Tuesday 14 June 2016
[Sir David Amess in the Chair]
Affordable Housing: London
I beg to move,
That this House has considered affordable housing in London.
It is an honour to serve under your chairmanship, Sir David.
First, I should draw attention to my entry in the Register of Members’ Financial Interests as the owner of a rental property and a member of the Residential Landlords Association.
To say there is a housing crisis in London has become a cliché, but it is more than that for our constituents who want to be able to stay in London and to afford a roof over their heads. Affordability is defined by what is affordable to people who live in London, or want to live in London. Living in London should not be seen as some sort of privilege. Not only should our constituents have the right to live in London among their community and family support networks, but London needs people to keep our great city’s economy and public services going. I will show just how difficult that can be when teachers, nurses, daycare assistants, chefs, cleaners, baggage handlers and so on cannot afford to live in London.
First of all, I apologise, as I will not be able to be here for the whole of this timely debate. There is a particular problem in the housing market in the centre of London that has a knock-on effect in suburban areas. The hon. Lady refers to various jobs and how people feel squeezed out of the London market, but that also applies—dare I say it—even to those who would be regarded as incredibly well-paid City professionals. I hear from senior partners in law firms who say that junior lawyers on almost £100,000 a year simply cannot get on to the housing ladder without having a hell of a long commute, and often they work very long and untimely hours as well. As she rightly says, the problem affects all of us here in London. All of us MPs, of whatever political colour, feel strongly that we hopefully can make a contribution to ensure that the Government are aware of the particular problems we have in the capital city.
I thank the right hon. Gentleman for his intervention. Of course, in his constituency he has many people working at very high salaries. We know there is a crisis when people on almost £100,000 a year cannot afford a home in London.
The problem goes to the heart of London’s ability to function and to serve the rest of the UK. Let us look at the problem from the perspective of a few people who want to live and work in London and see what their choices are. In the teaching and social work professions, there is a chronic shortage and a recruitment and retention crisis, as all of us who have recently met headteachers or directors of social services know. Inner London salaries range between £27,000 and £37,000. If we take a mid-point of £32,000, someone could get a 25-year mortgage with a 5% interest rate and they would be able to afford between £87,000 and £131,000, but in my constituency a teacher could not get anything. The cheapest home for sale in my constituency, apart from a boat, is £190,000, and that is for a one-bedroom flat in a house that is in a shocking condition.
Is my hon. Friend aware that in the W4 postcode, which is in her constituency and mine, just to have a chance at having a one-bedroom flat—a so-called starter home under the new scheme designed to alleviate the crisis—someone would need a salary of £90,500? Starter homes have been misnamed. They are not starting anything, but ending dreams for a generation.
My hon. Friend is absolutely right; I will move on to that subject shortly. Certainly a salary of more than £90,000 is not the average mid-point for a teacher or social worker.
Time and again when I talk to employers, housing is the issue. For some nurses there has been some key worker housing, which was introduced to deal with market failure and to provide cheap housing, but that is all but disappearing. Those entering nursing will also face a mountain of student debt now that the Government have announced the scrapping of the NHS bursaries. The Royal College of Nursing survey recently showed that many nurses will leave London if they cannot afford anywhere to live, which will add to the problems in the NHS.
At the lower end of the pay scales are people who are essential for London to work. A daycare assistant is paid £6.70 an hour to work in a nursery here in London; that is about £1,000 a month. No one with a family can do such work when the average rent is around £1,500 a month. Even renting a room takes well over half the daycare assistant’s take-home pay. I have a specific example of a hard-working man and his family in my constituency. Since coming to London he has worked full time in two jobs. He has rented privately for years, taking multiple loans to cover deposits and rent up front, and is now in considerable debt as a result. His landlord has now raised the rent as it is the end of the tenancy, so he now cannot stay there with his family. Letting agents and private landlords will not accept claimants of housing benefit, which he needs to top up his rent, and he cannot borrow any more money for a deposit. Despite never missing a rent payment and despite two previous letting agents confirming that with good references, he cannot rent privately. He has had to apply to the council as homeless in order to get housing.
But my constituent will not get a council home. The current series of “How to Get a Council House” is filmed in my borough of Hounslow. None of the families in that series has ended up getting a council home. If they have been lucky and got through the hoops, and if they have been accepted under the council’s duty to house, they are placed in temporary accommodation, as my constituent and his family will be. Temporary accommodation is private rented housing where housing benefit may contribute to housing costs, but even then my constituent is not out of the cycle of escalating rents. He may dream of owning a home—a Government objective—but what he needs is a home at a rent he can afford on his low wages.
He is not alone. The ending of a private tenancy now accounts for 39% of homelessness acceptances in London. According to the Department for Communities and Local Government statistics, 32,000 people in London made an application to their council as homeless in 2014-15, which represents an increase of 38% over five years. DCLG statistics reveal that right-to-buy sales between October and December 2015 accounted for 26% of sales. Right to buy is for people who are already fortunate to be council tenants, but, with a Government discount of up to £100,000, it is taking valuable stock away from local authorities, hence their dependence on temporary accommodation.
In the council housing sector, like-for-like replacement is not happening for the council homes bought under right to buy. The new replacement homes that the Government announced could be shared ownership or low cost sale rather than rent. At least 36% of all homes sold by councils across London are now let by private landlords, many of them subsidised by housing benefit because the rents are so high. The sale of high value vacant council homes will have the overall effect of restricting the number of affordable houses for rent. London Councils is concerned that the objective to replace two homes for every one sold may not be sufficient to cover construction costs and land purchases in the right mix of housing. So already we have examples of the failure of the housing market in London that is causing the affordability crisis.
I have not yet mentioned employees in the private sector on middle incomes. Fuller’s Brewery in my constituency is a thriving business with an international reputation. Having spoken to the directors, it has become evident that the housing crisis is affecting their business and their ability to recruit and retain staff. So who can truly afford to buy a home in the area they want to live in, grew up in or want to work in?
Leyton, which forms the bulk of my constituency, has traditionally been a relatively cheap place to buy, compared with the rest of London, but in recent years all the surveys—for example, by the Evening Standard and other newspapers—point to Leyton as one of the city’s property hotspots, which has meant that property prices and rents have gone through the roof. Does not that point to the fundamental problem: a lack of supply? The imbalance between demand and supply has reached the point where so many people, such as those whom my hon. Friend is discussing, can no longer afford to rent or buy in London.
My hon. Friend is absolutely right. So many people are moving away. Many are moving abroad to countries where their skills are valued and they have a much higher standard of living. Even a childcare assistant can earn £40,000 in the United Arab Emirates. It is, though, investors from middle east countries who are propping up London’s housing crisis. Many people are moving elsewhere in the UK as well, thus adding to London’s brain drain and skills drain.
Yesterday’s Evening Standard reported that young Londoners spend almost 60% of their salaries on rent. The first year group to leave university with more than £50,000 of debt, because they were the first group of students to have to pay £9,000 a year in tuition fees—my son among them—are now hitting the jobs market. How can someone save, pay off their student debt and afford to eat and keep warm with rents at current levels?
The hon. Lady is highlighting the personal misery of housing in London; would she also reflect on the fact that the housing shortage—there is no doubt that we have a major problem here in the capital—is beginning to put London’s international competitiveness as a business centre at risk? This side of a further referendum in Scotland even the Scottish National party would recognise that as a problem, because if London’s competitiveness suffers the whole United Kingdom will suffer. A recent London First survey said that some 73% of the London businesses surveyed said that housing supply and costs were a significant risk to the capital’s economy.
The right hon. Gentleman is absolutely right. Many business organisations are raising housing as an issue. Two years ago, the London Chamber of Commerce and Industry wrote a significant, ground- breaking report on housing costs and the housing shortage. That does not appear to have been taken into account when the Housing and Planning Bill was drafted. I understand that the LCCI will be launching another report in a couple of weeks to highlight the problems again.
A shortage of the total number of homes in all sectors—council, social rented, intermediate and market rented—has driven up open market sale and rental values. Several organisations, particularly the London Housing Commission, have estimated that London needs at least 50,000 new homes a year just to begin to deal with the shortage, and stated that a significant proportion must be affordable, particularly when wages have not kept up with prices. The average Londoner’s salary is £33,000, but the average home now costs 16 times that. As more people are priced out of home ownership, they are putting more pressure on the rental market, in which rents are continuing to rise. In my borough, Hounslow, the rent-to-salary ratio is 58%, and rent levels are out of reach for average earners, let alone those on low wages.
Until around five years ago, councils relied on Government support to add to the stock of council and housing association homes so that they could provide decent-quality, affordable homes to those in acknowledged housing need who were unable to rent or buy in the private sector. In 2011-12, some 12,000 new social rent homes were delivered, thanks to the Labour Government policies that supported housing associations, and later councils, to build, but that figure has been declining, and only around 2,000 new social rent homes will be built this year. That shows how the pipeline supply is declining. The number of council homes and housing association social rented homes built this year will be lower than the number of council homes lost through the right to buy. The total stock of homes for social rent is going ever downwards.
There was always the intermediate market of shared ownership—part rent, part buy—but less of that stock is now coming on stream as the Government focus on starter homes and Help to Buy. Relying on the private sector to deliver affordable homes has meant that in new developments across London, only 13% of homes given planning consent last year were considered “affordable” under the official definition. We are losing social rented homes faster through council house sales than section 106 agreements with developers are delivering new homes.
What are the Government doing about affordable housing? Let us look at their flagship policy: starter homes. When the policy comes on stream, it will apply only to brand-new properties, which, at current prices, are unaffordable to most working Londoners, as the right hon. Member for Cities of London and Westminster (Mark Field) said. Someone needs to be earning £97,000 to buy an average-priced starter home. Starter homes will also cut the delivery of all other homes. A third of councils that responded to an Inside Housing survey revealed that their entire affordable housing requirement could be consumed by starter homes if the threshold is set at 20%.
Charities such as Crisis are concerned that the policy will require councils to prioritise starter homes for higher earners and so reduce councils’ scope to meet the full range of housing requirements identified through their local planning processes. London Councils agrees that starter homes should be in addition to other forms of housing, so that councils can still secure the necessary tenure and price mix in accordance with the needs in their area, and can discharge their homelessness responsibilities by providing truly affordable housing.
My hon. Friend is being very generous in taking interventions. She mentioned her own experience as a parent; has she seen the Aviva research that shows that 1 million more people aged between 20 and 30 are going to be living at home with their parents in the next 10 years? We have all heard of the bank of mum and dad, but does she agree that the Government have not only messed up the housing market but seem to be stunting young people’s growth?
Young people whose parents live in a house in London big enough for them to have their own room, or even to share a room, at least have the advantage that they can ask us to carry on housing them—for I do not know how long—but what about mobility? How can young people from other parts of the UK or other parts of the world come to London? They do not have the landlord of mum and dad to turn to.
Let me return to the implications of Government policy and the Housing and Planning Act 2016. Many London councils, particularly those in inner London, believe that in future there could be areas where there are no affordable rented homes, because the Government expect 20% of all new developments to include starter homes on sale at 80% of market value. Couple that with the right to buy, the decline of housing association stock and the forced sale of vacant council homes, and there will be yet more of a crisis.
I counsel that we should not despair entirely. One of my local authorities, the City of London, owns property not only in the square mile but in places such as Southwark, Lewisham, Lambeth and Camden, and is looking to start its biggest house building programme for four decades, since the building of the Barbican centre. That will require being pragmatic about the mix—with some social housing and some at an intermediary level—but it is looking to build 3,700 properties over the next 10 years, which is quite a lot for such a small local authority. If we can work with local authorities to recognise not only the problems but that, because of the cost of land, we have to be a little more relaxed about density than we might have been in the past, there is potentially a route forward, with all local authorities working with the London Mayor and, of course, the Department.
I will move on to the London Mayor at the end of my speech. The City of London is in a slightly unusual situation: it has capital and other sources of income, and it can use its wealth to deliver affordable housing across London, as it used to do historically.
My council still has several hundred of the last council homes in the pipeline. Labour authorities generally, as well as the City of London, had a much higher propensity to deliver council housing until now, but the current Government policies make that more difficult. There is no specific Government-led initiative aimed at key workers, and the right to buy for housing association tenants is paid for by the sale of vacant council homes, which causes the social rented housing stock to decline further. Other Government policies, such as reducing the benefit cap, extending the right to buy with discounts of £100,000 and freezing local housing allowance rates, exacerbate London’s affordability challenge.
At the end of May, the Chancellor, who was standing in at Prime Minister’s Question Time, acknowledged to me that there is a problem. That is a start, but it is a shame the Government did not acknowledge the scale of the problem before drafting the Housing and Planning Bill. The Chancellor told me that he has met the new Mayor of London—our former colleague, Sadiq Khan—and that housing was top of the agenda. The new Mayor is committed to ensuring that 50% of all new housing in London is genuinely affordable. He has announced that he will introduce a new London living rent, which will be based on one third of average local wages, to tackle the skyrocketing private rental prices, but to do that he needs the Government’s active support.
The Government must acknowledge that there is a problem in London that the current initiatives will not address, and that merely increasing the supply of housing will not in itself provide the housing we need to attract teachers, nurses, social workers, cleaners and childcare workers. The London Mayor, local authorities and the Government will have to work together on new solutions. The Mayor is offering the use of non-operational Transport for London land, but we also need the land of other public bodies, such as the NHS, for key worker housing. We need to return to providing proper support for social rented housing that is truly affordable to working people at all stages of the salary range.
By acknowledging the scale of the problem and accepting their role in addressing it, the Government will make a start. They must accept that their policies are depleting the supply of affordable housing and that they are subsidising market distortions in flats to buy. They must allow local authorities to have the power to invest in new social rented housing, cut the discount on right to buy and release funding for key worker housing. That would be a start.
It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) on highlighting this hugely important issue. As she said, now is really the time. The Government, having passed legislation in this area, have recognised that it does not work for London. We have a huge opportunity now that we have a new London Mayor. Although I railed against the Housing and Planning Bill, we have to work with what we have and come up with a solution for London within the current framework; the Mayor should be given some latitude in how it is interpreted.
I want to talk about issues in my constituency that highlight the crisis, and I will touch on the work of the Public Accounts Committee in this area. I have often talked on the record about this issue, but every time I speak, the price of a house in Hackney has gone up. The average property price in Hackney is now £691,969, which is an 85% increase on 2010 prices, when properties cost only £373,000 and a bit. Average wage growth in London over the same period was 1%, so property prices in my borough are out of kilter with reality for every group. We are living in a real crisis.
Hackney is the 11th most deprived authority in the country. Interestingly, we have gone down from being top or second, where we were for many years, because the house prices mean that only the very richest can move in. That has increased the average salary in the borough to £33,000 a year. The variation is great. People often tell me that my constituency is achingly cool, but I remind them that it is also achingly poor—many people are on very low incomes and are struggling to get regular work. That is reflected in the fact that there are 11,000 people on the council’s housing register, which is frankly a bit of a joke. People think it is a waiting list, but given that 1,338 homes were allocated in 2014-15, the demand is certainly not being met through the available supply. In addition, Hackney Council could lose 700 homes through the forced sale of council homes to fund right to buy for housing association tenants. I really worry about where people on low incomes will be able to live in the future. In the private sector—I will speak more about this in a moment—the rent for a typical two-bedroom property is about £400 a week, which equates to just over £20,000 a year. To afford that, someone would need an annual gross household salary of approximately £59,000.
The stark reality for my constituents is that home ownership, renting and social housing are but dreams. Many of them are stuck living with their parents at home as adults. In my surgeries, I increasingly meet families that have people living in the living room, or parents and children living on the sofa—not even a sofa bed, because very often there is not space even for that. I say seriously to the Minister that I fear we are creating modern slums. I acknowledge that Governments over many years have not built enough homes, but now we have this wretched housing Act.
This is not new. Back in 2001, when I was a member of the London Assembly working with the then Mayor, Ken Livingstone—perhaps not so much working with him, as he was not in my party at the time—I produced a report and chaired a group on housing for key workers. We looked at nurses, bus drivers, teachers and police officers as a sub-section of that group, and concluded that there was a real crisis looming for middle management. As my hon. Friend the Member for Brentford and Isleworth highlighted clearly, that is sadly coming home to roost. I do not like to say that we were right then, but we were, and too little has been done since. As my hon. Friend said, that goes to the heart of London’s ability to function. We predicted that problem. We also had the concern that, as she highlighted, people on low incomes in the private sector are key workers, too: we need people to work in banks, to be chefs and to drive taxicabs. They need to be considered, too.
The solutions that the Government have come up with are key worker housing, shared ownership, starter homes, Help to Buy and, of course, the private sector, but they do not work for Hackney and the expensive parts of London and the south-east. Key worker housing is usually defined by profession, and it is typically for the public sector. That is fine if people can access it, but there are issues with it. For a start, there are not many key worker housing schemes around, and there is also an issue about rent levels.
Together with the right hon. Member for Cities of London and Westminster (Mark Field) and other colleagues, I fought hard to preserve some former Crown Estate properties as key worker housing. They are now owned by the Peabody Trust. I met Peabody last week, because many tenants in those properties have raised concerns about the unaffordability of rents, which have been set at 60% of market rent; that is Peabody’s definition of a rent that is achievable by key workers, but given the market rents in Hackney that I have set out, that is beyond the reach of nurses, social workers and teachers.
Even if that model is made to work, there is not enough of it. It is a very ill-defined part of the housing market. Peabody has, to a degree, acknowledged that there is a problem, and it is looking again at what the right rent should be. I am pleased to say that it will meet tenants and residents in July to start the debate about what the best model is for providing sustainable, solid and secure housing for the key people we need to keep London operating. I wish it well in its endeavours, and I hope to be involved. I am also seeking a meeting with the Mayor of London to see whether we can shape this debate at a London level.
Shared ownership is one of the other so-called solutions. In Hackney, we have seen the ludicrous situation of shared-ownership properties on the market for well over £1 million. The defence of the housing association concerned is that four sharers on £70,000 a year could buy a share of the property. That is not what I thought shared ownership was for. The rent levels on the remaining equity can be a real problem—it is sometimes as high as 4%—and there are issues of move-on for families who grow and need a larger property, but cannot afford to staircase up. One of the challenges is the narrow market, and the lack of mortgages available to people who are shared owners. That model is fast heading for bust; we need a rethink, and perhaps to use the money put into shared ownership for more sustainable forms of rented housing, or for better subsidies so that the right people can move into long-term affordable home ownership.
At Prime Minister’s questions, the Prime Minister told me that the solution to the problem in Hackney was starter homes. As my hon. Friends have highlighted, at about £400,000 for a starter home, who in my constituency can afford that? Hackney Council has estimated that a person would need an income of about £71,000 to buy a starter home in the borough, although my hon. Friend the Member for Brentford and Isleworth highlighted a figure of £97,000. There are different figures, so perhaps the Minister will clarify that point. What is the rate for a starter home in London? My constituents want to know that, because anyone who might be interested in a starter home wants to know whether it is possible to get one.
