
Barking, Havering and Redbridge University Hospitals NHS Trust
I beg to move,
That this House has considered the future of Barking, Havering and Redbridge University Hospitals NHS Trust.
I begin by declaring an interest: I was a patient at Queen’s hospital in January. My operation was cancelled at two hours’ notice, but despite that hiccup I was given excellent treatment a couple of weeks later. I want to place on the record the fact that despite being in a very busy department, the staff were working very well and had excellent morale, as far as I could see during my groggy recovery from my operation.
The Barking, Havering and Redbridge University Hospitals NHS Trust was established in the 1990s. It brings together two acute general hospitals—King George hospital in Ilford in my constituency and Queen’s hospital in Romford, which was a new-build private finance initiative hospital to replace the old church hospital.
Since 2006, there have been many pressures for reorganisation of services in north-east London. There was a misnamed project called “Fit for the Future”, which was scrapped because it was clinically unsound. Since then, there have been proposals that would have meant downgrading services at some hospitals, particularly King George hospital. To cut a long story short, an independent reconfiguration panel looked at the proposals, and eventually, in 2011, the then Secretary of State for Health, Andrew Lansley, gave the go-ahead to close the maternity and accident and emergency services at King George hospital in around two years. The maternity services were reconfigured in early 2013, but A&E is still at King George hospital.
The trust is very big. There are 750,000 people in its catchment and it covers three London boroughs—Barking and Dagenham, Redbridge, and Havering. Havering has an elderly population overall, but Barking and Dagenham and Redbridge have some very young people. There is a churning population, with lots of migrants, from both elsewhere in the UK and many other parts of the world. GP services and primary care services have been poor and inadequate for many years. There have always been pressures on the hospitals and trusts in north-east London. Those pressures have led to accumulated deficits and concerns about the quality of service.
In October 2013, the Care Quality Commission carried out an inspection of the services at the Barking, Havering and Redbridge trust. It concluded that the trust should be put into special measures. The press release put out on December 18 said:
“The NHS Trust Development Authority…today confirmed that Barking, Havering and Redbridge…will be placed into special measures. The move follows the CQC Chief Inspector of Hospital’s report…which concludes that while there have been signs of sustained improvements in some areas, the leadership of the Trust needs support to tackle the scale of the problems it faces. While aware of many of the issues raised by CQC around patient safety and patient care, attempts to address these issues have had insufficient impact.”
As a result, the trust was put into special measures and all the management were got rid of. It took a while to fill the various posts, but an interim chief executive was brought in and other posts were changed. I have been impressed with the chief executive, Matthew Hopkins. He and the team around him are doing their best to improve services in the area. However, fundamental, difficult problems remain.
The CQC’s 2013 report, which led to the involvement of the NHS Trust Development Authority, highlighted a number of areas of concern, and follow-up work was carried out. One underlying issue was the financial crisis, which remains at the trust. A new finance director, Jeff Buggle, was appointed in July last year, although he did not take up his job until December. The press release at the time he was appointed said that the trust had a £38 million deficit, with expenditure of somewhere around £400 million or more in 2013-14. I understand that the target for the deficit this year was £29 million, but that has not been met; the deficit remains at about the level it was a year ago. That is not surprising; the Health Service Journal from June 26 this year has an interesting statement from Richard Douglas, the former director general for finance at the Department of Health. He said that trusts placed in special measures
“tend to exit the regime with a financial position that had deteriorated”.
The reason is that there is so much pressure to improve services that the expenditure must continue.
It is a bit like the situation in Greece: we have an underlying deficit, a temporary troika, or body, comes in to sort out the problems and the trust is put into special measures. Fortunately, we do not have a far-left, far-right coalition running the hospitals. Nevertheless, we face fundamental difficulties.
The special measures, which were called for, have led to a number of changes. I wish to draw attention to the further inspection that the CQC carried out in March, the results of which were published only at the beginning of July. To the disappointment of the new leadership of the trust, the CQC says that BHRT must remain, for the next few months at least, in special measures. The CQC’s latest report says that although improvements have been made in a number of services, many are still rated as requiring improvement. Professor Sir Mike Richards concluded that significant improvement was still required, and therefore there will be a further inspection before the end of the year to see whether other changes have been introduced since that assessment was made in March.
Clearly I do not have time, even in an hour-long debate, to go through the voluminous reports—the general one and the one on each of the hospitals in the trust—but I will refer to some of the main points. I hope the Under-Secretary of State for Health can reassure me on some issues in his response.
First, I want to make it clear that anything I say here is not a criticism of the staff in my local hospitals. They face enormous pressures; we have a trust that faces huge demand and there are huge pressures on it. I will just give some figures. There are just over 1,000 beds in the two hospitals, of which 80 are maternity beds, 32 are critical care beds, and 972 are general and acute beds. There are 73,000 in-patient admissions, 592,000 out-patient attendances and 245,000 emergency department attendances each year. That figure of 245,000 is divided into 97,000 attendances at King George hospital in Ilford, which Andrew Lansley said in 2011 should be closed within about two years, with the rest—nearly 150,000 attendances —at Queen’s hospital in Romford.
Average bed occupancy in the hospitals is consistently around 93%, 94% or 95%. There is almost no flexibility, and my own experience in January of having an operation cancelled at short notice is sadly repeated from time to time. We had a mild winter and yet operations were being cancelled in January. The same pressures will come each year in this area in outer north-east London, which has a young population and rapid population growth.