As for Help to Buy, I need say little about it, except that in my borough it has been fuelling house prices. Miraculously, newly built properties coming on to the market hit only a smidgen below the Help to Buy threshold. That initiative is not helping in areas such as mine. The private sector, too, is a real problem. In my constituency, more people now rent privately than own their own home. Private sector tenants who have been suddenly cast out and have nowhere to go are coming to my surgery at an unprecedented level.
Let me give an example. Only this Monday, a 68-year-old woman saw me at my surgery. She has lived at a property for 52 years, first with her grandmother and her uncle, who are now dead. The property, to use an old-fashioned description, was benevolent housing for the working poor when it was built towards the beginning of the previous century. It was, however, sold on, and the rent is now £382 a week. It is a three-bedroom property, so she has been told that her housing benefit entitlement is only £200 a week, because she is under-occupying, but bear in mind that it has been her home for 52 years. The woman’s income—she has a private pension and a bit of state pension—is £800 a month. She is a proud woman who has never claimed a penny until she had to claim housing benefit, and she is embarrassed about doing that. She is in a desperate state and is in rent arrears. I am working with the council to see if we can find a solution for her, but she is only one of many.
Another tenant, a younger woman of 46 years, works in one of our national museums, but she has been ill and unable to work. The rent was affordable, but the landlord decided to up sticks and move abroad; he contacted an agent, who said, “Hey, you’re not charging enough here, put the rent up,” which the landlord did. That put the tenant notionally into rent arrears, although her rent was enough for the landlord previously. Her ill health and her need for housing benefit mean that no agent is interested in looking at her. She managed to find one landlord who was willing to take her on, but that landlord would only accept her with some sort of rent guarantee, which the council, however, cannot offer on housing benefit before someone moves in, so the whole system is bust. She has looked not only in Hackney, but in the neighbouring five or six boroughs, and she can find nowhere affordable to live, even in the constituency of my hon. Friend the Member for Leyton and Wanstead (John Cryer). She is 46 years old, single and not working—temporarily—and she is unable to find anywhere to live. What is the solution for her? The Government are offering nothing at all, and they are even about to rip away from my constituency any social housing—if she could qualify for that, which, frankly, would be a miracle, even in her circumstances.
What are the solutions? The Public Accounts Committee has been looking into the matter intensely, on a cross- party basis. In September, we published a report on the Government’s land disposals programme. The programme was announced at the beginning of the previous Parliament by the Housing Minister at the time, the right hon. Member for Welwyn Hatfield (Grant Shapps), and was intended to dispose of enough land to build more than 100,000 homes—so far, so good. What we discovered, unbelievably, is that the Government cannot tell us how much the land was sold for, how many homes have been built on the land, and whether it was value for money for the taxpayer. The figures even included some land released in the early stages of the previous Labour Government, so the numbers were criticised by auditors.
Perhaps the Minister will respond to one of the Public Accounts Committee’s recommendations:
“In taking forward its new target”,
which the Government had announced,
“to release land for up to 150,000 homes between 2015 and 2020, the Department must only count the number of homes built, or commenced, on land disposed of during the programme. This should also include the number of affordable homes.”
We have been told by civil servants that Ministers expressly said that they did not want the homes built on land disposed of by the Government counted. Let me repeat that, because it sounds unbelievable and people might think that I have misspoken: Ministers have expressly said that they do not want to count the number of homes built on public land disposed of for house building. It is more Sir Humphrey than Sir Humphrey, and it is time that the Minister gave us an answer.
We also now have the right to buy for housing associations. I have no problem with people wanting to become homeowners. I am a homeowner myself; indeed—forgive me, Sir David, I forgot to mention my declaration in the Register of Members’ Financial Interests—I am a landlord in London, so I have no problem with people buying their own home, but not in a way that is taking homes away from other Londoners. That is the thing. The back-fill is coming from councils having to sell their important social housing. The Public Accounts Committee concluded that not only was there no maths done on the right to buy, but it was not sustainable in its current form, with so little detail about how it will work. This is an opportunity for the Minister to work with the Mayor of London to make the policy work better for London.
There is also pay to stay. I have highlighted the multiple households in my constituency in which there are adult children who cannot move anywhere. They are stuck at home with their parents, and are often overcrowded; even if they are not, they are pushing the rent levels up, because as a household, their marginal taxation rate can be immense. I spoke to Peabody the other day, and it has had examples of people who have been reluctant to take on promotions, because households that go over a certain level of income—a £40,000 household income sounds like a lot outside London, but it is not a great deal in London—are suddenly having to pay a high marginal rate of both income tax, potentially, and extra rent.
I must also rail against the loss of secure tenancies. A stable home is a fundamental political principle for me. It is a building block for life, because with a stable home people can think about a job, getting their family sorted, making progress and contributing to the community and society in which they live. Without that, people are living in anxiety. In my constituency surgeries, I am seeing some of the worst housing cases that I have ever seen, and I have been elected for 22 years now. For the record, as we are in the middle of debate about the referendum, I have never once, in my 11 years as an MP, had an eastern European come to me about council housing—they all seem to live in the private rented sector, and certainly they have never come to me asking for council housing.
The Government are seriously damaging our city, but they have an opportunity. I ask the Minister to tell us, seriously, how much he will work with the Mayor. I also have a couple of suggestions, including giving back to the Mayor the land that NHS Property Services took away from London, such as St Leonard’s hospital in Shoreditch. The Mayor should be allowed to turn that land into homes, and to count how many homes he can build in total, and how many are affordable or for key workers. That will do more for our city. There might be a deal struck, so that some of the money goes back to the NHS—goodness knows, the NHS budget is under great stress—but those homes would be vital for our health workers, teachers and so many others.
The Mayor should be allowed to develop a solution for London. I hope that constructive discussions with the Mayor of London are ongoing, both behind the scenes and, soon, more openly, because if the situation continues, our city will be hollowed out and people will not be able to afford to live and work here, which will change the nature of our great London.
It is a pleasure to serve under your chairmanship, Sir David. I apologise to you and to the Front Benchers, because I have to leave before the end of the debate. Notwithstanding that, I wanted to take part, because the issue is important to my constituents; that, indeed, is why we have debates on affordable housing in London regularly.
I thank my neighbour and hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) for introducing the debate and for setting out the problems so clearly. I also thank the right hon. Member for Cities of London and Westminster (Mark Field), although he has gone now, for turning up. He always turns up for these debates, and he is usually the only Tory London MP who does. Perhaps it is not surprising that five of the MPs who turned up represent central-west London constituencies, because although the problem is London-wide, it is particularly intense in those areas of high property values.
To illustrate that, in Hammersmith and Fulham, 58% of average monthly salary is now taken up by private sector rent, and the multiple of annual income represented by house prices—now pushing up towards £1 million, on average—is 20.5, the fourth highest in London. That shows how stark the problems are. That means that, for many people, social housing—council and housing association housing—is the only affordable type of housing. We obviously need a comprehensive solution that includes other forms of subsidised housing, whether those are traditional methods such as shared ownership or newer methods such as controlled rents and discounted sale.
There are a variety of schemes; it is simply that in recent years they have not been implemented. As my hon. Friend the Member for Brentford and Isleworth mentioned, the previous Mayor’s record was appalling, to the extent that the last year of his reign for which figures are available was the worst for affordable home delivery since records began 25 years ago, with fewer than 5,000 homes built. As she said, his record was about 13%, which simply makes a bad situation worse.
To give an example of what is going wrong and the opportunity cost—I mean that literally—there are more than 30 opportunity areas in London, and three of the biggest are in my geographically rather small constituency. We are told that, over a number of years, those three together will probably provide 40,000 homes. The failure in each of those areas is stark. On the one hand, we have the White City area, where the target for affordable housing was reduced by the previous Conservative council from 40% to 15%—and it is barely hitting that—which is encouraging high-value developers such as St James into the area. Many small penthouse and two-bedroom flats on the BBC television centre site, for example, are going for millions of pounds in what is the poorest part of my constituency and the area with the greatest housing need.
Worse still is what is happening in west Kensington and Earl’s Court, where permission was granted for 8,000 homes, which include not one additional social rented home and only 10% of any type of affordability. Effectively, those 23 acres of prime land owned by Hammersmith Council were given away. Notionally the cost was £90 million, but in practice once the council had the responsibility of buying out freeholders and leaseholders on that site, it was little if anything—it may even be a negative sum. That is beyond negligence. The whole of that site—some 80 acres—is public land owned either by the council or by Transport for London. The new Mayor will obviously take a strong interest in that, because although half of that land has already been disposed of, half of it—the Lillie Bridge depot—remains to be dealt with. Perhaps we can hope for something better, but again that shows the missed opportunity.
Most significant of all is the area that is now the Old Oak and Park Royal Development Corporation, which is zoned to provide more than 25,000 new homes. Again, that has been earmarked as one of the key areas for starter homes—in other words, homes that will go for up to £450,000 each, which are not affordable by anyone’s definition of the term. I fear for what will happen in that development because of the combined mismanagement of the previous Mayor and the Transport Secretary, who at the end of 2014 discovered that the construction of HS2, Crossrail and other rail projects in that area was being done in such a way that, as Sir Terry Farrell pointed out, it has prevented the decking of that site so that homes could be built above that work. Therefore, unless the new Mayor can work miracles, the prospect of building thousands of homes on that site has been lost for at least a generation, and perhaps permanently. What appallingly short-sighted planning, and that lies firmly at the door of the previous Mayor of London and the Government combined.
That is not good news. What is good news is that we now have a Mayor who has pledged to do his best to build not the 25,000 homes in London that we have seen, but the 50,000-plus that we need, and half of those will be genuinely affordable. I wish him luck. I will do everything I can, as will my local authority, to ensure that that happens, but it must be said that that is against a background of a Government doing everything through legislation to prevent people from having a secure, affordable home.
The vindictiveness of policies that enforce the sale of housing association properties by means of the subsidy from the sale of high-value council properties beggars belief. Boroughs like mine will be most affected, with up to 50% of council properties having to be sold over time. Why do we want to create insecurity for people in housing? That has all sorts of detrimental effects on people’s lives, and not just on their housing conditions, but on their health, the education of their children and so on. We have pay to stay; we have benefit cuts that are forcing people out of London; we have short-term tenancies, so people can no longer feel secure in their family homes; and, as Crisis said in its briefing for the debate, we have had a doubling of street homelessness since the coalition Government came in. It is now commonplace to use the term “social cleansing” to describe what is happening in my constituency. That is not an exaggeration, and it is no longer an emotive term but practical Government policy.
Yesterday I went to the funeral of a woman called Kathy Dolan whom I have known for many years. For many years beyond that, as tenants’ leader, she effectively ran the small, very nice Wood Lane estate, just next to the BBC television centre and opposite White City station. She made sure that people on that estate lived comfortable lives—she sorted out their problems and she dealt with the council—but in recent years she also had to fight developers. At mass yesterday, the priest was able to talk about the threat to established communities from developers. What an indictment.
We have strong communities in Hammersmith, as I am sure colleagues do around London, and we have many people who, like Kathy, work incredibly hard for no money and little recognition to sort out problems. They do not need the additional burden of vulture-like developers who have their eyes on their homes and want to make profit out of them, assisted by politicians who should know better.
Yes, there is a crisis in London housing. It can be resolved, but it requires us all to work together in the same direction to ensure that the people who work and live in London and have done for many generations can continue to do so. I am afraid that the policies the Government are pursuing are doing exactly the opposite.
It is a pleasure to contribute to the debate under your chairmanship, Sir David. It has the whiff of groundhog day about it as we regularly meet to discuss aspects of London’s housing crisis, but it is important to do so, and I very much congratulate my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) on securing the debate. The truth of the matter is that this is not a static situation. Things are getting worse, so it is important that we review the changing and worsening impact of London’s housing crisis and continue both to support the new Mayor of London—as everyone from the Labour side who has contributed to the debate has done—and to press the Government for a review of the policies that are likely to exacerbate an already critical situation and try to get some support for measures to respond.
Why are things getting worse? As we have already heard, the truth is that the escalation of London house prices, driven in large part by the failure of supply, is worsening housing inequality and therefore general inequality in the city to a catastrophic degree. My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) quoted a figure for rising house prices since the economic crash, but I think her figures may be slightly out of date as those I have seen today show that London house prices have risen by 91.6% since 2008-09. I do not have immediately to hand information on what London wages have done since then, but I can say that certainly at the lower end of the spectrum they have had a tendency to fall rather than rise. Therefore, despite the fact that the party in government has always traded as the party of home ownership, home ownership has actually been priced out of the reach of hundreds of thousands, if not millions, of people, particularly in London.
There has also been continuing pressure on support for people who need assistance to rent their homes; in the private sector alone 250,000 London children are growing up in families who need assistance to pay their rent. That squeeze on housing support is continuing and deepening, and there are further reductions to come in the local housing allowance, which will also exacerbate the situation. Of course, as my hon. Friends have said, the Housing and Planning Act 2016 will have an impact.
On the point about the LHA, I welcome the Government’s review. I hope it goes the right way and we realise the impact of the cap on supported housing. Does the hon. Lady recognise, not least in relation to Westminster, the impact on places such as Enfield of the pressure on temporary accommodation, and placements of vulnerable children with many needs? There is a need for a better, strategic way of handling such relocations. Property prices are cheaper in Enfield than they are, perhaps, in inner London. Placements of needy, vulnerable children are having an impact on outer London boroughs and there needs to be a better way of handling that across London.
I absolutely agree with the hon. Gentleman, although I am slightly baffled by the implications of his critiquing the policy of his party’s Government. I hope that the Minister is listening, because the hon. Gentleman is right.
The Housing and Planning Act 2016 will make the situation worse through reducing the stock of housing to rent; the extension of the right to buy to housing associations; the forced sale of so-called higher value properties in the social rented stock; the replacement, through planning changes, of the scope for negotiation of homes for rent in new developments with the starter homes policies; and the implications of pay to stay and fixed-term tenancies. We had many opportunities to discuss the measures and our concerns fell on deaf ears, but they are a poisonous cocktail and will only intensify London’s housing crisis.
Is my hon. Friend aware that in Brent the rent for an average two-bedroom property is £21,500 a year? If the rent for affordable homes was 80% of that, that would be £17,222 a year, when the national minimum wage brings in £13,852. The maths simply do not stack up for people living at the bottom of the scale in London.
My hon. Friend is absolutely correct. The result of all the different pressures together, with worse to come, has an impact beyond housing, strictly defined; it is changing the face of London, intensifying housing inequality, and changing the face of poverty and low incomes in London. The typical family in poverty is now, for the first time in modern times, a working family living in the private rented sector in outer London—that takes me back to the point that the hon. Member for Enfield, Southgate (Mr Burrowes) raised. Poverty is being suburbanised and intensified by what is happening in the private rented sector.
All that is bad for London’s economy. There is ample testimony from London First, the CBI and many other organisations that the housing crisis is making it hard to recruit, and is undermining the effectiveness of London’s economy. It is making it hard to recruit and retain staff in the services on which we all depend. However, it is also undermining London’s civic life—the health and wellbeing of the city—as people struggle to cope with the consequences of the housing crisis. Above all, it is bad for individuals—for struggling families and for young people seeking to find a stable home of their own in which to build a life and family.
Inner London is on the front line, because it has the steepest house prices, broadly speaking. How are inner London boroughs such as Westminster coping with that? Very badly indeed, I am sorry to say. Westminster produced just 46 new affordable homes last year. Over the past three years a mere 12% of all the development in Westminster has been affordable. That is less than half of the already appalling 28% London-wide average. That is the pattern across London. Areas with the greatest housing pressures have the worst supply of new affordable homes.
In the weeks before the London mayoralty election—it is no accident or coincidence—a number of new developments were pushed ahead for approval by Westminster City Council. The Whiteleys scheme in Bayswater has 103 luxury flats, just 2% of which are affordable. Paddington Green has 690 flats, 19% of which are affordable. There are other schemes in the pipeline. Westminster City Council is closing and demolishing the Jubilee sports centre—the Prime Place development—and the developer is marketing its properties in the far east before a single one has been built. In fact, it was marketing in the far east before the closure of the sports centre. Figures out this week show that there has been a 9% rise in the number of London properties owned by offshore companies. It is not simply that we are failing to build—although we are—but we are building the wrong properties, in a way that is part of a process of purchasing from overseas by the super-rich.
Developers are private companies and will behave as the Government permit them to do, and as they are driven to do by commercial logic, unless they are encouraged to do something different. They have been going into the luxury housing market. I was struck yesterday by the marketing brochure of the Galliard company:
“In order to keep up with the trend of trophy apartments and to give buyers what they want, developers are creating properties that offer nothing but luxury and indulgence. In fact, Kay & Co have released statistics that show that ‘35% of units under construction or completed in 2014 are in 5* developments.’”
It adds that according to
“Knight Frank’s Global Development Report from 2015, the amount of prime luxury properties…in London”
is up threefold since 2009. So we are building luxury properties, in some of which—such as the Vauxhall Tower—hardly anyone lives. We are building luxury properties that are a sponge for global money and the super-rich; and a not insignificant proportion of that money is dirty money.
Is my hon. Friend aware that in many new developments in central London, the flats—because overwhelmingly they are flats—are not even being advertised in Britain? I do not mean that in a nationalistic sense, but they are being advertised only in areas of the world where there are large concentrations of wealth and power. Does she think we are storing up an awful lot of social and economic problems for future years, if the trend continues?
I am sure my hon. Friend has found in her constituency as I have in my borough that often properties are built and whole blocks are sold over a weekend in Dubai, Hong Kong or such places. Those are not homes for local people. Does she have a comment on that?
That is absolutely right. It is the well-documented phenomenon of lights-out London. It happens particularly in the wealthiest parts of London, but also with some of those blocks my hon. Friend has mentioned, which are marketed as if they are in the heart of Knightsbridge but are not; properties are being bought up overseas and at the very best used for short-term lets or high-value student accommodation. They certainly do not provide homes. Of course, the consequence, to go back to the intervention by the hon. Member for Enfield, Southgate, is that London boroughs, and particularly those in inner and west London, cannot meet the demand from the people in the greatest need; so homelessness and housing pressures spill over from those boroughs. As it is, it costs Westminster taxpayers £4 million a year to meet the costs of homelessness that are not covered by other Government costs.
We are placing homeless households from Westminster in Enfield, Barking and Dagenham and Newham. Westminster City Council says that it would like to build permanent homes in outer London. I do not know what outer London thinks of that, because in outer London boroughs such as Hounslow and Sutton, homelessness is rising very sharply. I do not see why inner London boroughs should be allowed to get away with that. As the hon. Member for Enfield, Southgate said, those households are being placed far from their support networks, which puts additional pressure on services in the host boroughs.
A shortage of school places is just one example of such pressure. The latest figures show that Westminster has 1,200 unfilled school places, and yet we are exporting our homeless households all over. Meanwhile, in an outer London borough such as Redbridge, which is a receiving borough but also an exporting borough, there is a phenomenal situation, with pressures being dropped there and people having to be placed elsewhere. Only two weeks ago, Redbridge Council revealed that it was going to purchase an ex-barracks in Canterbury in order to place its homeless there, much to the chagrin of Canterbury City Council, which had been negotiating to get the property for itself. This is lunacy, and it is all consequential upon wider problems.
Meanwhile, some get lucky, and some will get luckier as a result of the Government’s Housing and Planning Act. The starter homes policy will be a windfall for households who have the bank of mum and dad and are on joint or single incomes of £80,000 or £90,000. Those people will be able to enjoy the benefits of the discount on a starter home, carry that forward and cash it in. Even Westminster City Council, which is not known for its caution on such things, warned the Government that the potential windfall of tax-free capital gain is “very considerable” and
“wholly to the benefit of a first-time buyer”.
Good luck to them, if that is what the Government want to do, but bad luck to everyone else who either cannot afford that or finds they are at the sharp end of the housing crisis.
Some of the people who have been in my surgery in the past few weeks will not be the beneficiaries or be able to afford a starter home, even though they would love to have one. They include the pensioner I met last week, who has been in his privately rented home for 27 years and whose rent has gone up from £750 a month in 2014 to £2,500 now. Many other individuals are in that kind of crisis.
The Minister needs to address that. He needs to make it absolutely clear that he understands the impact of the crisis and will get behind the Mayor in the measures he intends to take to provide a range of affordable homes across all tenures. The Minister needs to work with other Departments to ensure that the pressures that brought about this crisis in London are resolved, for the sake of our city’s health and for the many people who depend upon a decent affordable home.
It is a pleasure to follow such a comprehensive commentary on London housing policy. The critique from the hon. Member for Westminster North (Ms Buck) was well put together.
The long-term failure of successive Governments to address the underlying problems in the housing market is undoubtedly more evident in London than elsewhere in the UK. I agree with Members that certain aspects are unique to London, but for the most part this city is just the epicentre of problems affecting the whole UK to a greater or lesser extent. The crisis here in London reverberates to the other nations and regions of the UK.
I warmly congratulate the hon. Member for Brentford and Isleworth (Ruth Cadbury) on securing this debate on a set of issues that have an acute impact on her constituents. I assure her that there is a shared interest in addressing the problems in London, because they affect all of us. Every time the Library updates its briefings on London’s housing crisis, the statistics get more and more shocking. It is clear from today’s debate that the key structural issues are not new. There is a chronic under-supply of new homes, an absolute shortage of property in London and—just as problematic—an ever widening gulf between earnings and house prices, which is the affordability problem that has been the focus this morning. Add to the mix a private rental sector that is out of control and we have a recipe for the housing crisis currently faced by the people who live and work in this city.
Like other MPs whose constituencies are many miles from here, I am not a disinterested observer. I have to live in London for more than half the week during parliamentary Sessions, so I have first-hand experience of London’s housing and rental market, although I am aware that MPs have a much easier time than most prospective tenants. I have repeatedly seen the problems faced by staff members and others who live here permanently, and I recognise the issues that colleagues have highlighted today that affect their constituents. Those issues all relate to affordability. They include short-term and insecure lets, but also landlords who do not fix things, deposits that do not get returned for months after a tenancy ends, if at all—in spite of the deposit protection scheme that is supposed to stop that—people having to sleep on their friends’ sofas and floors and, above all, soaring rents. Every year, or every time a rent has to be renegotiated, the rent goes up.
Of course wages—certainly those in the public sector—have stayed static for some years now, and in many cases they have fallen in real terms. There is an ever greater squeeze on the incomes of tenants, who are left in a difficult position, having to work out whether the costs and hassles of moving and the extra commuting costs outweigh the disadvantages of staying put. That causes people enormous stress, upheaval and insecurity and it destabilises communities. As other Members have mentioned, it puts untold pressures on families with children. We have not got anywhere near measuring the cost of uprooting children in terms of their future prospects.
It goes without saying that many private sector tenants have no medium-term prospect of their owning a home anywhere near where they work, and even having a stable home is challenging for them. Even people in London with well-paid jobs—those with well above average wages and, as we have heard today, some of the City’s highest-paid professionals—find themselves in the invidious position of spending so much of their take-home pay on exorbitant private sector rents that saving for a deposit at the level now required is all but impossible. People have to eat, too. The cost of living is already high in this city, regardless of housing costs.
If the average home in London now costs more than half a million pounds—16 times the average London salary—what hope is there for young people trying to get on the housing ladder, many of whom are already carrying a mortgage in student debt? In what universe is that achievable or even desirable? Who wants to be saddled with a debt of that level in the current climate of economic uncertainty? Every time the Chancellor stands up in the Chamber, he talks about bringing down the debt. I am not the first to observe that meeting his own debt reduction targets is something that he has conspicuously failed to do. The levels of personal debt that individuals now need to carry in order to own a home or even buy a starter home, not only in London but in other hotspot areas too, are frankly crippling and completely unsustainable.
The Government’s obsession with home ownership is undermining the affordable rented sector, where, in my view, there is tremendous progress to be made in London for anyone willing to make the tough policy decisions. Points were well made earlier by the hon. Members for Hackney South and Shoreditch (Meg Hillier) and for Hammersmith (Andy Slaughter) about the use of public land and the need to measure the outcomes of house building programmes.
In the 2015 Queen’s Speech, the Government confirmed that they plan to force councils to sell off their low-rent homes in high-value areas, mostly as a means of financing the extension of the right to buy to housing association tenants, and—in theory at least—to incentivise councils to build more homes. However, doing that will not achieve either of those things. Its main outcome will simply be to reduce the number of homes for social rent in areas where low-cost housing is most needed and to force those on lower and average incomes to move further away from the communities where they live and work.
We have seen in the past that selling off social housing stock cheaply has long-term adverse consequences. The big sell-off in the ’80s and ’90s meant that councils all but stopped building new homes. It made no sense whatsoever to use public money to build new homes and then practically give them away. It has meant that now, right across the UK, there is a chronic shortage of homes for social rent for those on low incomes—those in low-paid jobs, those on zero-hours contracts and those whose ability to work is impaired by health problems. Some of those people will never be eligible for mortgages and will always need affordable homes to rent.
One of the great ironies is that, 20 to 30 years on, many of the same properties that were bought by tenants are once again properties for rent, but this time in the private sector, being let for market-level rents, often to people who would be eligible for social housing, if any was available. As a consequence, we have seen soaring costs for local housing allowance and its predecessor benefit over the last two decades, disproportionately concentrated in London and the south-east, driven by a private rental market that is simply out of control.
As numerous Members have pointed out, the people who have been most badly let down by all this are the younger generation. Even those with good jobs, who have worked hard for qualifications, have no realistic prospect of buying a home in which they can raise a family. We see adults living with their parents, not just through their 20s but well into their mid-30s, desperately trying to save. We see young couples moving so far out of London in order to put a roof over their children’s heads that they severely compromise their family life by enduring hours of commuting each day.
I am delighted that the hon. Lady has talked about the plight of young people in London, but does she realise that this is not just about young people? A constituent who had been living in the same property for 14 years came to me recently, having received a section 21 notice. At the age of 72, he and his disabled wife have not been accepted by the council and are sofa-surfing with friends who live in my constituency. It is not just young people but the elderly who are suffering because they are not accepted as priority-need homeless.
The hon. Gentleman makes a very important point. Frankly, what people are being put through in this day and age is quite disgusting.
The situation we have created is not good for people, for families, for people’s employers or for communities. It is not good for anyone and is completely unsustainable. The UK Government’s current direction of travel risks compounding the mistakes of the past, fuelling house price and rent increases, and failing to deal with the underlying lack of supply on anything like the scale required. All the fancy help-to-buy schemes in the world will only fuel personal debt, drive house prices higher and continue to inflate rents unless we actually build more homes to meet demand and take action to ensure that we have an affordable housing stock for people on normal salaries.
It is a pleasure to serve under your chairmanship, Sir David. I thank my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) for securing this debate and for her vivid description of the challenges facing London. Those descriptions were mirrored by what was said by Members from all across London—by my hon. Friends the Members for Hammersmith (Andy Slaughter), for Westminster North (Ms Buck), for Leyton and Wanstead (John Cryer), for Hackney South and Shoreditch (Meg Hillier) and for Brent North (Barry Gardiner)—and by what was said about outer-London areas such as Enfield, which the hon. Member for Enfield, Southgate (Mr Burrowes) mentioned.
I am an outer-London MP and I am contacted by constituents day in, day out about the housing crisis in our city—whether that is by parents with children in their 30s who are still living at home or by young families in their third private rented flat in three years. Just recently I was contacted by an older man who had worked all his life but, because of a marriage break-up, is now living in one room in a shared house without even a kitchen to call his own. Rents are skyrocketing, with demand outstripping supply in every section of the housing market. Some local authorities have started doing ambitious, innovative work, but most councils are stretched. One council in my area, Bexley, is often in the position of trying to rent or buy accommodation for homeless families but being it is being outbid by buy-to-let landlords—sometimes the very same ones who caused the homelessness in the first place.
Alongside that, many Londoners’ dream of owning their own home is fading fast. We have heard about house prices increasing enormously across London. Crossrail is about to come to Abbey Wood in my constituency. It will regenerate the whole area, but that also means that people from Abbey Wood can no longer afford to live in the place where they and their parents have lived all their lives. Many Londoners therefore find themselves in the private rented sector, where the average rent is twice the national average for all property sizes, and the gap continues to widen.
People are stuck in the private rented sector on insecure short-term tenancies, unable to save for a deposit of their own because of skyrocketing rents and letting agent fees. Many living in London are turning away from this wonderful city to pursue work and a home elsewhere, as my hon. Friend the Member for Brentford and Isleworth set out. As a result of the affordability crisis, many live in poor, overcrowded conditions. The last accurate figures we had were from the last census and they indicated that over 11% of households in the capital were overcrowded. I am sure that most of us will know from our postbags that the number is now far bigger—I think it would be at least double that, if not triple.
Unaffordable, overcrowded and insecure—that is the housing crisis we face, and it is one we must all challenge, because it affects every part of our society. Unaffordable and insecure housing causes problems right across society, from the people living in a Victorian terraced street that now has 25% of the properties as homes of multiple occupancy to the constant churn of pupils in and out of schools. In a primary school in my constituency, 30 pupils moved in and out in one term—that is a whole class in one term. We can only guess what effect that has, not only on trying to teach a class but on each child’s education. In my constituency there is a doctor’s surgery with 12,000 registered patients, a third of whom churn in and out every year. That makes it difficult for any public health awareness campaigns. There is rising TB, and on important issues such as diabetes, obesity and smoking, GPs have very little chance of building any sort of relationship with their patients.
Across our economy, unaffordable housing has far-reaching effects. Beyond the obvious impact on the amount of disposable income that each individual and family has, the impact on our local and regional economies needs to be looked at. There has been widespread concern about the affordability of housing in London from a variety of industries. The London Chamber of Commerce and Industry reports that almost half of London business leaders believe that the insufficient availability of homes is one of the top three barriers to London’s competitiveness. The situation is so bad that some big employers have begun to look at ways of solving the problems and have begun to take matters into their own hands. KPMG now offers employees a leg up on the housing ladder with discounted mortgages and Deloitte has taken up flats in the Olympic village in Stratford to rent to employees in order to provide more secure, affordable housing. However, the majority of Londoners do not have that help and are facing the affordability crisis alone.
The Royal College of Nursing has polled its members and reports that four in 10 respondents say that they are likely to leave London in the next five years because the cost of housing is so high—a figure that no doubt reflects the experience shared by many Londoners across the economy. As my hon. Friend the Member for Hackney South and Shoreditch set out, at one time it was care assistants who could not afford to live in London, but it is now junior doctors, GPs and surgeons.
The recent mayoral election was, I believe, a referendum on housing. Londoners resoundingly endorsed Sadiq Khan in that referendum. For eight years, the previous Mayor of London—currently the hon. Member for Uxbridge and South Ruislip (Boris Johnson)—had the chance to tackle the affordability crisis in London and he failed. We now have a Mayor who is committed to building housing to ensure that all Londoners have the opportunity to rent or buy a decent home at a price they can afford. However, the scale of the challenge we face in London, combined with the lack of land and the soaring cost of rental properties and properties to buy, means that things will not change overnight. This is not just about a lack of supply, but about what happens even when things come on stream and the supply is there. In my constituency, 700 new homes are being built on my street but there is not a single affordable property, so this is not just about supply.
The Mayor of London recently revealed that the previous Mayor delivered just 4,880 affordable homes in London in his last year—the fewest in decades. The Government’s new definition of affordable housing includes so-called “affordable rent” homes, for which tenants pay up to 80% of market rent, but 80% of very expensive is still very expensive. The new Mayor’s manifesto for Londoners pledges to set up Homes for Londoners, which will build the genuinely affordable homes that we need, including homes for social rent, homes for London living rent and homes for first-time buyers, while giving Londoners first dibs on homes to buy that are built on brownfield public land. The new Mayor will need the support of all of us in this debate to achieve that, and he will need support from Government for a devolution deal that gives London more power to invest in new homes and open up Government-owned surplus land for development.
This is not just about housing, but about life chances and stable communities. Just last night we saw what is great about our city with the coming together of Londoners for the vigil in Soho, in response to the Orlando atrocity. What makes London great is the Londoners within it, and they deserve a decent roof over their heads.
I will end by posing some questions, which I hope the Minister will respond to; if he is unable to, I hope he will commit to responding in writing. What representations from across the public and private sectors have the Department received regarding employees facing insecure and unaffordable housing? What analysis has the Department and the Treasury made of the impact on the local, regional and national economy of the lack of disposable income due to unaffordable housing? Can the Minister let us know about the work that the Department of Health is doing on the cost to the NHS of poor housing and when it will report its findings? Lastly, will he commit today to working with the Mayor of London to ensure that he is able to deliver the policies that were overwhelmingly endorsed by the majority of Londoners last month?
It is, as always, a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Brentford and Isleworth (Ruth Cadbury) on securing this debate on the important issue of affordable housing in London. I can assure her that this is a top priority for this Department and this Government. In the short time that I have today, I will endeavour to respond to the points made by hon. Members.
The demand for affordable housing in London is without doubt challenging. It is clear that the new Mayor has a significant task ahead of him to meet the needs of the growing population in such an important world city. A number of hon. Members asked whether we would work with him, and we certainly look forward to doing so. We all share the same ambitions—to build more homes in London and to help more people to own their own home.
We have a good track record. Since 2010, we have delivered more than 710,000 homes, including 277,000 affordable homes—67,000 in London. Our affordable homes programme delivered 193,000 affordable homes between 2011 and 2015. Last year was a record year for London. We delivered 27,000 homes, including 18,000 affordable homes—the most since records began in 1991. We were the first Government since the 1980s to finish with more affordable homes than when we started. Since 2010, we have helped 290,000 households to become homeowners, thanks to schemes such as Help to Buy and right to buy. However, even though we have delivered a record number of homes in London, there is without doubt more work to be done.
I will make some progress before giving way, because I am short of time.
Only one third of new homes in London were delivered through the open market. With London’s housing challenges, the market needs to do more, and the Government are certainly doing more. We are focusing on three things—streamlining the planning system, helping Londoners into home ownership and ensuring that housing stock is managed fairly and effectively.
We are introducing further reforms. The Housing and Planning Act 2016 gives house builders and decision makers the tools and confidence to deliver more homes and streamline the planning system to accelerate delivery. Planning permission in principle will provide greater certainty, and registers of brownfield land will make it easier to identify suitable sites, which are at a premium in London.
However, the reforms need to be implemented effectively in every area. We need to see more homes that are planned for actually being built. We have consulted on a new delivery test that drives action where build rates are below expectation. We have been working with the major house builders on how they can be clearer about their delivery plans, and I welcome the statement of intent published by the Home Builders Federation just last month.
We are doubling the housing budget to more than £20 billion to deliver 1 million more homes by the end of this Parliament. That includes £8 billion for 400,000 affordable housing starts, including 100,000 affordable homes for rent. That is the largest affordable housing programme by any Government since the 1970s.
We know that 86% of people want to buy their own home, and we certainly support their aspirations. That is why our programme to support home ownership is so important. With shared ownership, London’s first-time buyers will be able to get on the ladder with a far smaller deposit: £3,500 will secure a 25% stake in a property. Our new London Help to Buy scheme increases the equity loan available from 20% to 40%, and our help to buy ISAs are helping people to save up a deposit for their first home. Our voluntary right to buy gives 1.3 million housing association tenants the chance to buy their homes.
We will build 200,000 starter homes so that young first-time buyers will be able to buy their first home with a minimum discount of 20%. Legislation will place a duty on planning authorities to embed starter homes in the planning system. That will be supported by £1.2 billion of funding to unlock brownfield land. For high-value areas, the Housing and Planning Act allows for off-site commuted sums for delivery elsewhere. We are consulting on the details of how that will work.
We need to make better use of the existing housing stock. The market value of council housing stock in April 2014 was more than £200 billion. By selling councils’ higher-value housing as it falls vacant, we can release the locked-up value to build more homes and fund the right-to-buy discount for housing association tenants; and we will absolutely ensure that for every council house sold in London, at least two affordable homes will be built.
It is all very interesting to hear what the Government are planning nationally, but this debate is about housing in London. On the issue of the sale of high-value council properties, there are properties in my constituency that will have to be sold under the current Government proposals. The hon. Member for Torbay (Kevin Foster) has no council housing in his constituency, because it was transferred, so homes will be sold in Hackney to pay for people to buy their homes in Devon potentially, unless the Minister is able to commit now to ensuring that there is at least a ring-fencing of the money from the sale of council homes for right to buy, so that it stays within the M25.
As the hon. Lady will know, we are working up the plan for higher-value social homes that will be sold. At the moment, it has not been made clear which properties will need to be sold, but certainly they will only be properties that are vacant; and just to reassure her, we are absolutely clear that for every house that is sold in London, at least two affordable homes will be built.
I need to make more progress because I am very short of time.
We have helped to unlock major regeneration sites in London and we are investing £600 million to create 31 new housing zones in London, which will deliver 77,000 new homes by 2026. In the last Parliament, we released public sector land with capacity for 109,000 homes. We will release more land, and at least 160,000 homes will be built. The London Land Commission will continue to be an important way of engaging with the public sector to release more land for housing.