I will refer to some of the issues affecting the hospitals. I begin by quoting Mike Richards again:
“Despite considerable attention the trust is failing to meet waiting time targets in the emergency department. Outpatients and diagnostics can’t cope with demand and the children’s services do not meet local need.
I am particularly concerned at the large backlog of investigations into serious incidents, which suggests that safety has not been given the priority it requires and lessons are not being learnt as they should.
However, the new executive team has made significant improvement ensuring the overall culture of the trust was more open and transparent making it a much more positive place to work.”
The point I am making is that this trust needs support, and it needs that support to continue for a period of time.
The CQC report asked whether services at the trust were safe, effective and caring. The rating for all three was “Requires improvement”. It asked, “Are services at this trust responsive?” The rating was “Inadequate”, which is the red one on the traffic lights. It asked whether services were well led; the rating was “Requires improvement”. That is the overall rating for the trust—“Requires improvement”—and there are particular concerns about urgent and emergency services.
The CQC report covers a range of different services at the two hospitals, but the essence of the report is that there are major difficulties, and I will refer to just a few of them. First, the report says:
“The service planning for children’s services was not responsive to local needs.”
Secondly, it says:
“The trust faces significant capacity pressures which it has tried to address”.
Thirdly, it says:
“Across all core services there was limited evidence of learning from complaints and concerns being applied to service improvement. We identified areas where complaints response was slow leading to backlogs, lack of action planning and absence of thematic analysis.”
Fourthly—and this is very significant—it says, under the heading “Governance, risk management and quality measurement”:
“Amidst many improvements within the trust since our last inspection, governance, risk management and quality measurement is an area of significant concern as little improvement has been made…Previous cost reduction plans had significantly reduced the infrastructure to support governance and safety.”
This is a trust with a deficit of about £37 million or £38 million, and it has to eliminate that deficit. When it comes out of special measures—as it no doubt will, perhaps in a few months or maybe in a year, depending on what the next inspection says—it will still face these financial pressures. One of the reasons why it has had difficulties is that it has already had to subject itself to those pressures.
The CQC report continues:
“There is a heavy reliance on individuals and the use of short term interim staff.”
Recruitment and retention of staff have been major difficulties, and they have added to the cost pressures.
We face a difficult situation. We have a management—a leadership—who are trying to turn the trust round, and they are doing much better than their predecessors. They face enormous pressures, and those difficulties are perpetuated and even made worse by the cuts in social care at local authorities, the fact that we have inadequate GP services and the fact that many people just present themselves at accident and emergency rather than going to a GP. That is because they have been trying to get an appointment with their GP for two weeks, and, in the case of the Loxford polyclinic in my constituency, they have been phoning for hours but cannot get through because there is a problem with the switchboard. The same problems arise in a more intense way while the trust is dealing with this financial crisis.
What is the way forward? I will speak for just a few more minutes, to allow my colleagues the chance to contribute to the debate. The CQC report carries out a “Friends and Family test”, and I find the results for the trust extremely concerning. In the test, there is an assessment of the different departments. The report says:
“NHS Friends and Family test (July 2014)—average score for urgent and emergency care was 20%, which was worse”—
in fact, considerably worse—
“than the national average of 53%.”
The report continued:
“The average Friends and Family score for inpatients was 73, which is the same as the national average…The Friends and Family score for maternity…was 70, which was better than the England average of 62.”
So it is not all bad news.
However, the urgent and emergency care is a significant problem, yet the Government decided in 2011, based on the independent reconfiguration panel and the CQC report, that the A&E department at King George hospital should be closed and all A&E services should be relocated to Queen’s hospital. Queen’s cannot cope as it is. Consistently, the Queen’s A&E has had worse assessments than the King George A&E. Yet the sword of Damocles is still hanging over the A&E at King George, and there is this mass of 245,000 patients who go to the A&E departments at the two hospitals, which they cannot cope with.
Let us suppose that the assessment in December, or whenever it is, leads to the trust coming out of special measures next year. What will that mean? What will the consequence of that be? I will quote the summary of the CQC report on urgent and emergency services. The “Friends and Family test”, which I have just quoted, said those services were
“showing no signs of improvement over the 12 months prior to the inspection. The hospital had not achieved the national four-hour waiting target of 95% of patients seen within this timeframe for more than a year, and usually averaged around 90% of patients seen within this time. Patients often had waits of four hours or more in the department and were waiting for long periods of time to be moved to an appropriate bed once it has been decided they should be admitted.”
This is the key sentence:
“There was no clarity about the future of the department and when, or if, it might close in the future.”
This has been hanging over my local hospital since 2006. We have fought vigorous community campaigns and the issue is still hanging over it. There is no clarity. If, because of improved management, the situation improves later in the year and the trust comes out of special measures, will that mean—I suspect it will—that there will then be moves to close the A&E at King George because the trust is no longer in special measures? There is not the capacity at Queen’s to deal with that. It will take years, considerable cost, and millions of pounds of investment on the Queen’s hospital site before Queen’s hospital is ready to cope with this situation.