In the short time that I have left, I will pick up a few of the points that hon. Members raised. First, there was an assertion that people buying starter homes would need a minimum salary of £90,000. I am sure that many hon. Members will have seen that Shelter has done research on that, based on 2016 housing values. It came to the conclusion that people would be able to buy on salaries of £45,000 and it predicted that 30% of the people in London who are currently in private rented accommodation would be able to buy a starter home on that basis.
Another assertion was about the supply of homes. I find it difficult to comprehend that so many Opposition Members are criticising this Government’s action on providing affordable housing when, between 1997 and 2010, 420,000 affordable houses were lost from the system. I can assure hon. Members that this Government are absolutely committed to bringing forward new affordable housing. We are introducing an £8 billion programme to deliver 400,000 more affordable houses; 135,000 of those will be for shared ownership—that was a concern raised during the debate—and 100,000 of them will be affordable homes for rent.
Let me settle some concerns about the right to buy in London. Since the reinvigorated right to buy was introduced by my party as the lead party in the coalition during the last Parliament, in London, where right-to-buy housing sales have been made, on average roughly two additional homes have replaced that stock. I am getting a polite stare from you, Sir David, so I will conclude now for the mover of the motion.
I regret that the Government have not acknowledged the distorting use of the term “affordable” and that none of the Government initiatives will be of any help to people on low or average pay or those on uneven incomes, such as those on zero-hours contracts. There is so much that is wrong in the starter homes and right-to-buy initiatives. They do not deliver truly affordable housing—new housing—to Londoners in need.
Motion lapsed (Standing Order No. 10(6)).
I beg to move,
That this House has considered plutonium disposition.
Thank you for calling me to speak, Mr Amess—sorry, Sir David; I apologise for forgetting to use your richly deserved and overdue title.
Plutonium disposition is a subject that is vital to the country. It is important to me personally, to my constituency and to every single one of my constituents. Plutonium is one of the most powerful and potentially dangerous materials on the planet, and the largest stockpile of plutonium oxide anywhere in the world is stored at the Sellafield nuclear facility in my constituency. It is a sobering and inescapable reality.
Sellafield represents one of the UK’s most strategically important pieces of national infrastructure. It was created by the Attlee Government after the second world war and the United States’ McMahon Act, which forbade US co-operation with any other nation state on nuclear research. The initial purpose of Windscale, as Sellafield was then known, was to produce the materials this country required to create, provide and maintain our independent nuclear deterrent. The decision to do that remains one of the most important made by the post-war Labour Government, or any other British Government since that point. It also remains one of the many towering achievements of that post-war Labour Government.
It is beyond doubt that our nuclear deterrent has protected us and our allies, and maintained peace on our continent. The evidence is before us. In an ever more uncertain world—a world that, right now, appears to be on fire—it would be an extraordinary act of stupidity for any Government to consider removing our deterrent. In the face of a belligerent and expansionist Russia, the evidence is that circumstances will remain stable at best in the future. I digress. The point is that my community has performed a unique role in the service of this nation for more than 60 years. As a result, the nation, its centre of Government and Governments of all colours owe a specific obligation to my community.
Issues of national interest do not wear party colours and, as with nuclear new build—the Minister knows that I walk the walk on this—they are above petty partisan squabbling. The nuclear industry is of unique importance to my constituency. West Cumbria is a world leader in nuclear excellence, and we are working tirelessly as a community to realise the energy coast vision that I have been working to deliver for more than a decade. The vision came into being when Sellafield was projected to lose 8,000 of the 11,000 jobs on the site by 2014. That was one of the original forecasts for the end of reprocessing at Sellafield, and I am glad to say that we turned that around.
I am a former Sellafield employee and a third-generation nuclear worker. Copeland is the most remote constituency from Westminster in England. The Sellafield site alone sustains about 16,000 jobs—probably more—in west Cumbria, directly and indirectly. I doubt that any community in the country is so reliant on a single employer, which brings its own problems.
Future investments in the constituency as a result of NuGen’s proposed three new nuclear reactors at Moorside will create many more jobs and opportunities in my community. Thousands of jobs will be created as a result of the £20 billion investment, and Copeland will become one of the fastest growing economies not just in the UK, but in Europe. It has taken us 10 years to reach this point, working with successive Governments. The developments have taken place not by accident but, as the Minister knows, by design.
In stressing the national Government’s obligations to my community, I make the case for plutonium as a national asset. West Cumbria and Britain have the potential to lead the world with an effective plutonium disposition strategy. The management of the UK’s plutonium stockpile is an important and pressing issue facing the nuclear industry in my constituency and the whole country. Although movement on the issue has been going forward incrementally for a decade, it has been substantively delayed for too long.
The decision to be made by the Government is this: do we view the 140 tonnes of plutonium oxide sitting in my constituency as waste or as an asset? The three prevailing options that have been considered by the Government in recent years for the management of plutonium include: treating it as waste and looking to dispose of it deep underground; converting it into mixed oxide fuel, otherwise known as MOX; or using it as a nuclear fuel in a new type of reactor, such as the PRISM fast-breeder reactor.
If we choose to view the stockpile as waste, it will cost billions of pounds of taxpayers’ money in treatment, storage and eventual disposal. That would be to reject taking a long-term effective and strategic approach to the management of the material. In essence, the Government would be opting out of adopting an integrated approach to Britain’s commitment to new nuclear technology.
If, however, the stockpile is classed as an asset, its value will be enormous—perhaps unquantifiable—and it will be of significant worth to the British economy now and in the future. To facilitate the realisation of that potential, I hope that the Minister will commit to avoiding further delays by implementing a structured plan with a fixed timeline, so that the plutonium that is stored in my constituency, which is the largest stockpile of its kind in the world, can be utilised as nuclear fuel. Britain would then benefit, and not simply economically; such a decision would help us to meet our non-proliferation objectives, secure our energy supplies and fight climate change.
I fully expect the Minister to state that we have already made the decision to classify the plutonium stockpile as an asset and not waste, and that we are now evaluating which technical process and commercial platform we wish to utilise—MOX, CANMOX or PRISM. Without a structured, timetabled plan, there is the same practical policy outcome, whether the plutonium is theoretically an asset or waste: indefinite storage. The inadequacies of the approach are obvious, not least because of the changing nature of some of the stockpile owing to the presence of americium and other actinides, all of which make future disposition more difficult and expensive. A delay will have consequences, and a deferred decision will have real effects and a real price tag.
I will focus a little on what plutonium disposition means for my community. West Cumbria is a global centre for nuclear excellence. Skills and expertise in decommissioning at Sellafield, research and development at the National Nuclear Laboratory, and future investments at Moorside and the National Nuclear College all require a joined-up, holistic, forward-thinking, integrated approach to plutonium management and technology development. To continue to lead in the field, west Cumbria and the country must be provided with the necessary investment and tools needed to transform a complex and, for some, intractable policy problem into what should be a powerful asset for the benefit of everybody in the country.
West Cumbria has proven, time and again, to be an invaluable partner for Governments of all colours. Our skills, and our ability and willingness to host nuclear facilities, are unique and invaluable. As I have outlined repeatedly over a number of years, if the Minister provides the urgent clarity required on this significant issue of public policy, my community can and will provide the partnership to find the solutions that Britain needs to manage our nuclear stockpile. That is clearly an excellent, unprecedented opportunity for the Government and for my community.
In addition to contributing to the British, west Cumbrian and Cumbrian economies more generally, the use of our significant plutonium stockpile as an asset will help us to produce the fuel we need, through carbon dioxide-free electricity generation from new nuclear, and thus secure our energy supplies. My community and the country need that, and my constituents deserve nothing less.
There is a need for speed. The case for using our plutonium stockpile as an asset is substantial. We know from the coalition Government’s response to the consultation on the proposed justification process for the reuse of plutonium that the Government’s preferred option for managing the stockpile is to create MOX fuel for sale on the international markets. Lord Marland set that out during his time as Under-Secretary of State at the Department of Energy and Climate Change. In January 2011, he stated:
“If we have the biggest plutonium stock in the world, we must turn that liability into an asset...It is madness to have it sitting there if we can make it a non-cost exercise.”
In the same speech, he set out the importance of sending
“a clear message to the people of Cumbria, because that is where the Mox plant would be located.”—[Official Report, House of Lords, 13 January 2011; Vol. 723, c. GC177.]
However, disappointingly, the overall illustrative timeline for plutonium management in the UK, as set out in the coalition Government’s consultation response on the long-term management of UK-owned separated civil plutonium, has not come to fruition. In fact, little movement has been made on the issue. Given the existence of the technology and the ability of the industry to provide such a facility, further delays should not be allowed. Time is of the essence. The longer we wait to make a decision on the issue, the more difficult it will become to implement.
Industry, investors, the supply chain, the workforce and the community in my constituency now require overdue clarity and certainty from the Government; I would be asking for the same clarity and certainty if my party were in government. Understanding the Sellafield workforce and their role in our national story over the past 60 years is essential, and it has not been broadly understood by successive Governments, or in Whitehall.
Sellafield is unquestionably home to some of the most highly skilled, uniquely talented workers in the United Kingdom—and, in a nuclear industry context, the world. They are a knowledgeable, practical and pragmatic workforce who routinely work in some of the most challenging, high-risk environments anywhere on the planet. Make no mistake: our country’s ability to decommission Sellafield safely and to budget rests on the shoulders of that workforce, and, as such, they should be valued. Of course, improvements can and should be made to better utilise the workforce’s abilities—they would be the first to suggest that—but they are not the workforce that is described by the Department; they are not a feather-bedded, entitled, unproductive workforce. On the contrary, they mend the problems that politicians often create.
Those who visit Sellafield, as I believe the Minister has—I am grateful to her for taking such a close interest in these issues over a serious length of time—see that a political decision usually stands behind every decommissioning challenge that can be seen on the site, from the original Windscale pile chimneys and the legacy fuel issues created in part by the chaos brought about by the miners strikes of the 1970s to the closure of the Sellafield MOX plant in August 2011. I am tempted to write the political history of Sellafield, which is arguably more important than the technical or engineering history of the site, at least in so far as it can explain why the site is as it is today. At every turn, the Sellafield workforce have been at the forefront of those political decisions, bearing the brunt of the consequences, for good or for ill, always acting in the national interests and always in the national service.
The closure of the Sellafield MOX plant in August 2011 was accepted by the Sellafield workforce because they had been promised—I use that word precisely—that it would be replaced by a new plant, and that neither the workforce nor the community would be left to accept job losses as well as a lack of solution on the plutonium stockpile, of which we are essentially the custodians. The workforce are waiting for that trust to be repaid, and they are waiting for the solutions they were promised.
The Government recently introduced a programme of workforce reform at Sellafield, and I tabled a series of questions about that to the Secretary of State for Energy and Climate Change. Those questions have been replied to, but in time-honoured fashion, they have not been answered, which is why I have sought a meeting between workforce representatives and No. 10. As things stand, it is not clear who designed the workforce reform plan, what its objectives are, what the effect will be on the local community and on the workforce, what the estimated effect will be on the public purse or how it will ensure safer, quicker and more efficient delivery of decommissioning. I hope the Minister will undertake to give me a written response to all those questions and concerns prior to the workforce delegation meeting at No. 10. Fundamentally, there is a compact here—particularly in the light of the Trade Union Act 2016, which changed the rights of the Sellafield workforce—that risks being broken. The compact is between the state and the men and women of the biggest workforce in my community. The Government can help to restore the compact by introducing a clear, coherent, timetabled plan for plutonium disposition.
The need for the Government to take a long-term view on plutonium stockpiles is of the utmost urgency. Given Britain’s commitment to new nuclear and the process in train to identify a site for the long-term geological disposal of radioactive wastes, these essential, long-term decisions can no longer be put off. They are, in fact, part of a holistic national solution. By investing in and adhering to a strategic plan to utilise Britain’s plutonium stockpile as an asset, we will not only create an economically beneficial solution to a no doubt complex issue, but further integrate nuclear research, knowledge and development in west Cumbria, thus continuing to establish the west coast of Cumbria, and indeed our country, as a centre of global nuclear excellence.
I am in no doubt that the Minister, the Department, my community, the Sellafield workforce and I all want the same thing, but it is essential that we agree on the how as well as the what. The Minister knows that I am filled with appreciation for her work, and I look forward to her reply.
It is a great pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Copeland (Mr Reed) on securing this debate. We share a great enthusiasm, as he said, for the enormous potential of the UK’s nuclear expertise in decommissioning, reuse and new nuclear. He is a keen advocate for his area, which includes both Sellafield and the potential new nuclear plant at Moorside. I pay tribute to all the amazingly talented engineers who work so hard at Sellafield and on the new project. He is exactly right that one of the first things I did on taking up my post was go to Sellafield to see for myself the incredible engineering feats, the imagination, the innovation and the hard work. It is absolutely superb. I hope I can reassure him that the workforce reform is indeed designed for hazard reduction and greater efficiency and is in no way designed to undermine the efforts of those at Sellafield who are working so hard. I will certainly write to him again, as he asked, to set that out in greater detail.
I am pleased to have this opportunity to discuss and debate the important issue of the UK’s plutonium inventory. The material is largely the result of the ongoing reprocessing at Sellafield since the 1950s. In fact, just a couple of weeks ago, I went up to the National Nuclear Laboratory and was impressed to see what they are doing there and to hear that they are 25 years ahead of the rest of the world in sorting, identifying, reusing and dealing with the legacy of nuclear that dates back decades. That is so impressive and is a real UK strength.
Demonstrating that we can address our own and others’ nuclear legacies is key to ensuring that the industry retains the support of the public as we move ahead with our new nuclear programme. It is imperative that we do not make the mistakes of the past but that we learn from our own and others’ nuclear history as we deliver a new generation of low-carbon nuclear power. The UK led the way on developing the world’s civil nuclear industry, and I expect us to continue leading the way on dealing with our nuclear legacy, too. For that reason, I reassure the hon. Gentleman that managing our civil plutonium inventory remains a Government priority.
As the hon. Gentleman is aware, dealing with our nuclear legacy comes with significant and complex challenges. Close collaboration between the Government and industry is essential to achieving a solution. Over the past decade the Government, supported by the Nuclear Decommissioning Authority, have developed the policy and strategy framework for managing the UK’s inventory of separated civil plutonium. We are working closely with the NDA to ensure the safe and secure storage of the material at Sellafield and to plan, develop and implement a management solution for separated civil plutonium in the UK until the inventory has been reduced to zero and is put beyond reach. A key focus of that strategy is hazard reduction, which means addressing Sellafield’s legacy facilities. Putting the material beyond use will take many decades, so we therefore need to ensure that all nuclear materials are stored in modern facilities that are safe and secure. A huge amount of work is already being done on that.
Since consulting on the issue in 2011, work has been under way to help us better understand the disposition options available. The Government commissioned the NDA to report on the latest round of evidence to enable the UK to move confidently into the programme’s implementation phase. The NDA’s report was delivered quite recently, in December 2015, and gives us a much better understanding of the technical issues relating to all aspects of the lifecycle, including a regulatory review of licensability, along with establishing the likely costs and schedules to implement each option. Those options include immobilisation by using a hot isostatic pressing technique, which involves converting the inventory into a ceramic waste form suitable for disposal in the geological disposal facility—the hon. Gentleman knows that that facility is in our plans. The immobilisation option is important because, regardless of the overall solution for plutonium disposition, a proportion of the plutonium will have to be disposed of as it will be unsuitable for use as a fuel.
The reuse options considered include MOX in light water reactors as proposed by Areva, MOX in a CANMOX reactor as proposed by Candu and use in a PRISM fast reactor as proposed by GE Hitachi Nuclear Energy. The report also highlighted where further work is required to enable an informed decision to be made.
The NDA has been quite clear with the Government that for each of the options, there is insufficient understanding as yet to move confidently into an implementation phase at this stage. Significant further work must be undertaken to understand the technologies being proposed. The different technologies have varying degrees of maturity, and quite a bit more work is required to enable the UK ultimately to select and subsequently implement a preferred option. We must be mindful of the experience of others, looking internationally to help find a solution for the UK.
The hon. Gentleman will be aware that we want to learn the lessons from the US, which faces significant challenges involving a multi-million-dollar overspend in its MOX programme. Understanding that will be crucial to considering the full range of reuse and immobilisation options. That is why a decision on how to proceed cannot and will not be taken quickly. It is about making the right decision at the right time, underpinned by the right evidence. It is important to note that any decision will take many decades to implement, which is why a decision on plutonium disposition should not be made in isolation. There are interdependencies across the new nuclear build programme, geological disposal and national security outcomes.
The Government take the issue very seriously. Provision has been made in the NDA’s budget to continue making meaningful progress on this important and complex issue. The Government are working with the NDA to scope out the next phase of research and development required to progress the decision by de-risking technology options, giving Government the confidence to move forward to a final solution.
I can tell the hon. Gentleman that although the decision cannot be rushed, all the options being considered will lead to more job creation in his area and significant investment. That will create big opportunities for local communities. As we develop our wider innovation programme, we are also considering ways to support that work through various research facilities. The Government remain open to any credible option for managing the inventory, but of course it must offer the best value for money to the taxpayer. Only when the Government are confident that our preferred option could be implemented safely and securely with an eye to cost—that it is affordable and deliverable and offers value for money—will we be in a position to proceed. The Government remain committed to working collaboratively to find a solution that will benefit us all.
In conclusion, I am grateful to the hon. Member for Copeland for his continuing co-operation and his collegiate reaction to these long-standing issues. I am happy to continue working with him in this area.
Question put and agreed to.
West Coast Rail Franchise
[Mr Graham Brady in the Chair]
I beg to move,
That this House has considered the West Coast rail franchise.
It is a pleasure to serve under your chairmanship today, Mr Brady, for what is my first Westminster Hall debate of this new Parliament.
I should mention that I am the chair of the all-party group on the west coast main line. The group takes a keen interest in the line; we have met the operator and the franchisees, and recently we visited Euston station itself. I also thank and pay tribute to the West Coast Rail 250 group for its support and assistance, and for being a source of information. It is the secretariat to the all-party group and it has been of much use to us.
The forthcoming franchise is extremely important for the west coast rail line. The line is, in my view, the most important inter-city line in the country. It connects the great cities of our country—namely London, Glasgow, Manchester and Birmingham—and it links many smaller cities and major towns on the west coast of the country. Of course, I could not neglect to mention my own constituency, the city of Carlisle, which is a key railway city. Indeed, there are four railway lines that connect into Carlisle: one going to the west coast of Cumbria; one going to Newcastle; there is, of course, the famous Settle to Carlisle line; and of course there is the inter-city connection between Glasgow and London. So, the west coast line is one of the most significant and indeed vital transport links for the west of the country.
The line was originally built between the 1830s and the 1880s. It was not built as one line; it was a series of lines that ultimately got connected together. That period was the key time for investment in the line, but between 1955 and 1975 most of the line was electrified. In total, there are about 700 miles of track.