Rather than wasting millions of pounds and causing more difficulties for several years, would it not be better if the sword of Damocles was taken away, thereby ending the uncertainty and lack of clarity mentioned in the CQC report? Then we could deal with the problems of recruiting sufficient specialist doctors and having adequate cover at all times, and maybe work out a plan for a relationship between the two acute and emergency departments whereby there would not be a closure, but perhaps a rethink about how services were run.
Clearly, Queen’s cannot cope today. However, it is still the Government’s plan to close King George. I have asked Ministers about this for several years and the answer has never changed. There is still uncertainty. What will the future of King George be? It is time to end the uncertainty, to give a sense of clarity and, as the trust improves, to take away the threat to close the A&E department at King George.
I congratulate my hon. Friend the Member for Ilford South (Mike Gapes) and join him in commending and thanking the many staff who work under huge pressure in both King George hospital and Queen’s for the very good work they do, which I hear a lot about from my constituents.
I have been involved with BHRUT and its predecessors for over 20 years. I have seen six chief executives and 12 different chairs, men and women. Every new generation blames their predecessors for the problems that they inherit. I am perhaps a little more sceptical than my hon. Friend: I do not think that we have suddenly, magically got a new team that will solve many of the intransigent problems facing that trust. It has been co-operative and is trying hard, but we are now over a year into the new regime, and on many of the indicators I cannot see demonstrable improvements. The trust has been bankrupt for years; the deficit has not gone down for years and I cannot think that it will go down much in the coming period, given the pressures and the failures to deal with some of the intransigent problems.
Quality has been pretty poor for years. We finally got the CQC report that put the trust into special measures, but the most recent report shows that the necessary improvements that I wanted for my constituents and that would take the trust out of special measures have not been made. Although I share my hon. Friend’s hope, I am not confident that we will get there by the time the CQC comes back yet again.
Compared with all other trust areas throughout the country, ours is the eighth most deprived area in terms of health need. The NHS ought to be delivering equal access to high-quality care to people wherever they live, but it is not. I sincerely feel that that is the biggest battle for my constituents. Where I live, I get much better access to much better quality healthcare than my constituents in Barking and Dagenham who use both Queen’s hospital and King George hospital.
I should like some assurances from the Minister about the north-east London sector. Not only are we bankrupt in our neck of the woods, but Barts City—predictably, I have to say—is also in incredible deficit. One knows how these allocations of moneys go and how views are taken about the health service across the country. There is a real danger that salvaging the new Barts hospital, with its £1 billion PFI and the massive call of that on revenue funding there, will come at the expense of BHRUT and the hospital provision that we need locally. I seek assurances from the Minister that, in considering an undoubtedly difficult financial situation across the whole north-east London sector, he does not disadvantage our residents by putting everything into the much more powerful Barts and the Royal London Hospital NHS Trust.
I want to raise three other issues. First, I have been shocked in recent times by how much is spent on agency staff by BHRUT. For example, in 2013-14, it spent £27 million, and in June this year it spent £2.5 million. When Matthew Hopkins gave evidence at the Public Accounts Committee, when we were looking at the state of a number of vulnerable trusts, he talked about a 50% shortage of consultants in the A&E department and told us that he was spending £1,760 on one 16-hour shift of A&E consultants. After that session, I asked a consultant in A&E during one of my usual visits round the hospital whether he was an agency consultant or a full-time employee. He had been a full-time employee, but deliberately switched to being agency staff because as an agency member of staff he earned more and did less. His doing so put the trust in greater difficulties.
That sort of behaviour is simply an unacceptable waste of what we all understand is a very small amount of money that is not enough for local healthcare. According to the CQC’s most recent inspection, a third of the nurses on night duty on the first night of its inspection were agency nurses. I should like the Minister to talk a little bit about how he is going to tackle the use of agency staff, who provide poorer quality care, because they do not know the systems or the people and do not know their way around the hospital, and cost the hospital a lot of money.
Secondly, although I recognise that there have been improvements, particularly in maternity, where we were first alerted to quality really going wrong in Queen’s, on reading the report I was worried about radiology. There is still a huge bill—millions of pounds—to be paid to people now litigating against the hospital because of what happened to the mothers and children through poor maternity care there, but the original CQC report in 2010 highlighted that the radiology department was poor. There were delays in people having scans done and scans were not passed to the relevant consultant, so people with cancer were simply not being diagnosed in a proper, timely manner that would have allowed them to access the treatment they needed. The recent inspection still finds problems there: it is too short-staffed, with too many locums.
One of the incredible things I read was that on one day of the inspections, five radiologists were on leave. What sort of culture does a hospital have if it allows five radiologists to go on leave on the same day and so provides a poor service to patients? There is a large backlog of patients who have waited well over 18 weeks. During the inspection, the CT scanner kept breaking down and patients had to be transferred from Queen’s hospital to King George hospital. That is unacceptable. It is about more than money; it is about a culture in the management that was originally identified in 2010 and now, in 2015, the A&E is still appalling.
I will raise a couple of other issues that I think are relevant and which my hon. Friend alluded to. The first is GP services. If we cannot sort out primary care, demand on acute and hospital services will continue to exceed their ability to respond. Barking and Dagenham has the highest number of GPs aged over 60 in the country: a third of our GPs are over 60. We have been completely open—we will try any experiment on the ground. We have had salaried GPs, private practice GPs and GPs linked to universities in an attempt to provide some training. We will do anything to attract and get more and a better cadre of GPs in our patch, but we have failed. We are still the eighth in London in terms of concentration of single-person practices. I raise this issue all the time with the powers that be in the health service locally. One in five of our GP practices remains single-handed. We know that that does not provide an adequate service to local people, yet there is not any sort of energy or urgency in the actions of the local health service officials to sort that out. They ought to be able to do so and to apply much greater pressures on some of the GP services, so that we get better primary care.
People cannot get appointments. We have done a survey of our residents—it is not a proper survey; I do it when people attend my very regular coffee afternoons. However, those surveys show that 50% of our residents had to wait more than a week to get access to their GP. Some 30% went to A&E because they could not get access to the GP. Nearly half said that they had found it difficult to get an appointment. The typical story is, “I ring up at half-past 6 to see the GP the next morning. I am told to ring the next morning. When I ring the next morning, it is engaged and engaged, and in the end I give up and go to the A&E.” Unless there is a forceful, determined attempt to sort out the failures of our primary care system, we will not make progress in the acute sector.
One of the little things we did was run a campaign on the use of premium phone numbers. From constituents who came to see me, we uncovered in 2013 that 10 GP practices in the constituency had 084 numbers. One constituent had spent £10 trying to get an appointment, because ringing such numbers from a mobile costs 41p or 42p a minute. Another constituent spent £30 trying to get an appointment for her son because she had to hang on until she was dealt with. She got through to the system, but the call was not answered by anyone to secure an appointment. We have run a tough campaign on that, but two and a half to three years on, we still have one GP practice—Castleberry medical centre—that is refusing to put in a landline, and three others that have a landline but have kept their premium phone line, and my bet is that patients cannot get through on the landline and have to use the premium phone line. Access to GPs is important. I thought we had halted the use of premium phone numbers after another PAC inquiry, but it has not happened.
My final plea is on access to the hospital for the poorest people in my constituency. They live in the most south-western part of my constituency, in Thames ward. Getting to Queen’s hospital from there takes three buses. I did the journey during the election period, and it took me about two hours. If someone has to go for regular chemotherapy or kidney treatment—whatever it is—that four-hour journey every day means that the person does not go and so does not get that treatment and therefore dies younger. I have been pleading with the Mayor and the transport authorities to ease that just by diverting the No. 5 bus so that it goes straight to the hospital. That would save people one change—they would get two buses, not three—but I have completely failed so far. I have been fobbed off. I urge the Minister to join me and write to the relevant authorities to ensure that while at least keeping those hospitals there, trying to get them properly funded, sorting out the financial mess and improving the quality, we also allow people to get there easily, particularly those who need the hospital services the most and are most dependent on public transport.
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Ilford South (Mike Gapes) on securing this important debate and on opening it in the way he did, setting out the chequered history of the trust and the particular challenges we face right across our borough of Redbridge and the wider north-east London health economy.
I will not repeat the points made by my hon. Friend and my right hon. Friend the Member for Barking (Margaret Hodge). I want to express my concern about the outstanding problem that the CQC has identified with the trust and the impact that is having on patient care in a wide variety of areas. I share the concerns expressed by both my colleagues that the CQC inspectors rated the trust as “requires improvement” on most measures, and the responsiveness of service at the trust was deemed “inadequate”, but it is also important to highlight some of the areas that were identified as having outstanding practice—in particular, the values of the trust and how they have been embedded in the culture of the staff.
Like my colleagues, I congratulate the NHS staff who work in the trust on the hard work they do in difficult circumstances. I commend the fact that the radiotherapy unit was one of the top five in the country. There are good outcomes for stroke, and the genito-urinary medicine clinic had
“excellent service with appropriate protocols”.
Significant improvements have been made, so while it is disappointing that the trust remains in special measures, the improvements described in the report are encouraging and reflect well on the NHS staff and the reinvigoration of the trust leadership. They can take genuine pride in their teamwork. I have no doubt that the trust will emerge from special measures sooner rather than later.
My right hon. Friend spoke about the high level of agency spend. One of the problems that the trust has suffered from for a number of years—frankly, some of the trust’s challenges were well known before the inspectors put the trust into special measures—is that when a trust has a poor reputation, it is hard to recruit and retain the best staff. While I am disappointed that we are not yet out of the woods, I hope that when people are thinking about their careers, they identify not only that the trust requires improvement, but that it is improving and is a good place for good people to be at this point in its journey.
I want to speak briefly about the wider north-east London health economy. Until May, I was chair of the Redbridge health and wellbeing board, deputy leader of Redbridge Council and the cabinet member for health and wellbeing. It is fair to say that the challenges in the north-east London health economy—the challenge in primary care has already been touched on—are not just restricted to the trust. I was the first chair of the primary care transformation board, which is trying to change how primary care is delivered and bring about genuine service improvements. In the very first meeting, I asked GPs about their experiences, and they described primary care as being in crisis. They know that they are not providing a good enough service to their patients. They work hard to do so, but the pressures are immense. That relates to the quantity and quality of GP provision. My right hon. Friend talked about the wider concerns about the number of GPs who are past or nearing retirement and the workforce pipeline. Combined with the fact that Redbridge has one of the lowest levels of public health spending in London, that gives me cause for great concern. I am concerned not only about the level of public health funding but about the fact that the Government are seeking to give councils new responsibilities —for example, for health visiting—without sufficient funding. The in-year cut that my council will experience will place even greater pressure on services. On that note, I should probably declare that I am still a member of Redbridge Council, albeit an unpaid one.