After world war two, as we all know, the railway system went into decline. There was a lack of investment, a lack of interest in the network and a decline in passenger numbers. That was true for many rail lines across the country; many lines were shut and so were a number of stations. Fortunately, the inter-city connections continued. Even though they may have had issues, they remained in use.
Then we started to see the revival of the railways in the 1990s, with the introduction of the franchise arrangements, which remain the arrangements today. On the west coast, about 17 stations are under the franchisee, although Network Rail continues to manage three of the key stations, namely, Euston, Manchester Piccadilly and Glasgow Central. On top of that, there are a number of other stations that are not part of the franchise. From an employment point of view, the west coast rail company—effectively, Virgin Trains—employed just over 3,000 staff in March 2015.
We have seen a dramatic increase in passenger journeys. In the 18 years since the start of the franchise system, the number of annual passenger journeys in Britain has risen from 845 million in 1997-98 to 1.65 billion in 2014-15, which is a faster rise than for any other major European rail system. In the past three years on the west coast line itself, annual passenger journeys have gone up from 30.4 million to 34.5 million, so that from the start of April 2014 to the end of March 2015 4.3 billion passenger miles were travelled. Indeed, passenger journeys have grown by around 20% between 2010 and 2015.
The majority of the demand for rail travel on the west coast line is for journeys to and from London. There are around 300 train services every day on the west coast line, with journeys to and from London accounting for 63% of those services. Typically, journeys on the line are long-distance journeys, with approximately 60% of them being over distances greater than 100 miles. Of the journeys made, around 66% are for leisure, 23% for business and 11% for commuting purposes; many of the commuter journeys are made with season tickets.
The London terminus at Euston, which is obviously essential to the west coast line, is the sixth busiest station in the country, and outside London the stations at Birmingham New Street, Manchester Piccadilly and Glasgow Central are three of the four busiest stations in the country.
I was extremely interested to learn about the number of journeys and of passengers using this important line up the spine of the country. Does my hon. Friend agree that by about 2024 it is expected that capacity on the west coast main line will be 100% and bursting at the seams? That is why it is so important that we move ahead with building High Speed 2, to provide some extra passenger capacity.
My right hon. Friend hits the nail on the head with regard to the key issue with HS2, which is capacity. He is absolutely right that on many parts of the west coast line capacity is already becoming an issue, and that situation will continue as we approach the 2020s. Therefore it is vital that we invest in the rail network and HS2 is very much part of that.
Funnily enough, the line is not just about trains and stations; it is also about the track itself. In recent years, we have seen significant investment—of almost £10 billion— in the track on the west coast line. That investment has led to a huge improvement in capacity, reliability and punctuality. As a user of the line myself, I have certainly seen significant improvements in the punctuality of the service, and in the level and quality of customer services provided at both stations and on the trains themselves. However, quite clearly there are still many issues that remain to be dealt with, one of which many colleagues will understand—wi-fi. Overall, however, there have been big improvements since the start of the franchise system.
Also, we must not forget the benefit that there is to the taxpayer from the franchise system. Between 2008 and 2015, the overall payment to the Exchequer from the franchisee was roughly £650 million and over the entire franchise period nearly £1 billion has been paid to the Exchequer. As for passenger satisfaction, in autumn 2015 overall journey satisfaction with the existing west coast franchise was 91%, which was 4% higher than the average for the long-distance sector. Clearly that is good, but there is also room for improvement.
Indeed, the areas where the west coast franchise could improve were identified by the Transport Focus group in its report. The group highlighted the areas that passengers were most concerned about: availability of seating at stations; car parking facilities; luggage space on trains; toilet facilities; and of course value for money in the price of the tickets. Overall, therefore, comparing where we are today with where we were in 1997, when the franchise scheme started, I would say that the west coast service is much improved, but there is still room for further improvement.
Also, it would be neglectful of me if I were not to mention the aborted attempt at the franchise renewal a few years ago. Without doubt, that was a considerable setback for the Department for Transport and it will undoubtedly have put back investment and development of the service. I appreciate that we now have an interim arrangement under a direct award, which expires in April 2018. Clearly, that has been the short-term solution.
I also acknowledge the contribution that Virgin West Coast makes. It has done an excellent job. Quite clearly, it will be in competition with other rail transport companies for the next franchise, but at least it has set a benchmark that we can build upon.
There have been improvements within the direct award scheme, with investment in stations, the provision of wi-fi at stations and one or two other things. However, the situation is not the same as it would be with a full franchise; there has not been the same level of necessary improvements or the same commitment, which are what we wish to see.
I do not want to go into the many reasons why the previous franchise did not happen; we need to look forward and not to the past. Suffice it to say that I hope the Government have learned from the experience, and so far my contacts with the Government have been positive.
The really important thing is where we are today and how we can ensure that we get the new franchise right. It needs to be right for passengers.
I thank my hon. Friend for securing this debate. Does he agree that some of the reported proposals, including reports that there might be cuts in services to stations such as Birmingham International, would have a detrimental effect on the west midlands economy and Birmingham International airport?
One of the reasons for having this debate was so that hon. Members could have the opportunity to highlight key issues for their own area. I am delighted that my hon. Friend has been able to do so and I am sure that the Minister will be listening keenly.
My hon. Friend is very kind. Birmingham International airport is in my constituency. Is my hon. Friend aware that a reduction in service at Birmingham International train station would threaten that regional airport? It is a significant international airport, serving a region the same size as Denmark, and it already does not receive a service from London in time for passengers to catch the early morning flights.
My right hon. Friend makes a valid point. Indeed, we must not lose sight of the fact that there should be integration within our transport system, between the railways, the airports and the road and bus networks.
The important thing about the new franchise is that we get it right. It needs to be right for passengers, fair for the taxpayer, right for the industry and right for those who work in the industry—we must not overlook their contribution to the network. Therefore, the level and quality of service, investment in all aspects of service and ticket pricing are some of the key issues. I am sure that other Members will have their own issues, but I want to concentrate on four in particular.
First, there is the customer and service level. It is often the small things that matter, particularly to passengers and customers, and there is key evidence of issues that customers want the forthcoming franchise to address. These include car parking—the pricing, the number of spaces and the availability at key times. Another issue is luggage and storage on trains. Many people have commented that the storage is at the end of each carriage and they would prefer it to be closer to where they are sitting. They have also commented that there should be more space for luggage. Toilet facilities and wi-fi clearly need improvement. Wi-fi has improved at stations, but there is definitely an issue—I speak from personal experience—on the trains themselves, and customers are keen to see wi-fi improved.
Then we have congestion. Carlisle, I have to confess, is a quiet station compared with many others, but at Euston there is what many call the Euston sprint—people charging for the train, sometimes in an unedifying manner. There is clearly room for improvement on that in the franchise in the future. Customers’ views and opinions need to be heard, and there needs to be an appropriate conduit between the customer—the passenger—and the train companies and, indeed, on into Government. In my own experience, customer care has been positive overall, but customer service questionnaires demonstrate that there is still a lot of room for improvement.
Then we have ticket pricing. What is the Government’s overall aim? What balance do the Government want to see between the taxpayer and the passenger? What about the link between the retail prices index and the consumer prices index? What about competition? Those issues need to be addressed in the forthcoming franchise. I appreciate that revenue raising and the balance between the taxpayer and the passenger are important for the Government, but they are also important for the passenger and the taxpayer.
I congratulate my hon. Friend on leading the charge on this issue. The things he has listed are best addressed if there is proper competition in the franchise process. Does he agree with me and the National Audit Office that unless the Government get at least three or four participants in the bidding process, there will be a risk of inadequate competition? Does he also agree that, although Virgin has given an adequate service—in some ways, a good one —the Government must ensure that it does not have too big an incumbency advantage in the bidding process?
My hon. Friend makes two valid points. There must be competition. We need to encourage many different businesses to come in and challenge Virgin for the franchise, to ensure that we get the best possible franchise for the taxpayer and the passenger.
We need transparency and simplification. The ticket-pricing system needs to be easier for the consumer—the passenger—to understand. I accept that there are technological changes going on, and it would be interesting to hear from the Minister how she wants to drive them forward. I am old-fashioned, and when I go on the train I have my tickets in my hand while many people get out their mobile phone. Such advancements are positive, but I am interested in the emphasis that the Minister wishes to place on them in the new franchise.
The third issue is clearly Euston station itself. As I have mentioned, it is the sixth busiest station in the country, and to a significant number of passengers it is the only station that matters. We have HS2 ahead, and there will be a huge change at Euston with the substantial development works there. How will the Government ensure that the works are done in a timely fashion, and what will they do regarding the certain disturbance over a long period? There will be an impact on timetabling and a restriction on the innovation that train companies can bring about, and there must be a question over the punctuality that services will be able to attain during that time. There will be a reduced number of platforms, which will clearly affect the next franchise. The customer—passenger—experience will be a concern, as usage could be affected. There is a commitment for the timetable to continue as it is, but if we get to a stage when trains are not arriving on time, there will be a danger that passengers start to look elsewhere—to other ways of getting to and from London. I am, therefore, very interested to hear what the Minister has to say about the proposed Euston development.
Then we come to station investment. I have talked about Euston. Clearly investment there is a key issue for many, but we must not forget the smaller towns and cities up and down the west coast line—for example Preston, Milton Keynes and my own city of Carlisle. Will the Minister confirm that the stations—I think there are 17 in total—will come under the control of the franchisee rather than of Network Rail? Will she also confirm that any leases that are produced between Network Rail and the franchisee will allow the maximum amount of investment and a high degree of flexibility? Most important, will she confirm that there will be a mechanism for the payment of residual value in the event of a change at the end of a franchise? The all-party group is very concerned about that, because in the last proposed franchise we had confirmation that a residual value clause would be incorporated into the agreement, but that turned out not to be the case. We are, therefore, seeking reassurance that such a mechanism will be included in this franchise. It has been mentioned in the past that the northern franchise has an element of that mechanism, but our investigations and discussions have shown that the present clauses are inadequate and need to be beefed up in the new franchise.
I firmly believe that, with a residual value clause and encouragement by the Government to invest in stations, we can go beyond the passenger rail experience to opportunities for business, retail and other such things. If I may use my own constituency and railway station as a good example, Carlisle is a prime centre for investment and a real opportunity for an ambitious franchisee. However, we need the mechanisms to be in place.
In conclusion, the key issues include Euston, the impact of HS2 on the franchise and what the Government intend to do about it. Further reassurance is needed that investment in the west coast line will be maintained even though a lot of money will be spent on the HS2 line, and the Minister must continue to ensure that Network Rail considers opportunities to increase capacity on the west coast line in addition to the increased capacity from HS2. More specifically, we need to put the consumer—the passenger—at the centre of the franchise, and pricing and customer service are important aspects of that.
For me, one of the most important things is station investment. We must not lose sight of the fact that the smaller stations up and down the west coast are equally important and matter to many people in different ways. I ask the Minister to undertake to include a residual value clause in the forthcoming franchise agreement; otherwise it will be a huge missed opportunity.
I await with interest the Minister’s comments, and her assurances that the upcoming franchise will lead to improvements in those areas and in the service. We must ensure that the west coast main line continues to play its part, and indeed improve, as one of the most important pieces of infrastructure in our country.
This is probably the second time that I have taken part in a Westminster Hall debate that you have chaired, Mr Brady, although we have known each other for a considerable time.
I will not take too long, but there are one or two issues that concern Coventry and investment there. As part of the consultation, it was suggested that the three trains an hour running through Coventry could be reduced to about two an hour. That could affect people going to work, as lots of people go to work in Coventry and lots of people from Coventry work outside it. It is important to think about that, if we are to line things up with high-speed rail, which will bypass Coventry. My experience is that if anyone is going to invest in the city, one thing they will ask about is the transport system, as well as such things as executive housing, the education system and the skill base. Transport is part of the whole package, and that is why I express concerns about high-speed rail and its impact on Coventry. We have in other places debated the issue of compensation for those affected, but that is part of another debate.
The intention is to reduce journey times between Birmingham, Manchester and Liverpool, and no one would quarrel with that, but we have to look at the impact on other areas, and I wonder how that fits into the Government’s proposals. Next year, they will set up the west midlands combined authority. It has been said that the combined authority will be an engine for economic growth in the region, but what about the impact of high-speed rail? If there is a reduction in the frequency with which trains go through Coventry and areas like it, the west midlands will certainly not gain too much out of that.
It is interesting to note that journeys to and from Coventry have tripled over the past decade, from 2.35 million in 2004-05 to 6,252,888 in 2014-15. That is a considerable increase by any stretch of the imagination. As part of the franchise, we should also look at the fare structure. It could be argued anecdotally, as it were, that it is cheaper to fly than to travel by train in the midlands, and that should be looked at—and it is not just about off-peak prices.
The hon. Gentleman is right to mention Coventry’s position in relation to the new high-speed rail, and how that works with changes to west coast main line usage. HS2 will not be open until 2026; surely it is important to ensure that the west coast main line has the maximum capability, given that it is already at capacity, before the new service opens, so that the region, and Coventry in particular, are not compromised.
I totally agree with the right hon. Lady. I know that she, along with her colleagues, takes a considerable interest in the welfare and prosperity of the west midlands. Earlier she raised a point about Birmingham airport; we should take a good look at the impact that high-speed rail could have on Birmingham airport and passengers. This is not necessarily a criticism, but the organisation of that airport needs to be looked at, from the point of view of passenger comfort. Passengers flying into or out of the airport have a considerable distance to go when they get off or go to the aircraft. It is quite a long walk, to say the least. The airport should look at how it organises things on behalf of passengers, whether they are going through customs or just coming back from a journey. While we all support the airport, we have to make it more passenger-friendly.
I link that with what I have been saying about the situation in the west midlands. The airport is part of the prosperity of the west midlands. Coventry airport, if I remember correctly, used to benefit from freight from Birmingham airport. Those are some of my concerns relating to how Coventry sees itself. I do not want to be too parochial, because at the end of the day we have to act in the best interests of the region, but those concerns have to be expressed.
I ask one final question, which I hope the Minister will answer. What has happened with and to the NUCKLE project? I am sure that some MPs with constituencies near mine share that concern. That project is important to the prosperity of not only Coventry but Nuneaton, and it seems to have come to a standstill. The Minister may know more about that than I do. It is vital that the line is looked at, because people have been waiting for it for 10 years. I have been involved in a number of delegations over the past decade to try to get that project off the ground. That is all linked to what I have said about Coventry station and the west midlands.
It is a great pleasure to serve under your chairmanship, Mr Brady. I congratulate my hon. Friend the Member for Carlisle (John Stevenson) not only on securing this important debate, but on his chairmanship of the all-party group. He raises the profile of the line, which he described as being of national importance. It is important to his constituents in providing access to Manchester, the west midlands and our capital city. My constituency is much closer to London than his, but the west coast main line is equally important to Rugby. Like him, I am a regular user of it.
Rugby has excellent communication links, not least road links. We are at the crossroads of the UK motorway system. That fact led to the media identifying “motorway man” in the 2010 general election. He is a sales engineer or a sales manager who needs good access to the motorway network to carry out his business around the country. We have great road networks, and that has benefited our logistics industry. We are at the centre of the golden triangle where logistics companies want to locate themselves.
Our communications by road are good, but our rail links are equally important, because they provide Rugby with access to the north-west and, importantly, London and the south-east. The 50-minute journey time from Rugby station to Euston is vital for our local economy. Those things make Rugby an attractive business location, particularly in relation to sites in London and the south-east. The cost of premises and the cost of employing staff are lower in Rugby, but many businesses need good access to the capital for meetings and for accessing professional bodies. Our 50-minute journey time means that it is often quicker to get to central London from Rugby than it is from many places with a London postcode. We have that resource—it is a great asset to Rugby—and we want to keep it.
Rugby is growing very fast. We are just about to start the development of 6,200 new homes on the former Rugby Radio site. Immediately adjacent we have commercial development on the Daventry international rail freight terminal, which will provide for additional consumers on the railway line. The future of the west coast main line is important to Rugby. It is also important that the Government get the handling of the franchise right, especially in the context of the completion of the London to Birmingham phase of HS2, which should be delivered in 2026.
One or two people have said to me that consultation has already started, but the contract period will not start until April 2018, almost two years away. They say, “Why are the Government consulting so early? Why are we talking about this franchise now?” Given the history of the franchising process on the line, it is important that the process is thoroughly checked. The point has been made to me that the very last thing we need is a repeat of what happened with the previous allocation of the franchise. The Minister will be at pains to provide assurances that that will not happen this time.
The consultation document is looking for the views of passengers, businesses, local authorities and local enterprise partnerships so that priorities for improvement can be identified and to inform what the Department for Transport should include within its tender document. One concern that has already been referred to in the context of Birmingham airport and Coventry is contained in paragraph 3.17 of the consultation document. It refers to peak times where levels of service might not reflect demand and—this is the bit that those of us who have read the document are concerned about—it says:
“there may be opportunities to adjust the level of service at stations which might enable wider benefits to be delivered elsewhere.”
What might that mean? The document goes on:
“For example reducing the number of stops required at intermediate stations”.
That is a matter of concern for my constituents in Rugby and for those in Coventry.
The hon. Gentleman has touched on a vital point that I mentioned earlier. I am sure he will support and agree with me. Coventry, as he knows, is making a bid for the city of culture. It is not only vital that we get the traffic flow at the airport right, but equally important that we get the franchise right in relation to the frequency of trains because, as he knows, we can get a lot of tourism as a result, and Coventry has got a big tourist attraction.
The hon. Gentleman is absolutely right. This is a matter of concern. In fact, the West Midlands Integrated Transported Authority, which represents the seven metropolitan authorities in the west midlands, has voiced concerns in respect of Wolverhampton, Coventry, Sandwell and Dudley. As my right hon. Friend the Member for Meriden (Mrs Spelman) highlighted, the point has been picked up by the operator of Birmingham airport as a possible threat to the region’s aviation connectivity, leading in turn to a threat to the west midlands’ economic development and levels of employment.
The same concerns apply to Rugby. It is of course very easy to reduce journey times between major conurbations and reduce the numbers of people on the trains by having those trains ceasing to stop at intermediate stations. I am a regular rail user and I can see changes that can increase capacity. The first, which has substantially been done, is to increase the length of trains. We have 11-car Pendolino trains, but a substantial number of nine-car Voyager diesel trains remain running. Replacing those and getting them up to 11 cars is important.
Secondly, the conversion from first class to standard class has partly happened. This was spoken about several years ago, but when I go to Euston station to catch a train to Rugby, I regularly walk past four pretty empty first-class carriages to get into one of the five or seven standard-class carriages.