Finally, I want to talk about A&E. Since January, there have been some improvements in A&E performance at both King George and Queen’s. In January, King George’s performance standard was 92.67% and at Queen’s it was 79.15%. As of June, King George had improved, up to 96.56%, but Queen’s was still lagging behind at 93.31%. I have seen absolutely nothing in either the CQC’s inspection report or the performance data for our local A&E departments to alter my view that the loss of the A&E department at King George hospital would be a disaster for patients.
Since the decision to close the A&E department at King George, much has changed in terms of both the population pressures and the immense strain on the whole health economy in our part of London, which I have already described. In that context, it is really not unreasonable to ask Ministers to intervene, to look at the A&E closure with a fresh pair of eyes, and to ask the clinical commissioning group to reopen the A&E closure decision and reconsider its position. Previously—this always happens at the height of elections, particularly local elections—my local Conservative association put out a statement claiming that there had been some sort of reprieve and the A&E would not be closing, but nothing of the sort has happened. Thousands of residents across Redbridge will never forgive the Conservatives if they do not at least look at this matter with a fresh pair of eyes.
We all heard what my right hon. Friend the Member for Barking said about the financial issues at the trust. There is absolutely no doubt in my mind that those issues and the difficulties in recruiting staff across two A&E departments are what are really driving the closure of King George’s A&E. It is being driven not by what is in the best interests of patients or what good A&E configuration in our part of London would look like, but by the inability to get the right staff and to rescue the trust from its very difficult and precarious financial position. That is not good enough. I hope that, when he responds, the Minister will at least assure residents that the Government will look at this matter with a fresh pair of eyes and ask the CCG to do the same.
I will be brief, given that I want to leave sufficient time for the shadow Minister and the Minister to respond. I congratulate my hon. Friend the Member for Ilford South (Mike Gapes) on securing this debate.
From the contributions so far, I think we would all agree on what politicians tend to call the challenging environment that the trust has existed in for many years—including the initial Care Quality Commission report, which contained a lot of criticism, specifically on A&E and maternity. A whole host of other issues were raised, leading to the placing of the trust into special measures in December 2013 and the improvement plan of 12 months ago.
We know that there are huge demographic pressures on the trust, reflected in the number of emergency patients, of which there were 220,000 across Queen’s and King George last year. That illustrates the pressure from footfall. All speakers so far have mentioned the huge budgetary pressures, in terms of both the debt overhang from the private finance initiative and the management’s ability to secure the in-year budget. The deficit was some £38 million last year, and it is estimated to be the same this year.
There have been huge management changes across the trust, and I, too, support Matthew Hopkins’s work. As my right hon. Friend the Member for Barking (Margaret Hodge) mentioned, there has been a squeeze on Barts, on the west side, and also on the Essex trust, on the east side, meaning that there is a danger in the distribution of resources: we could be squeezed between the two trusts on the western and eastern borders of our trust.
The CQC report was a bit of a mixed package. There were positive outcomes for radiotherapy, strokes, nurse-led oral chemotherapy and the humane end-of-life care service, and there was increased cleanliness and good infection control across the trust, which compares well with some of our experiences a few years ago. However, the report also consistently pointed to issues relating to clinical governance and waiting times, especially for A&E.
The in-patient survey results mentioned improvements in single-sex placements, the decline in changes to admission dates and the offering of alternative hospital placements to patients. It also mentioned the need for improvements in waiting times for beds, doctor communication and the number of nurses on duty. I acknowledge, however, that in 2015-16 there will be £5.8 million of extra spending on improved nursing care, which will amount to some 80 additional nurses.
On the broader issues that have been raised, I echo a number of points mentioned by colleagues about the pressures on primary care, the age profile of the GPs, the number of single-handed practices and the fact that we have waited for a promised new integrated health centre in Dagenham East for 10 years—it has still not been delivered. Similarly, the Rainham practices desperately need new facilities. Getting appointments is becoming more difficult, putting more and more pressure on the acute sector because of people rolling up to A&E.
Overall, there have been improvements—we all support the management—but there is a long way to go. As we, hopefully, move out of special measures, it is especially important that we remove what my hon. Friend the Member for Ilford South called the sword of Damocles that is hanging over King George. I hope for a positive response from the Minister on that specific point.
It is a pleasure to serve under your chairmanship, Mr Davies.
I pay tribute to my hon. Friend the Member for Ilford South (Mike Gapes) for securing this important debate. His speech highlighted the very real danger of closing his local A&E department while the trust is, sadly, in the protracted throes of special measures.
I also pay tribute to my right hon. Friend the Member for Barking (Margaret Hodge) and my hon. Friends the Members for Ilford North (Wes Streeting) and for Dagenham and Rainham (Jon Cruddas) for their contributions. All have been champions for patients at the Barking, Havering and Redbridge University Hospitals NHS Trust for a number of years. Like my right hon. and hon. Friends, I pay tribute to the staff at the trust who, in very difficult circumstances, are working hard to deliver high standards of care to patients.
As we have heard, the trust is facing particularly profound challenges. It is one of the largest in the country, serving a huge and diverse population. There is a lot of churn and movement of people and, as a result, things are even more difficult for GP and primary care services, which, as we know from elsewhere in the country, have been under intense pressure in recent years. My right hon. Friend the Member for Barking made some particularly pertinent points on that: if someone cannot see their GP, the pressure is moved on to local hospital services. When those services are already in difficulty and struggling to cope, they could well do without the added pressure of extra demand.
I hope the Minister will accept that the trust needs real support, because it has been hit hard by certain decisions. The trust itself must bear some responsibility, but I am afraid that some of the previous Government’s policies came at the wrong time. Last winter, as we heard, the trust suffered its worst quarterly A&E performance since records began. In January, more than one in four patients were waiting longer than the recommended four hours in A&E—some were even waiting longer than 12 hours.
In December 2013, the trust was placed in special measures following a Care Quality Commission report that raised serious concerns about patient safety and care, particularly in A&E. The report said that staff at the A&E at King George
“did not have confidence in the trust leadership to make the necessary improvements in A&E.”
Although some of the problems at the trust are deep-seated, the CQC report was clear that many of the problems, such as the difficulty in recruiting staff to the emergency department, have either become worse or emerged in recent years. The report also suggested, for example, that staff were concerned about the wide range of locum doctors turning up to shifts. They felt that there was no problem when they were assigned locums with whom they had worked before, but they were clear that the lack of permanent staff posed a risk to patients.
The trust is in a difficult financial situation. As my right hon. Friend the Member for Barking said, and she was echoed by other Members, that is not helped by its having to spend £27 million on agency staff last year because of a shortage of qualified staff. The trust has also been forced to recruit nurses from overseas because not enough home-grown nurses are being trained. It is well worth remembering that, despite what Ministers claim, the NHS now contains fewer nurses per head than in 2010.
The future of A&E services at King George hospital obviously remains in doubt. I remind the Minister that the 2010 Conservative manifesto promised to
“stop the forced closure of A&E and maternity wards”.
Since then, the maternity ward at King George hospital has closed. The plan to close the A&E unit and relocate it to Queen’s hospital has been delayed, but not abandoned. The Minister can, hopefully, update us on those plans and address the valid concerns not only of local MPs, but of the local communities that they represent on the capacity issues that have been mentioned.
Clearly, many of these challenges cannot be tackled in isolation and require working across London and, indeed, considerable support from the Department of Health, but I hope the Minister has listened carefully to the assessment of the problems laid out by my hon. Friend the Member for Ilford South. I also hope that he is prepared to take on board some of my right hon. and hon. Friends’ suggestions. What they have said is eminently reasonable. With the right support from central Government, I know that their constituents can receive the standard of care that they deserve.
It is a great pleasure to serve under your chairmanship, Mr Davies. I thank the hon. Member for Ilford South (Mike Gapes) for raising what is an important matter not only for his constituents, but for the whole health economy of east London, and for the measured way he presented his case. He has been a watcher of and campaigner on the matters in his constituency for a long time. This matter has been addressed and debated on several occasions in this Chamber, and I know he has raised it in the main Chamber too. The last time he raised it here was in January 2014, just after the trust had been put into special measures by the Care Quality Commission in December 2013.
The distance that has been travelled since then is quite considerable. I was able to see it for myself recently, as my first ministerial visit was to visit the Queen’s hospital site—albeit to hear about the trust as a whole. It was clear from talking to staff, which I was able to do without management being present, that the distance travelled over the past 18 months has been considerable and transformative not only for patient care, but for staff experience of the workplace—the two, as all Members will recognise, are coterminous. The most instructive moment came in the staff discussion, when a nurse explained that, the day before, a petition signed by 3,000 local people, which had not instigated by anyone at the hospital, had been delivered to say how much they valued staff efforts to turn around their hospital and how they felt that it was a different place from the one that had gained a mixed reputation in the many years before the hospital was put into special measures.
I will address each of the issues raised by hon. Members in turn, but I want first to set the context and add slightly to the narrative provided by the hon. Member for Ilford South in his recounting of the trust’s history. The key review in the matters that we are discussing was begun in 2009. The review took in the whole of Health for North East London and was conducted under the right hon. Member for Leigh (Andy Burnham), then the Secretary of State for Health and now the shadow Secretary of State. It began reporting just before the 2010 election and required an answer immediately after. The hon. Member for Ilford South will know the report’s conclusion, which is basically what we are still sitting with. It encompassed not only the health economy of north-east London, but the relationship with what is now the Barts Health NHS Trust, encompassing Whipps Cross university hospital, St Bartholomew’s hospital, Newham university hospital and the Royal London hospital.
Several hon. Members have discussed the Government’s intentions regarding reconfiguration, but the report was not led by the Government or Whitehall but was under the sensible regime set up by the previous Labour Government of clinically led reconfiguration panels. The principle behind it was a better organisation of A&E and urgent care in east and north-east London—in particular, being able to provide superior trauma care at fewer sites. That model has wide understanding across the House and is based on international evidence and, increasingly, the experience in the NHS. It has affected my constituency as much as it has others around the country.