Thirdly, more effective use of pricing can be used so that trains in the middle of the day take some of the load. I regularly come down from Rugby on the 12.23 and I often sit in a carriage that I think holds about 80 passengers with no more than a dozen or so. So additional use of pricing can be made to spread the load.
The hon. Member for Coventry South (Mr Cunningham) said that he would not be too parochial, but I will be, if I may, because Rugby has a very active rail users group. I meet them regularly and I am grateful to them for their observations. They have made clear to me some of the things that they would like to see, and I know they will be attending various consultation events, one of which will take place at Rugby station on 23 June. It is very important for Rugby rail users that there is no diminution of services at Rugby, especially not as regards the excellent fast service to Euston to which I have referred.
For some time there have been concerns about a recent reduction in direct services to the north-west, which historically took the Trent Valley line. Many of those trains no longer stop at Rugby, which means that a Rugby passenger wishing to travel to the north-west has to change at either Coventry or Birmingham International. Given the importance of Rugby as a commercial centre, as I have mentioned, it will be increasingly important for us to have links to the northern powerhouse.
The consultation will refer to stations, and Rugby station is one of those included in the franchise. The substantial recent increase at Rugby is starting to put pressure on the facilities at Rugby station. We had a fantastic station upgrade, which was completed in around 2008. The upgrade of the west coast main line gave our station a transformed appearance and provided a much better gateway to Rugby. Previously, people arriving would have had to walk down a long dingy tunnel. Now we have a new ticket hall, new catering facilities and a multi-storey car park. However, our parking facilities have not kept pace with the growth in the line.
It is often not possible to find a space in the car park on a Tuesday, Wednesday or Thursday. It is less of a problem on a Monday or Friday when there are fewer commuters and people are more likely to be working at home or perhaps taking a day’s holiday. So we need additional parking facilities, although I would add that we might be able to make better use of the existing space if the indicator boards at Rugby station, which have been out of order for quite some time, were repaired. I have raised that with Virgin, and perhaps a note in Hansard might push that along and get it sorted so that people can draw up at one of the three car parks in Rugby and have confidence that there is a space for them.
We need additional car parking spaces, but we could also do with additional investment in the road network around Rugby station. There is a particular issue with congestion around peak times. People have been known to be late for a train as a consequence of the congestion around the station, which is very much caused by the single running on Mill Road, a road running underneath the station that is controlled by traffic lights. That really needs to be upgraded to two-way running. It is a real shame that the opportunity to improve that was missed when the railway line was realigned in the west coast main line upgrade. It certainly needs doing.
Partly as a consequence of the congestion around the station, there has been recent talk of a possible parkway station just outside Rugby on the Northampton loop of the west coast main line, which would be two or three miles away from Rugby. Frankly, I cannot see the point in Rugby having two stations two or three miles apart. I and I think most of my constituents would much rather see investment in the infrastructure around the station, giving better road access and the additional parking to which I have referred.
On the services that Rugby receives, there is a particular issue with Saturday evening services from Euston station. The last train to Rugby from Euston on a Saturday evening is at 21.23. That of course means it is not possible for my constituents to attend a performance at a theatre in London and catch the train home. They have to stay overnight or alternatively, as my wife regularly does, come down for a matinee, but people should be able to catch the last train back in the evening.
Of course, when people do take late train services, the trains are slowed down and take longer. The last train on a Saturday leaving Euston at 21.23 takes 1 hour and 21 minutes. The last two trains on a weekday are at 22.30, which takes 1 hour and 28 minutes, and at 23.30, which takes 1 hour and 35 minutes. The fastest train takes 48 minutes. Why cannot we have trains running at that kind of speed later in the evening to enhance people’s use of the railway?
We have heard quite a bit about HS2. I do not think it is possible to consider the future of the west coast main line without some reference to HS2. It is vital that even when investment starts to be made in HS2 money continues to be spent on the west coast main line. What we do not want is a Cinderella line that gets forgotten about while the all-new sexy high-speed rail is developed.
In terms of general improvements, my hon. Friend the Member for Carlisle has spoken about improvements needed at Euston station. I am very familiar with the Euston sprint. The concourse is small and people race to the train. Earlier notice of the platform allocated to a train would be helpful. I share my hon. Friend’s concerns about reductions in space available at Euston while the construction phase of the high-speed rail is undertaken.
At the other end of the line the construction of the new parkway station at Birmingham International will be one of the earlier phases of HS2 construction so does my hon. Friend agree it is important that the Department for Transport looks at the compromised access at Birmingham International railway station throughout the construction work, which is scheduled to last at least five or six years and will involve major changes to the road infrastructure as well as the railways?
Of course. People understand that development entails some disruption, but it is important that the disruption is not excessive and does not outweigh the advantages of what might be coming later on.
My hon. Friend the Member for Carlisle spoke about the need for better wi-fi and better mobile phone signals, which involves investment on the track. There is also a need for more flexibility between the tickets of the operators on the line. London Midland also operates on the line, and occasionally it is difficult to transfer a ticket between one operator and another. Occasionally, when people have bought a ticket from the existing operator, Virgin, and want to upgrade it, they cannot do so. They have to throw the old ticket away and buy a new one. It would seem to make sense if someone who wanted to change to a peak train could simply pay the difference, rather than having to buy a wholly new ticket.
An efficient west coast main line is vital to the economy in my constituency. We have been well served by the existing operator in recent years, but it is vital to make certain that the new franchise will enable my constituents to continue to enjoy a good service and good facilities on the line.
It is a pleasure to serve under your chairmanship, Mr Brady. I congratulate the hon. Member for Carlisle (John Stevenson) on bringing forward this timely debate.
The hon. Gentleman spoke in his opening remarks about connecting the great cities of the country. In my opinion, it is about connecting the great cities of the countries of the UK, rather than a single country, but maybe that is me being parochial. I agree with everything the hon. Gentleman said about customer service and the importance of incorporating that into the new franchise and getting it right on car parks, luggage storage, toilets and wi-fi. I have to confess that I have been caught up in the “Euston sprint”, so I will try to remember the advice—it is a rather unedifying sight when the wee voice in the back of my head says, “Run! Run, get that table!”
The west coast main line is very important to Scotland, given that it is one of two cross-border lines that serve it. For me, it imperative that the Scottish Government are consulted and allowed to have an input on the new franchise. As to the other cross-border route, if the UK Government want to assist with the extension of the Borders railway to Carlisle, I am sure that the hon. Member for Carlisle would like that.
It was only recently that the importance of the west coast main line was demonstrated, indirectly, with the forced closure of the Lamington viaduct. Not only did that disrupt cross-border services; there was a considerable knock-on effect on local services north of Carlisle. Local commuter services in my constituency were affected because trains were rerouted from Carlisle to Glasgow via Kilmarnock.
To return to my point about the Scottish Government’s involvement, the 2012 franchise shambles confirms my view. The award process was scrapped at the 11th hour without the Scottish Government being notified; that had a knock-on effect on the Scottish Government’s tendering process for the ScotRail franchise. Also, scrapping the FirstGroup award and the direct award to Virgin cost the taxpayer about £50 million. That £50 million is equivalent to the cost of the free wi-fi that the Department for Transport pledged for some train services in 2015. A current issue, which I have raised in Parliament, is “talking buses” and the provision of audiovisual equipment on buses; the cost is estimated at £5 million a year, and we can see what that £50 million could have done, if it had not been wasted in that franchise process.
The direct award that resulted from the scrapping of the franchise limited the Government’s negotiating hand. It is much more difficult to deal with a sole bidder. I recognise that there was scrutiny of the direct award, to try to ensure best value for money. I note that the commitments made as part of that included the conversion of 21 first-class carriages to standard class; £2.5 million to improve the interior of the Pendolino fleet; £20 million to modernise and enhance stations; work with Network Rail to improve journey times from London to Scotland; and work to remodel the Carstairs junction in Scotland. I hope the Minister will update us on the progress of all those things that are part of the current direct award franchise, and see how they could be built on and improved in a future franchise. The shortest journey time to Glasgow at present is still four and half hours; it has certainly not decreased in recent years.
As for train carriage refurbishment, I will just make a wee plug for a company in my constituency. It is a train refurbishment company called Wabtec, and the work it does—the quality of the fit-out—is genuinely fantastic. The carriages look brand spanking new once they are refurbished, and the turnaround time is incredible. I make a wee plea to the Government and any of the train companies that are listening to bear Wabtec in mind.
When it comes to reducing journey times to Scotland, it is imperative that rail upgrades north of Crewe should tie in with the planned upgrades for HS2. At present, the planned high-speed classic compatible trains will actually run slower when they are in the existing train network north of Crewe, because they are designed fundamentally for the high-speed infrastructure. Previously, Ministers have told me that that would be addressed in the next investment phase for Network Rail. Will the Minister confirm that the improvements north of Crewe, which should clearly benefit the hon. Member for Carlisle and his constituents, will be taken on board in the Network Rail investment phase? Without that investment, the current journey time of four and a half hours will be really difficult to get down to the predicted three hours and 40 minutes—the stated post-phase 2 journey time to Glasgow. Otherwise, it seems to be a matter of the timetable that clearly exercises other hon. Members; and I can understand why they are fighting for their constituents, to make sure they do not lose out on services this year.
I want to comment briefly on the recent ScotRail franchise, which has been awarded by the Scottish Government. I suggest that it contains some of their asks for the forthcoming west coast main line franchise. The franchise, which was awarded to Abellio, confirmed that the living wage will be payable to all staff and contractors. There were no compulsory redundancies, and pensions and travel rights were protected. There is free wi-fi in all trains—wi-fi has already been mentioned in the debate—and upgraded rolling stock. Also, Abellio relocated its headquarters to Scotland. I am not saying that that would be an ask, but, again, if the winner of the west coast franchise wants to relocate its headquarters to Scotland, it will be very welcome.
In answer to an oral question I asked in the Chamber, the Secretary of State advised me that the Scottish Government could learn good practice from the UK Government, but I beg to differ, given that the ScotRail Abellio franchise was awarded in October 2014, with the bidding process starting just after the previous west coast main line shambles. At that time, the Labour party called on the Scottish Government to halt the ScotRail franchise process, on the basis that some unspecified powers might come to Scotland after the Smith commission.
Rather than proceeding with a bid that allowed new investment, new ticketing, new jobs and a possible profit share, the Scottish Government were asked to do nothing but extend existing arrangements—which would have prevented that investment. For a franchise to work, there must be some form of security as to duration, and that is why it was important to go ahead with it. Under Labour’s plans, we would have been left in limbo until at least the year 2018, and more likely 2019. Actually, by then we will be half way through the Abellio franchise, which is allowing continuing investment at the moment. Also, now that we have additional powers under the Scotland Act 2016 to allow a public sector bid, it is possible to plan for that process, for when the Abellio franchise comes to an end, which will be in 2022 or 2025.
To go back to the main thrust of the debate, the new west coast main line franchise must have Scotland at its heart, and accordingly it must have reduced journey times to Scotland. That means marrying the new franchise to the strategic rail investment programme. It also means involving the Scottish Government.
We have about 40 minutes for the three Front-Bench winding-up speeches, and perhaps a brief comment from the hon. Gentleman who moved the debate. I trust the Front-Bench spokesmen to co-operate with each other to ensure that that happens.
I always try to co-operate with the Chair and make sure to keep to the point, Mr Brady.
I congratulate the hon. Member for Carlisle (John Stevenson) on securing this important debate. It is always good to start these debates with points of agreement, and he made a number of good points. He said that this was a vital development for the west coast; I absolutely agree. He discussed the need to improve seating, toilets, luggage space and value for money for consumers and users, as well as parking and other facilities that people need to use the train network effectively. He rather skimmed over the franchise bid process—he went past it in his own version of the Euston sprint—but he can rest assured that I will cover that in a little more detail; not too much, but a wee bit. He mentioned what he described as the small things, although actually they are big things, as I think he knows; as he said, they are important to people. Unless we get the big things right—the developments at Euston station, which he referred to, and the franchise—those other things will be much more difficult to tackle.
The hon. Member for Coventry South (Mr Cunningham) rightly discussed the need for a better passenger experience, the effect on Coventry and Birmingham and the need to ensure that the Government are taking into account the connections required. That must happen all along the line from Euston to Glasgow and Edinburgh.
The hon. Member for Rugby (Mark Pawsey) rightly pointed out that the franchise must be handled right, and I will come to that point. He also discussed the need for new trains. As we have seen, the SNP Scottish Government’s franchise deal includes new trains and new stations across Scotland as part of the arrangement. There are lessons to be learned there.
My hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) also mentioned the franchise. He talked about the knock-on effects, which are very important, and he made the great point about the cost to the public being equivalent to the cost of putting in place the wi-fi that is currently missing from passengers’ journey experience. He spoke about the ability to put into practice innovations, such as audio-visual accessibility, that make a huge difference to the travelling public who may need assistance. I underline his call for the Minister to update us on the commitments made during the direct award; I hope that we will hear from her on that. It would be remiss of me not to underline the great work done by Wabtec in his constituency on refurbishing rolling stock.
The west coast line is important to Scotland. Five Scottish stations are affected—Lockerbie, Carstairs, Motherwell, Glasgow and Edinburgh—so it is important that the Scottish Government have a say in the franchise process. I was pleased to see the Minister nodding when that came up earlier—I hope we will get a commitment from her on that. Passengers must have a safe, fast, frequent, reliable and punctual service that connects Scotland to London and the intermediate locations that have been mentioned, with on-board facilities and fares that attract passengers to the rail network and retain them.
Indeed, the UK Government can take lessons from the SNP Scottish Government on how to conduct a franchise process while offering passengers a fair deal on ticket prices and fares. After the shambles of the 2012 franchise bidding process, the UK Government must ensure that the next franchise process has the public’s confidence and that it will be able to deliver value for money for passengers. The cancelled franchise process for the west coast main line brought the whole franchise bidding process into disrepute, leaving the public with no confidence in the Government to conduct major rail franchise bids. In fact, the Public Accounts Committee said in 2013 that
“the Department did not apply basic processes properly.”
Crucially, the Committee also said:
“This is not the first time we have come across this situation.”
The Laidlaw inquiry found that there was a damning failure and that the public were left with a lack of confidence. That cannot be allowed to happen with this franchise.
The west coast main line serves five stations in Scotland, as I have said, and is one of the main routes that links passengers in Scotland with Liverpool, Manchester, Birmingham and London. At the time of the cancelled process, as my hon. Friend the Member for Kilmarnock and Loudoun mentioned earlier, the Scottish Government were going through their own franchise process for ScotRail, which had to be put on hold with absolutely no notice to Ministers in the Scottish Government. Keith Brown, the Scottish Cabinet Secretary, said:
“We had no advance notice of this decision being made. Obviously it does have implications for the line itself…what I would like to do is be involved in that discussion with the UK government to say what is best for rail users in Scotland.”
That is a fair request.
The hon. Gentleman makes a fair request to the UK Government; may I make a fair request to the Scottish Government? Carlisle station is a station for the Scots as much as for the English. If the opportunity arises for investment in the station from the Scottish Government, will he support that?
Absolutely. I hope the Minister will act on the hon. Gentleman’s promotion of Carlisle by committing to look into connecting the new Borders railway with Carlisle. Perhaps that is something we could investigate as well. It would benefit many more people.
As I said, at the time of the franchise process, there was no communication with the Scottish Government. On the basis of the Minister’s comments, I am hopeful that that will change in future years.
As for the passenger experience, people in the 21st century have a right to enjoy a train journey. There ought to be a focus on working with others to deliver improvements to stations and to the passenger experience. The points that the hon. Member for Carlisle made when he spoke about improving the passenger experience are all vital to ensuring that overcrowding is reduced, that ticketing is sorted out properly and that integrated journeys are increasingly facilitated across all the stations in England and across the border into Scotland as well.
The UK Government should ensure that the new franchisee makes fares affordable across the piece. The Scottish Government have already taken action to ensure that fares are affordable across the Scottish rail network, by ensuring that their new franchisee will continue to limit regulated peak fare increases to the level of the retail prices index. Regulated off-peak fares will also be limited to increases of 1% below RPI for the lifetime of a 10-year franchise. The Scottish Government are making the best of the system that the UK Government continue to persist with. The Conservative UK Government introduced railway franchising in the 1990s, and the legislation precludes any public sector organisation from bidding to operate a railway service. No such barrier applies to state-backed organisations from Europe or elsewhere. That is patently unfair, so I hope we can look at how we can adjust that.
The SNP tabled a new clause in the Scotland Bill that would have devolved rail services in Scotland, giving Scottish Ministers full powers and flexibility to decide who would run such services. However, like every other SNP amendment to the Scotland Bill, it was voted down by MPs. The new clause also sought to ensure that the provisions of the Railways Act 1993 allowed direct awards to be made, to the full extent possible under European law, for the operation of rail passenger services such as the ScotRail Caledonian sleeper.
As a result of the franchise deal in Scotland, passengers and staff will enjoy an enhanced range of benefits, with advance fares between Scottish cities starting at £5, a commitment to pay at least the real living wage—the one applied in Scotland—to all staff and subcontractors, at least 100 apprenticeships and a guarantee of no compulsory redundancies.
I was waiting to see whether the hon. Gentleman would address an issue that I am interested in. One day HS2 or a high-speed line will go to Scotland. Do the Scottish Government have a position on whether they would prefer that line to go up the west or the east coast?
At the moment, the Scottish Government’s position is that we must be included in the discussions. The UK Government have brought forward no plans to ensure that we are connected by HS2. It is vital to us that the routes that connect Birmingham and the central belt in Scotland are electrified immediately or as quickly as possible. As for the high-speed line, it is very difficult for me to give the hon. Gentleman a basis for our policy without seeing UK Government Ministers’ plans, because we have to scrutinise them to decide what is best for Scotland.
Rail staff pensions and travel rights are protected under the Scottish franchise. Crucially—this has come up a number of times—to make sure that we are connected and do business properly, there will be free wi-fi on all trains. That is often missing on journeys down here. There will be a new approach to cycling, with more than 3,500 parking spaces and bike hire at a number of stations. Eighty new trains are due to arrive at the start of December 2017, and there will be 23% more carriages across the network.
As I said earlier, the west coast main line affects Scotland. I mentioned the five stations. Passengers must have fast, frequent, reliable and punctual services connecting Scotland to London. The UK Government must commit to ensuring that the Scottish Government are much more involved in the future franchise.
It is a pleasure to serve under your chairmanship, Mr Brady. I thank the hon. Member for Carlisle (John Stevenson) for securing this crucially important debate. It is a pleasure to follow the hon. Member for Ross, Skye and Lochaber—
May I also briefly pay tribute to Mr Neil Caulfield, who tragically passed away last week? He was a wonderful Clerk to the HS2 Committee. He was wonderfully helpful and professional, and we will miss him. I pay tribute to him and to all the Clerks who support us through this work.