I understand why hon. Members who are concerned about a hospital that will lose particular services—although King George hospital will retain a 24-hour urgent care service—will feel aggrieved by that change. When engaging with patients and constituents, however, I ask that we remind everyone that this was a clinically led decision that was set up under the previous Labour Government and that the recommendations were continued by the coalition Government as a result. However, none of that questions the fundamental reason why the hon. Member for Ilford South called for this debate, which was to ask, “How can you continue this reconfiguration when one part of the trust is in crisis?” Crisis is the correct word to use for a hospital that was put into special measures. It was not one of the Keogh trusts that were put into special measures due to adverse mortality; it was one of the first to be put in because of systemic and endemic problems at the trust, many of which the hon. Gentleman highlighted.
The change that has occurred over the past 18 months to two years—I am grateful to the hon. Member for Ilford North (Wes Streeting) for highlighting exactly what has gone on—has been one of culture. Another remark from a nurse with whom I spoke was that, since special measures, her comments about patient care were being noticed by management for the first time. That was the difference that the CQC inspection made. The change in culture has been recognised by local people and the result is much-improved family and friends figures. I do not recognise the figures provided by the right hon. Member for Barking (Margaret Hodge), but the most recent figures are close to the national average. I will receive those figures in a moment, but I believe the overall A&E figure for family and friends was up at 84%. That is not quite where it should be, but the in-patients figure had also risen to nearly the national average. The most recent family and friends figures showed an improvement in results.
Hon. Members recounted figures suggesting that the A&E performance was poor. It is true that the A&E department has failed to hit its required standard for a long time, but the most recent figures are encouraging. Performance for the first quarter of this year was 93.39%—just under the 95% target—compared with the figure for the first quarter of the previous year of 85.62%. That is like for like. Despite the problems encountered across the NHS over last winter, that hospital showed a sustained improvement in the first quarter of this year.
I second the remarks made by several hon. Members about the quality of the new chief executive and the team he has built around him. I have spoken to him, and although he was not going to make predictions, his confidence about going into winter, as well as the place the hospital was in, was significantly different from where he and his team were this time last year.
Let me clarify the A&E figures before I get upbraided. I believe that the figures are that 96% of in-patients would recommend the service to their family and friends, and 1% would not; in A&E, 84% would recommend and 10% not; in maternity, 98% would recommend; in antenatal, 95%; in postnatal wards, 93%; and in postnatal community, 97%. Those figures are roughly around the averages in national FFTs—family and friends tests—which is a significant and marked improvement, showing that local people are responding to the changes made in the hospital and to what needs to happen.
None the less, despite all the improvements, it is true that the A&E is not in a sustainable position to receive the services from King George hospital, either physically—I saw its buildings for myself—or in terms of the new rotas and rosters, although recruiting is now much better managed than in the past. I understand from local commissioners that there is no intention to move these services from the King George to the Queen’s site until the physical and staff changes have been made to the satisfaction of the commissioners and the provider—the trust itself. I understand also from the commissioners that the time limit they have imposed means that that cannot happen even within the next two years, because they need to see a degree of sustainability before they can have the confidence to make the changes.
Does the Minister accept that, given that the A&E will be closed, whether in two, three or four years’ time, there is a level of uncertainty? The CQC report comments on that. Is it not better for the sword of Damocles to be lifted and for us to go ahead on the basis of having two A&Es that work together?
I understand the hon. Gentleman’s points. I accept that uncertainty is created at the King George site and that the effect of that is potentially destabilising, especially when the hospital and the trust have had to endure the whole process of special measures. His solution, however, is a false one in two senses.
First, the decision was clinically led in the first place, so to go against it would be to go against a clinical decision after several reviews. The hon. Gentleman is therefore suggesting that we make a political intervention against a decision made by doctors about the best distribution of trauma centres and urgent and emergency care centres according to population. Decisions have been made on a similar basis throughout the country. I do not believe that he really feels that that would be an acceptable route to take. Secondly, even were we to do that, it would not remove uncertainty, because there would still need to be some sort of reconfiguration in future in order to get the best outcomes for patients. So the uncertainty would remain.
The hon. Gentleman’s point is valid to an extent. If the situation were to occur again—clearly none of us would have wished things to proceed as they have done —we need to make it clear that reconfigurations can happen only when we have the correct sustainability in receiver organisations. That should be something we think about as we go ahead. However, we are where we are now with his trust, and to proceed on the basis that he suggests would not give either the patient outcomes or the certainty that he desires, whether for staff or his constituents.
The Minister referred to a decision that was initiated in about 2009. That is correct, but circumstances change. Our area is the most rapidly expanding in London. I do not know the figures for Redbridge, but those for Barking and Dagenham show, potentially, another 30,000 to 35,000 houses being built over the next 10 to 15 years. That is massive expansion. I put it to the Minister that not only is the number of houses increasing, but the nature of the households is changing. What used to be a house lived in by a couple with perhaps two kids now tends to be lived in by intergenerational families with many more people. What regard has he paid to those changes? Should he not pay regard to them and review his decision in the light of them?
It is not ultimately my decision. It is the decision of the Secretary of State, but only on the advice of the Independent Reconfiguration Panel. The IRP takes a view over a long horizon, so it takes population growth into account in the original decisions—
I will come back to the right hon. Lady with a final comment, but that is what I understand. In the end, such decisions are left to local commissioners, who are the experts in buying the right kind of health provision for their patient groups. If their decision changes, that should be reflected in the IRP’s final decision, but the commissioners remain certain that that is the correct way to go for east and north-east London, and while that remains the case, we as politicians should support that clinical decision.