The west coast main line is the backbone of Britain’s railways. It services great cities and towns in England, Wales and Scotland. The issues raised today are vital to so many passengers, as more than 34 million journeys a year are made on the service and almost 7 billion passenger miles are travelled. As the hon. Member for Carlisle said, the west coast franchise, which is currently operated by Virgin, ends in April 2018, and the Department is running a competition to find an operator for the next franchise. Before looking to what the Government should seek from the operator of the next franchise, I would like to secure assurances from the Minister that there will be no repeat of the franchising fiasco of 2011-12. The Department conducted a competition and announced that FirstGroup had been awarded the franchise before having to cancel the competition and subsequently award it to Virgin at a not insignificant cost to the taxpayer. That caused a great deal of confusion. The railway industry needs to be able to have confidence in the mechanisms of contracting. We simply cannot have a recurrence of that debacle.
The hon. Gentleman mentioned Euston station, which is considered to have particular problems. We have heard that it is often overcrowded and difficult to navigate. It is awkward to buy tickets, and there is a short time between announcement and departure. People speak of the unseemly scrum once the information appears on the screens. In its February 2016 report, “InterCity West Coast rail: what passengers want”, Transport Focus recite passengers describing the experience as “stressful and unpleasant”. The national rail passenger survey of west coast passengers in part reflects that, with a rating of 11 percentage points below average.
The good news for passengers at Euston is that it will be redesigned to become a modern, easy-to-navigate, integrated station. The bad news is that things will probably get worse before they get better. I am pleased that the Government have given assurances to Camden Council about the £2.25 billion redevelopment of Euston proposed by Labour, consequent on the passage of the High Speed Rail (London – West Midlands) Bill. When the station is completed, passengers will experience less crowding and improved connectivity among rail, bus and taxi services. Routes for walking and cycling through the local area will be created. That will go some way to addressing passengers’ concerns, but it is often the case with major station improvements—we see this at the moment at London Bridge—that passengers are significantly disrupted and inconvenienced during the period in which the work is taking place. I would like some assurances from the Minister about those matters.
Sir Jeremy Heywood, the Cabinet Secretary, is currently analysing HS2 to trim costs and gauge whether the £55 billion project can keep within budget. There have been rumours that the Government might entertain plans to alter the route of HS2 or their plans for an integrated Euston station, and instead have the high-speed trains run only to Old Oak Common. That would put a great deal of stress on Crossrail, which was not planned to include that extra capacity. I must admit that I find it strange that, after Report and Third Reading, and given the exhaustive and exhausting legislative process for HS2 to date, the Government are again having to re-assess it. Although close attention to and scrutiny of cost is absolutely vital, I am concerned that what appears to be a comprehensive review of key issues within HS2 runs the risk of undermining confidence in the Government’s capacity to progress the project as planned and agreed. Will the Minister clarify what Sir Jeremy is considering? If the plans for an integrated Euston station are still on track, what will be done to mitigate the impact on west coast services, given that the number of platforms available at Euston to the west coast service will reduce from 18 to 11? Once it is up and running, HS2 will provide extra capacity, relieve congestion on the line and improve passenger experiences. Those are some of the many benefits of HS2.
The hon. Member for Carlisle spoke about fares and ticketing, which are a common source of frustration for passengers, who too often feel they get poor value for money from train operating companies. One of the consequences of privatisation is that we were left with the most expensive and confusing ticketing structure in Europe. Many passengers struggle to understand fare structures and pricing; the difference in cost between tickets strikes people as illogical. The discrepancy between fares, especially if someone needs to travel at short notice—as might be the case for a family funeral—often leaves passengers feeling that the train operating companies have ripped them off.
Compared with the national average, west coast performs relatively well on value for money—however, that is against an exceedingly low baseline of just 48%. Frustrations over fare structure and pricing are common passenger complaints. There is more that the next franchise holder can do in that regard, including simplifying fare structures, making the purchasing experience less complex and more transparent, lessening the cost discrepancies between similar journeys, and allowing passengers to find the best tickets available for their journey.
My hon. Friend makes an excellent point. There is always a balance between fares and subsidy, and Governments of every colour have to struggle with that. On that very point, there are certainly improvements to be made, but I fear that as long as the Government persist with an exclusively privatised rail network, the feeling that passengers are receiving poor value for money will persist, and understandably so. Virgin runs one of the better services in the country on the west coast, but it is a poor comparison with our recent experience of when the public sector was presented with the opportunity of running passenger services. We need only to compare Virgin’s receipt of £2.5 billion in direct subsidy, and the £500 million it paid out in dividends between 1997 and 2012, with the performance of Directly Operated Railways between 2009 and 2014, which ran on a much lower subsidy. Under public operation, the east coast returned the highest level of premium to the Government—over £1 billion—while achieving passenger satisfaction ratings that surpassed all other long-distance operators. The public are absolutely right when they say they believe that rail should be in the public sector—they have good reason to do so.
Commuters and passengers desire free and decent wi-fi on trains; it is an important matter for them. We often get free wi-fi when we buy cup of coffee, but people who spend a fortune on a train ticket may have to rely on an unreliable wi-fi service. A good service is clearly beneficial for those people—both for leisure purposes and for conducting business as they travel. One hopes that attention will be paid to that.
The hon. Member for Carlisle spoke about the potential for a residual value mechanism, which would reward train companies for investing in things such as stations, where the return on their investment would go beyond the period of the franchise. I think the hon. Gentleman hoped that that would be a way to ensure better long-term thinking and investment, which is a reasonable point, but I caution against over-eagerness for the idea, because improving stations should not depend only on train companies deciding that there is an overwhelming case for them to make significant profits. Train operators do not have a great record of investing their own capital in stations, and increasing residual value mechanisms might make it harder for a national public operator or local authorities to improve facilities later.
The franchising system has failed to deliver clean, safe, accessible and properly staffed stations in too many areas, and tweaking the arrangements is not the best or most cost-effective way of making services better for passengers. I trust that the Minister will deal with the issues and concerns mentioned and, with that, I bring my remarks to a close.
I congratulate my hon. Friend the Member for Carlisle (John Stevenson) on securing the debate and on presenting a factual and detailed set of arguments. I also commend him on the work he has done in chairing the west coast main line all-party group, ably supported by West Coast Rail 250.
As my hon. Friend knows, because he welcomed me there, I have visited Carlisle station several times. It is more cathedral than railway station, and one of the most astonishing architectural gems I have seen on the network —I speak without hyperbole. His plans to improve the car parking, access and links are incredibly good. The station even has a putting green, which is an amazing thing to see, as well as many other good services, so it is a wonderful place. I take on board the point about Borders railway, and am interested in looking into it.
I am grateful to all right hon. and hon. Members for their contributions. We heard the hon. Member for Coventry South (Mr Cunningham) talk about the importance of midlands services and local connectivity; he is a great advocate of the NUCKLE scheme, as I am. I was pleased to put the spade in the ground for and open the Bermuda Park station—a critical part of the scheme. We await further details from Network Rail.
My hon. Friend the Member for Rugby (Mark Pawsey) talked about the vital connectivity of his city and what that does for the local economy. I will add my voice to his in writing to the company about the announcement boards; people have a right to know when their trains are going, and from which platform.
The hon. Member for Kilmarnock and Loudoun (Alan Brown) will be pleased to know that Stagecoach, one of the companies operating the franchise, is a proud Scottish company, headquartered in Perth. His points about the cross-border relevance of the franchise were absolutely spot-on. In fact, my most recent visit to Carlisle was to look at first hand at the Lamington viaduct, where, during the storms, there was a serious wash-out that flooded large parts of the constituency of my hon. Friend the Member for Carlisle. That was a serious engineering challenge, but Network Rail rose magnificently to the occasion and restored the link. It got the lines operating again, restoring not only the inter-city and cross-border services, but the vital commuter services between Carlisle, Lockerbie and other parts of the region.
I reassure the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who speaks for the Scottish National party on transport matters, and everyone else present that the Department has absolutely learned lessons on the franchising process. Clearly, there was a problem, and there were serious questions to be answered. We strongly believe—as did the previous Labour Government for 13 years—that franchising is the way to deliver improvements on the railways. I have had the pleasure of letting the east coast franchise, the Northern and TransPennine Express franchises and, most recently, the Greater Anglia franchise, which is about to be announced. In those franchises, hon. Members can see the absolute, laser-like focus on passengers and quality of service. Furthermore, in the case of the east coast franchise, the service is returning more money to taxpayers than ever happened under Directly Operated Railways.
I am agnostic on such things, but I can see no benefit in that. I do not know who in my Department the hon. Gentleman thinks would do a better job of running the west coast railway than those who do so now. I remind him that before privatisation, 14 trains a day ran between London and Manchester; 47 brand-new trains now run, with fantastic on-board services, of which we have all availed ourselves. I cannot see why he is so obsessed with the idea of civil servants running companies. The west coast case is a good example of how the private sector has invested.
Before I move on to the bulk of my speech, I want to associate myself with the comments of the Opposition spokesperson, the hon. Member for Middlesbrough (Andy McDonald), on the tragic loss of the Clerk to the HS2 Committee. It was an absolute tragedy, and we would all want to pass on our condolences to his family, and to put on record what a wonderful job he and that Committee did in very difficult circumstances.
As my hon. Friend the Member for Carlisle said, the west coast franchise has been a real success story; for example, we have seen a big increase in passenger numbers, a big improvement in passenger satisfaction, and capacity increase by more than 2,000 seats a day. The franchise is also leading the way with automatic delay repay, so people who buy a ticket on the west coast trains website and find that their train has been delayed do not have to do anything; they automatically get a refund if the train is delayed by more than 30 minutes. That is an excellent piece of passenger-facing innovation. The franchise has also put free wi-fi into 17 stations—I will talk about wi-fi on trains in a moment—and several other obligations have been delivered, or are in the process of being delivered. To reassure Members who asked about this, the company is replacing self-service machines, improving concourse and ticket-retailing facilities, upgrading waiting rooms and loos in many stations, and putting in about 350 new cycle racks. About £20 million is being spent along the route.
The Minister mentioned the automatic repayment system for delays, which is a good thing at one level, but the risk is that it might cause defensive timetabling. Companies have no incentive to take that extra few minutes off the journey time. Will she give us some assurance that that is not happening?
Yes, I absolutely will. When any service that is this busy tries to stretch out timetables to avoid paying compensation, it simply creates more disruption, given how complicated the routes are. The company has no incentive to monkey with the timetable in order to avoid its compensation payment obligations. Furthermore, the company, in common with all train operating companies, receives money from Network Rail in the case of a Network Rail cause of failure, so again, properly, that money should be paid out to customers.
The improvement in the conversion of rolling stock has been mentioned. The company has been taking out first-class seating to include more standard-class seats, which is important. Those services can be very crowded, particularly in the shoulders—the times around the peaks.
I thank the Minister for giving way again. Will she give an assurance that, if it were possible for whichever company wins the franchise to take five minutes off the journey time to Warrington, for example, there would be no defensive timetabling, penalties, or other disincentives to stop that? That is important to making progress.
My hon. Friend’s point about avoiding defensive timetabling is absolutely right. I will come on to talk about how everyone can make their important proposals for the new franchise. We want the franchise due to start in 2018 to put the customers on the route absolutely at the heart of the service, continuing some of the innovation and progress that has been delivered. We know that we need more capacity on the route, better value for money, improved punctuality—it is improving, but it is not good enough—and better management of disruption. By the way, those are things we want, and are contracting for, right across the country.
Occasionally—I do not want to exaggerate—a hold-up between Birmingham and Euston seems to stop the whole line. I do not understand that, and we should have a better method of dealing with hold-ups. If there is an accident on the line involving an individual, there should be another way to proceed without necessarily creating hold-ups. Also, while I am on my feet, I congratulate the hon. Member for Carlisle (John Stevenson) on securing the debate—it was remiss of me not to do that earlier.
The hon. Gentleman illustrates a point that has been made well. Part of the reason why we need HS2 so badly is that capacity is so tight on the route. If there is a hold-up, there are few places that can take the additional services. On any tight route, whether on the west coast or in other parts of the country, disruption spreads quickly—the disruption simply cannot be absorbed, because the timetabling is so tight.
The public consultation has been launched. It sets out the Government’s vision for this franchise, how they can continue to support investment in vital cities right across the UK and build on current levels of customer satisfaction, and how the operator can do more to provide better information and train services.
A very legitimate question that is asked in the consultation is causing alarm and has been raised several times. It is right to ask people, communities and local authorities what sorts of trade-offs they want. Do they want faster journey times? Do they want more connectivity? We in Horseferry Road could sit and design timetables that look perfect on paper, but unless they deliver what is required on the ground—a train service that works for those who use it and maximises the economic potential of transport, which are things that have to be pulled through locally—we will not be doing a service to the communities that we serve. Questions such as, “What would a reduced service to Coventry look like?” are genuinely questions; there is no vision or master plan. We want as many people as possible to help answer these questions, and those trade-offs are vital.
The consultation has started and is on gov.uk. We regard the Scottish and indeed Welsh Governments as vital partners in that; the service of course links very much to the north Wales service as well.
I am grateful to the Minister for being generous and allowing me to come back in. I take at face value her commitment to working with the Scottish Government. Will she look at the improvements made to smart ticketing through CalMac, the popular public sector winning bidder for the ferry franchise?
I am always happy to look at things that happen on ferries, because I represent one of the most landlocked constituencies in Britain, so it is always novel to do so. I will come on to smart ticketing, which the hon. Gentleman knows is a particular passion of mine.
I thank the Minister for giving way, especially as she was moving on to another point. I asked earlier about the commitment on journey times in the existing franchise, which was supposed to look at improving journey times in Scotland. That is clearly a massive issue, and I remind her to give us an update on that.
[Nadine Dorries in the Chair]
It is a pleasure to serve under your chairmanship, Ms Dorries.
Absolutely, and looking at how existing commitments to journey time improvements can be met is part of the current programme.
I wanted to say to my hon. Friend the Member for Carlisle that during the public consultation, we will go out and talk to as many people as possible. We will hold a meeting at Carlisle station tomorrow from 3.30 pm until 5 o’clock. Perhaps he will encourage his constituents to come along and see some of the proposals and have a conversation with officials.
I will deal briefly with fares and on-board service. Although this franchise has some of the most reasonable fares in the country, particularly for tickets bought in advance, it also has some expensive walk-up fares. The most important thing is that we have capped fares at inflation for the duration of this Parliament, at a cost to the public purse of £750 million, which will save the average season ticket holder around £425 over the Parliament. That is absolutely right. However, we will ask the next franchise holder how fare structures could help to ease the shoulders around the peak, when trains can be very crowded. The world is changing; people are not working nine to five, five days a week the whole time. I have been keen for bidders to be asked to propose options that allow people who work part time—perhaps two or three days a week—to buy more cost-effective tickets or multi-buy discount tickets. We have specifically asked for that in franchise competitions, and we plan to do so in this one as well.
Wi-fi has come up several times. I was delighted to be the Minister to announce that all trains, with the exception of those that are being phased out, will have free on-board wi-fi by the end of 2018, and this franchise will be no exception. It already has a good wi-fi service in certain classes, but it is not free on all services, and it absolutely should be. I take on board the comments that my hon. Friend the Member for Carlisle made about improved luggage and seating arrangements, which is another thing to feed in.
That is an important question. We can have as-good-as-we-can-get connections right now, but there are troughs and blind spots, and we are working with industry, on a TOC-by-TOC basis, to improve those connections, so there are no not spots along train routes.
HS2 will clearly have a major impact on this line. It will add much-needed capacity and will have a very positive impact for customers who are looking to travel quickly between cities. It is of course a vital programme. We will look to appoint franchisees, both in this competition and in the west midlands, that can work with the HS2 operators in the run-up to HS2 opening, and we want the competitions to procure franchisees that can work with HS2 and Network Rail during the construction works. I have to say that the lessons learned from London Bridge are scarred on my ministerial portfolio.
They are well concealed. No one correctly estimated quite how tough it is to do major improvement works on a very crowded and highly operational railway. Lessons have absolutely been learned, and will be applied in the works at Waterloo this summer on the south west franchise, where we are bound and determined not to make mistakes. The prize will of course be a wonderful new station, I hope with a beautiful arch somehow reinstated, and many more services. That will be a prize worth having, but we are absolutely bound and determined to avoid the disruption that we saw at London Bridge.
I slightly disagree with the view of the hon. Member for Middlesbrough that residual value mechanisms are not really relevant, because if a public company or public authority wants to invest in something, it wants to ensure that it will get a return from it on behalf of taxpayers. That is only right and proper. My hon. Friend the Member for Carlisle is right that that has been a barrier to investment in franchising. We have developed a residual value mechanism in the Department, and it has been used in the latest competitions. I accept that it is not quite what he is looking for, and I am always happy to meet him and have that discussion, but we want to use that mechanism in the upcoming west coast franchise because we want to ensure that the stations along the route and other assets, such as smart ticketing, are supported.
I want to mention smart ticketing before I conclude. It is a passion of mine to get rid of the tangerine tickets, which look like something out of the 1970s, and move to something that far better suits what customers are using today: mobile technology. People will have seen that we have put those requirements into franchising, and we will do so in this case. The adoption of smart ticketing is moving very quickly in this country.
If the hon. Gentleman will forgive me, as that is not in my portfolio, I did not feel that it was appropriate to comment on that, but I will happily have my colleague write to him.
This is another opportunity for a big step change in the services that are provided for customers by whoever the new incumbent is. We believe in the railway as a way to drive investment across the country, but fundamentally it has to work for the customers using it. It is not a train set; it is a way of getting people to and from their workplaces and families. I assure hon. Members who have taken the time to be here today that that will be front and centre of the next franchise competition.
Thank you, Ms Dorries, for the opportunity to say a few additional things. I appreciate the contributions of all hon. Members on what is an important issue for many people up and down the west coast. The issue affects businesses, individuals, tourists, our major conurbations and of course the smaller cities and towns right up the west coast of our country. The next franchise is a real opportunity for the industry, users and the taxpayer. The Minister kindly touched upon the key issues that will be incorporated into the franchise. My all-party group will certainly take a big interest in the franchise, and we look forward to her coming to a meeting of the APPG at some point to discuss aspects of it. We will certainly take up residual value with her, which is an ongoing issue for us. Passenger issues and what happens at Euston are also critical, but I like to think that the future of the west coast rail line is positive.
Question put and agreed to.
That this House has considered the West Coast rail franchise.
Library Services: Thornton-Cleveleys
[Ms Nadine Dorries in the Chair]
I beg to move,
That this House has considered library services in Thornton-Cleveleys.