I will respond to some of the other points made by hon. Members. The finances of the hospital were brought up several times. It is true that it has had a sustained poor financial performance, but it is unlike other hospitals which have become indebted or are lifting up. The hospital’s position is a sustained one involving a large number—£38 million, which includes a very large figure for agency workers. That figure is now declining as the new management gets a grip on recruitment, and I heard some good stories about the improvement in recruitment when I went there only a couple of weeks ago. There is also £60 million annual provision for PFI payments, which is a problem in many trusts around the country, but there is no point rehearsing those issues, which the right hon. Member for Barking looked at many times in her previous role.
The chief executive is clear about the deficit. He shares my view and that of the Secretary of State that financial performance and quality go hand in hand. No hospital in this country offers outstanding care but has poor financial performance. We cannot get efficient care anywhere if the books are not being looked after at the same time, because the two work together. The chief executive understands that getting the trust into a decent financial position is central to providing the kind of consistently high-quality care that he wants to see across the trust, and not only in the specific areas rightly highlighted by the hon. Members for Dagenham and Rainham (Jon Cruddas) and for Ilford North.
The hon. Member for Ilford South was right to talk about capacity. There was a serious lack of capacity because of the failure to discharge patients and to get people through the system, which caused problems at the front end, in A&E. Remarkable change has been achieved in the past six months through the new measures put in place by the new management, but it is true that there is a great deal more to do. I heard a different story from the one the hon. Gentleman recounted: actually, they thought that the last CQC judgment was completely realistic; the action points highlighted were in large part already being addressed and needed to be done. The new management recognised that special measures was a regime that had to be exited once a sustainable improvement over time had been shown. That was gratifying to hear, because when it is heard from the shop floor, the management and the CQC, that shows that the whole team understands the problems and how they need to be addressed.
Several Members mentioned the problems in primary care, and I am aware of the acute issues in east and north-east London. They are the reason why my right hon. Friend the Secretary of State launched the new deal for GPs a couple of weeks ago. NHS England is now mapping hotspots of GP shortage across the country. It will use that information to target resources to make sure we are putting the new GPs being recruited into the right places and using every possible incentive to make sure that under-doctored areas are brought up to parity. Members will know that this is a historical problem and it will take a great deal of heavy lifting from all of us to change it. It is not simply about sheer numbers of GPs; we must have new models of delivering care and new diversity, so that we can deliver primary care appropriately rather than in a way that is based on a model that does not fit.
The right hon. Member for Barking raised understandable concerns that the existing system for the Barts trust was set up to finance one PFI deal. She is not alone in those concerns. I am taking a deep interest in the progress of the special measures regime at Barts. The financial performance and accounting procedures at that hospital and trust when it went into special measures were frankly shocking. They have now been changed, and we will be reviewing the situation on a weekly basis. I hope that if she discusses the matter with the CQC and the trust, she will understand better that it is not that the trust is subsidising one PFI but that there are systemic financial problems across the trust. I take her point completely, however. As we address the financial problems in east London we must reassure everyone that mergers have not happened simply to prop up one organisation at the expense of another.
Finally, I welcome the constructive approach and fair questions of the hon. Member for Denton and Reddish (Andrew Gwynne). I hope I have answered the majority of his questions, but I question the idea that Government policy has made the situation worse. The reason we are debating here is that the CQC gave an inadequate rating to the Barking hospital trust and put it into special measures. The ratings and the special measures regime were a creation of the previous Government. They have provided transparency and clarity that we did not have before and allowed us to have an honest discussion about what is wrong and what is right. I can now stand up and say where the problems are and accept responsibility for what needs to change. None of that was possible when we could not say that anything was wrong and had to pretend there were no problems, because there was a culture of denial rather than one of transparency and openness.
We are not at the acme. We have a great deal of distance still to make up, but we are in a much better place than we were back in 2013, when the trust was put in special measures, or in 2010, when the review was completed. We now have clarity about what we need to do and the process for doing it. I believe that we will soon have a much better health economy in north-east London than the one that Members have had to endure so far.
I am pleased to have got some injury time, Mr Davies. I emphasise to the Minister and his officials that the problems in north-east London and in my borough of Redbridge in particular are serious. He referred to the Barking and Havering trust and the Barts trust. Every single resident of Redbridge now has to use a hospital that is in special measures, as Whipps Cross hospital is part of the Barts and Royal London agglomeration and King George hospital is part of the Barking and Havering trust. In that borough people cannot go to a hospital that is not in special measures. Some of the constituents of my hon. Friend the Member for Ilford North (Wes Streeting) go to Whipps Cross rather than to the King George.
The reality is that the situation is a fundamental challenge to a population that is growing rapidly. The Mayor of London has just agreed to invest £55 million to build 2,000 new dwellings in the heart of Ilford. A young, dynamic and largely migrant population is moving to Ilford. That means we have to deal with these problems soon—they must not become long-term issues. I am conscious that the people of north-east London—of Redbridge, Barking, Dagenham and Havering—will expect decisions to be taken in their interests. I and my colleagues will continue to fight for them.
Question put and agreed to.
That this House has considered the future of Barking, Havering and Redbridge University Hospitals NHS Trust.