It is a great pleasure to serve under your chairmanship, Ms Dorries—a first for me, I think, but a pleasure none the less. Thinking about the issue of libraries in my constituency, it is hard to start without resorting to clichés, but of course clichés always serve a wider truth, so when I say that libraries change people’s lives, it is because they certainly do. I remember my involvement with my local library in Weaverham in Cheshire. It opened a whole new world to me. It may have been a small, prefabricated building in a small village in the middle of Cheshire, but it was my gateway to a wider world. I looked up to the librarians who staffed it. They were not just there to shelve books or move them around; they were trained professionals, and when considering all the different options we have for how libraries are provided, we should not overlook that fact. They are trained and they are talented. It is not just a matter of moving books around.
Libraries are not just book repositories, either. They are there for far more than that. As a friend of Thornton and Cleveleys library wrote to me just the other day:
“The nurseries in both areas utilise the provision, parents and their children, the young people that use the library for their Wargaming group, children’s trailblazers group, poetry meets, flower arranging, craft and chat, Shakespeare and literature workshops, scrabble groups, IT club with support from a tech coach, knit and natter”.
The list is endless; it goes on and on, and that is in just two small libraries in Thornton and Cleveleys. In the Minister’s excellent White Paper on the arts—the first proper one since the 1960s—he rightly emphasised that culture should be accessible to everybody. It should not be a matter of how much someone can afford or how close they happen to live to the capital; culture should be available for everybody, including those who live in coastal areas such as mine. So the Minister can imagine my intense frustration and the local anger that has been generated by Lancashire County Council’s proposals to slash the number of libraries across the county to just 37, with a further seven self-service locations. That is down from 73.
In particular, two of those libraries are close to my heart because they are in my patch: the library in Cleveleys, which has a very popular children’s centre as part of the building, and the library in Thornton, which lies just a few yards outside my constituency boundary. My constituency covers part of the car park but not the library itself, and although my hon. Friend the Member for Wyre and Preston North (Mr Wallace) is a Minister and so cannot participate in this debate, I know that he none the less joins me in expressing the sentiments I choose to express today.
Of course, it is not just local MPs who are frustrated by this; it is all of our constituents, too. Let me quote from Nicky Frankland, who wrote on my Facebook page earlier this week:
“I home educate my daughter of 5 who has Asperger syndrome, the library is a vital part of our lives or should I say her life. It gives us the references we need along with the means to have a friendly and calm place to go which we struggle finding elsewhere. Having said that I have used Thornton library with all my children since they were a few weeks old. It amazes me the extent of activities available and how important it is to have a library in the community for all ages. I can’t understand why a decision would be made to get rid of such an important service.”
That is very true. I was out in the torrential pouring rain last Sunday at Thornton-Cleveleys gala, yet there were still dozens of people wandering around trying to get signatures for the petition to keep those libraries open, such is the local passion for retaining those vital services.
The council’s rationale is essentially to save money—a point I will touch on later—and that people will still be able to travel to Fleetwood or Poulton to utilise the library services retained there. There is a hidden irony in that, because the recent wholesale withdrawal of subsidised bus services means that getting to Fleetwood or Poulton is now almost an impossibility for many of my most elderly constituents because there are fewer buses. Many have expressed their frustration to me that they fear they will become prisoners in their own homes.
It is not just older residents, either. I have received a letter from Emily Rogers, Calise Goffin, Tegan Hood and Oliver Preston from Northfold primary school’s school council telling me that:
“It has come to our attention that many of our local libraries, including Cleveleys, are under threat of being shut down. We have close links with this library as many of our pupils take part in the Lancashire Reading Trail. We enjoy it when the librarian, Brenda, comes into school to talk to us and give out prizes. Many of us enjoy taking part in events and activities at the library during our school holidays, and we would greatly miss this if it was no longer there”.
More than 300 of the school’s friends, pupils and their parents have signed a petition desperately asking for the library to be kept open.
Clearly, there is a political angle to this debate. I have no doubt that on social media right now someone will be tweeting that it is all my fault, because the nasty Conservative Government are cutting budgets somewhere. That will be appearing on Facebook in response to this debate as well. It is such a serious accusation that it is worth taking head on. I do not deny that all councils up and down the country face challenges over their budgets. They will choose to meet that challenge in differing ways. Some will do a better job than others at making those spending reductions, but one thing I am quite clear about is that every single council, whichever party happens to be controlling it, needs to be held to account for how it chooses to make spending reductions.
I do not want to make today’s debate about which party happens to be controlling a particular council. It is about how they choose to make those decisions, the factors they weigh in that balance and the extent to which they put the needs of the people they represent at the forefront of their minds. Councils need to take responsibility for their decisions, and of late we have seen some spectacularly bad decisions by Lancashire County Council, including mismanaged contracts that have wasted millions of pounds. The Conservative group on the county council discovered an unknown £15 million the county council never knew it had. That would have been enough, with £1 million to spare, to allow all the libraries across the county to be saved, but the council chose not to use it to that end. It wasted £7 million by not going ahead with a new fleet management service, for example.
The list could be endless, and it would be otiose to continue to read examples out, but it makes the point that Lancashire has not been well managed financially for a number of years under the people who currently run the council. It is the people of Lancashire who are paying the price for those mistakes and that poor governance. Because the council has not done a good job, we all have a price to pay, including my constituents. I recognise that that political debate does not save a single library or change a single mindset in county hall, because there are political blinkers on and this has become a political debate. What frustrates me is the unwillingness of the county council to sit down with borough councils in the county to discuss differing ways to deliver library services. In Wyre borough, which covers both Thornton and Cleveleys, they are trying to come up with innovative solutions that would enable the county to save the money that it knows it needs to save, as well as retaining all of Wyre’s libraries.
It frustrates me that the county council will not sit down and discuss those ideas, not least because they are ideas that have been implemented by other councils around the country that are run by the same party that controls the county council. It is clearly not a party political issue at all, because other Labour councils have been equally innovative, and I would like to see Lancashire be as innovative. Wyre would like to see all the councils in Wyre essentially become community interest companies. That would release savings that could be used to maintain all seven libraries, rather than having to shut three of them. Of course there will always be devil in the detail, but surely all sides can at the very least sit down and hold that discussion while the consultation process is under way.
In York, which is one of the main models that Wyre is drawing on and is a Labour-controlled council, they have an industrial and provident society called Explore, which is one-third owned by the staff and two-thirds by local people. Local people pay a notional £1 toward their membership—which is actually not even collected by Explore—that allows them and the staff to have a say in the delivery of library services. That is just one of the many examples up and down the country of councils that have tried to take a more creative approach to delivering library services that has not been dependent upon wholesale closure.
I know that Arts Council England has a library development fund. I would be grateful if the Minister outlined what support it might be able to give to the county council, Wyre borough and the community taskforce—the Friends of Thornton and Cleveleys Libraries—who are looking at alternative models of provision. In the same way, what help can the Government’s libraries taskforce give to those seeking to develop and change the model of provision in the county?
More fundamentally, will the Minister reflect on the use to which we can put the Public Libraries and Museums Act 1964? My fear is that what Lancashire is planning to do places it in breach of the provisions of that Act. I know that under the last Labour Government, the right hon. Member for Leigh (Andy Burnham), who was Secretary of State for Culture, Media and Sport at the time, chose to refer Wirral Council for a public inquiry because he believed that it was in breach of the Act. It had failed to carry out a proper assessment of need and had relied too much on a property-based assessment. I fear that Lancashire is treading an identical path, not least in its attempts to focus provision on the most deprived areas. I do not dispute for a second that deprived areas require a greater proportion of public resources, but under the 1964 Act library services are meant to be a universal service. Access to them should not be dependent upon levels of deprivation. If that is the scheme that the county council is seeking to adopt to assess who deserves to have a library service in Lancashire, I fear that it may be in breach of the 1964 Act.
I attended the public inquiry in Wirral back in 2009. It was a very interesting two-day experience and the lady who conducted it, Sue Charteris, did an excellent job of distilling, down to the bare essentials, what the Act required councils to do, how to justify what was a comprehensive service and what that meant in practical terms for the residents of Wirral. If Lancashire presses ahead with its current halving of the number of libraries, I urge the Minister to seriously consider whether to refer Lancashire for a public inquiry to assess whether it is doing the right thing by the 1964 Act.
I do not argue that savings should not be made, nor do I think that the Government should step in and somehow make up the difference to ensure that Lancashire can keep its libraries open, but I wonder why libraries always seem to be such a soft target for councils of all persuasions that are making rapid spending reductions. I would argue that Lancashire in particular has failed in its duties to provide a comprehensive and fair library service for all our residents. The Minister has a chance to influence Lancashire’s decision making during the consultation period. I urge him to make it clear that what it is currently proposing is wholly unacceptable and that it is in on the wrong path—that it risks sharing the fate of Wirral, which was forced to go back to the drawing board.
In summary, I hope the Minister has clearly heard the views of my constituents as I have expressed them today. Those views will be replicated not just in my part of Lancashire, but across the county as a whole. I hope he can respond to my specific queries and emphasise to Lancashire that it is on the wrong track and ask them to think again please.
I am grateful for this opportunity to respond to my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), and to appear in front of you, Ms Dorries, the Chair of this important debate. You are an extremely distinguished and best-selling author, and I gather that “The Angels of Lovely Lane”, the latest novel in the award-winning series that you have produced, is about to be—or has just been—published. It is certainly available to pre-order on Amazon. I just wanted to get that on the record because, obviously, libraries are about books—but, as my hon. Friend pointed out in his very eloquent speech, libraries are about a lot more as well. I congratulate him on securing this debate and on putting the case for libraries so strongly. Although he is obviously here to defend the libraries in his constituency and local area, a lot of what he said stands for libraries all over England as well.
I am the libraries Minister responsible for England—it is important to note that libraries are a devolved matter as far as Scotland, Wales and Northern Ireland are concerned. I am lucky enough to have been the libraries Minister for some six years, and indeed to have been the shadow spokesman for the four years before that, so I am pretty familiar with most of the issues and I remember the Wirral inquiry well. Indeed, it was me who called on the then Secretary of State to call that inquiry. I asked him to call it because at the time—I agree with my hon. Friend—there had been no proper investigation of the library service. Wirral Council had effectively taken a survey of its buildings and decided which it should close, but it had not actually taken a survey of its library service and how that could be most effectively delivered.
Of course it is perfectly appropriate for councils to look hard at their library services. It is perfectly appropriate for them, in difficult economic circumstances, to look hard at all the services that they deliver to see whether they could be delivered more efficiently. In fact, across the country there are many examples of library services that are being innovative. For example in Suffolk, where library services have become an industrial and provident society, libraries are remaining open, they are more innovative, their opening hours are longer and they are more popular. The head of the library service in Devon, Ciara Eastell, who has recently retired as the head of the Society of Chief Librarians and has done a fantastic job in that post, recently presided over the move by Devon libraries into a mutual organisation.
Libraries have a bright future and I will always take the opportunity to talk about the success of the library service. Too often, as my hon. Friend pointed out, libraries seem to be at the back of the queue for many local authorities. Also, paradoxically, many of the people who claim to have libraries at their hearts and to see them as important spend their entire time doing down the library service and claiming that it is on the point of collapse and in crisis. Indeed, when I asked the then Secretary of State to call his inquiry into the Wirral library service, I made the point—as I have ever since—that at no point as the Opposition spokesman did I ever accuse the library service as a whole of being in crisis. I was quite happy to call out particularly egregious examples of local authority behaviour but I did not believe then, and I do not believe now, that the library service is in crisis. It is having to modernise.
We take library closures as an indication of the health of the library service and I bat figures between myself, library campaigners and, I am afraid, the BBC, which has not been as accurate as it could have been about the number of library closures. It is always difficult to have an accurate figure. That might sound surprising; most people would look at a library and say that they know what a library looks like, but people can have different interpretations of the definition of a library. As far as we are aware in the Department, just over 100 libraries have closed their doors and some 200 libraries are open but managed by the local community and volunteers. There are still 3,000 libraries in England that can count as part of the statutory service. Some £700 million is spent a year for libraries to provide the great service that they do to my constituents, my hon. Friend’s constituents and others.
My hon. Friend was quite right to point out his concerns about what is happening in Lancashire. As he also pointed out by mentioning the £15 million that Lancashire had discovered, councils are not all-seeing and all-dancing, and it is possible for them to make different decisions. However, it is also important to remind ourselves that libraries are funded by councils and run by councils. Central Government have never run the library service and have never funded the library service, but they do have the backstop of the statutory duty.
I want to look briefly at what is happening in Lancashire. I am afraid it has seen a decline in the number of visits. I gather that visits have fallen by a fifth, and the number of active book borrowers by around a quarter. I also understand that the two libraries in my hon. Friend’s constituency have experienced a significant decline over the same period—in visits by about a third, and in active borrowers by just over a quarter.
The council has undertaken two consultations this year on the future of the library service. The first was undertaken in January. The council consulted on possible budget savings for the next five years, and one of the options included a rather dramatic proposal to reduce the number of libraries from 74 to 34. The 40 that were due to come out of the council service would either be closed or run by local communities. Just as an indication of how popular and important to the local community libraries are, I point out that that consultation drew more than 10,000 responses. The council then considered the responses and is now undertaking a further 12-week consultation. That consultation is under way and, as I understand it, is due to end in mid-August. The proposals have changed slightly. Instead of only 34 libraries, the council now proposes 44 libraries: 37 fully staffed and resourced and an additional seven that would not be staffed but would have all the facilities of a council library, including self-service counters and the opportunity to reserve and return books. There would also be six mobile library vehicles, a home library service and the virtual library service.
The council is aware that there is interest from the community in taking on the responsibility for buildings or taking over the running of the parts of the service that the county council will not maintain, and it has invited expressions of interest. I understand that no final decision will be made on any of the proposals until the council’s cabinet has had the opportunity fully to consider and evaluate all the information gathered.
I certainly agree with that. If the county council were not engaging properly with borough councils, I would find that extremely surprising and it would cause me significant concern. It is very important that county councils get out of their silos and talk to the local borough councils. Indeed, one of my hobby-horses is that councils should talk to their neighbouring councils, so the county council should talk to other councils outside Lancashire as well. There is a way councils can keep libraries open while reducing the back-office costs, the administrative costs, of libraries, and that is by sharing services. In fact, in west London, Westminster, Kensington and Chelsea and Hammersmith and Fulham in effect merged the administration of their library service. That not only saved them £1 million a year in administration costs, but enabled them to open a library. The Conservative authority Windsor is also opening libraries because it runs its service so efficiently. It is possible to open libraries even in a difficult economic climate.
I am sure that my hon. Friend understands that it is difficult for me to intervene while the consultation is still going on. There is some debate about my capacity or rather my willingness to intervene. In fact, this is the first Administration that has routinely looked at every single proposal from every council to close libraries. My officials investigate every proposal before them and test it against the 1964 Act, which my hon. Friend mentioned, and the duty to provide a comprehensive and efficient library service before deciding whether to intervene. Again, it may sound paradoxical, but sometimes councils may decide to close a library in order to run a more efficient service.
The first case that I had as the libraries Minister was Brent. On a political level, that was an open goal: it was a Labour council proposing to close six of its 12 libraries. However, when that was looked at in some detail by my officials, it was clear that the council should have been thinking about the future of its libraries some five or 10 years ago, but obviously the political hot potato that is a library prevented that council from making decisions that actually might have ended up meaning that it ran a better, more efficient library service, able to provide better services to more people, with more opening hours. Those are the kinds of decision that we have to weigh up, and we have to respect as well the role that local councils play in running a local service, but that does not mean that my hon. Friend is not perfectly entitled, and rightly so, to put the alternative case and to put it as forcefully as he has done in this place today.
In the minutes left to me, I want to say a few words about the national picture. I have made it clear that although Ministers do not run libraries and we do not fund libraries from a central Government fund, we have the backstop of the statutory library service. We have gone a lot further than that, however. Early on after the 2010 general election, we moved responsibility for libraries to the Arts Council, to a bigger organisation, joining up libraries with cultural provision, which was long overdue. The Arts Council had a £6 million fund to support culture in libraries, which has been very effective. Just before the 2015 election, we set up the leadership for libraries taskforce. At national level, that brings together key stakeholders—for example, the Local Government Association, the Society of Chief Librarians and my Department—and they work very hard to spread libraries’ best practice.
My hon. Friend asked what help Lancashire’s library service could get, should it choose to seek it, from central Government. One thing it could do is engage with the leadership for libraries taskforce. We have consulted on a draft vision, called “Libraries Deliver”, and we intend to publish the final document quite shortly. That will contain examples of best practice and of what innovation different library authorities can bring to bear in order to provide a more effective library service.
We have also been more practical still. For example, we spent some £2 million or £3 million ensuring that every library in England had wi-fi. It may surprise hon. Members to know that in a digital age—if one is looking for reasons to visit a library, surely one reason is the opportunity to access wi-fi and therefore do one’s homework or do some research on one’s tablet—more than 1,000 libraries in England did not have wi-fi. Now, thanks to us, they do.
We have published two best practice toolkits for libraries. We have brought co-ordination and focus to promote National Libraries Day—the one day in the year, in February, when we can talk about how important libraries are. We have invested in the enterprising libraries programme with the British Library. That allows key city libraries to work as hubs for entrepreneurs, updating the value that libraries bring to their communities.
On every level, we have tried to promote innovation in libraries; and the Society of Chief Librarians, for example, has promoted the value of books and reading not just in and of itself and for literature, but of course for health and wellbeing and a variety of other aspects. In an age when the summer reading challenge, for example, reaches more children than ever before, we see the library service evolving.
I for one think that the library service has an exciting future. I hear my hon. Friend’s perfectly legitimate and well-put concerns about the future of Lancashire libraries. I join him in urging Lancashire County Council, during this consultation, to think imaginatively, to look at new models of delivery that have been implemented elsewhere, to listen carefully to what he has said about the more efficient use of existing resources, to understand the passion and enthusiasm that the local people feel for their library service and to engage with the leadership for libraries taskforce about what opportunities there might be to learn from best practice elsewhere. As with every proposal to close libraries, we will keep this proposal under review, and if appropriate, we will act.
I beg to move,
That this House has considered elected mayors outside city regions.
It is a pleasure to serve under your chairmanship, Ms Dorries. This is not a debate about the merits of devolution; I am a passionate advocate for devolution. Over the past few years, local government has proven itself to be more efficient, innovative and accountable than central Government. This is a debate about how, not whether, we should devolve power, and whether it is appropriate for the Government to impose a one-size-fits-all form of devolution designed specifically for cities on counties and non-metropolitan areas. It is a debate on whether the public should have a right to choose how they are governed, as well as who they are governed by.
My constituency, Ellesmere Port and Neston, is governed by Cheshire West and Chester Council, which, along with Cheshire East Council and Warrington Borough Council, forms part of the Cheshire and Warrington local enterprise partnership. Cheshire and Warrington is not a metropolitan area or a city region. It does not have a single urban centre. It is made up of several large towns, a city and a considerable number of smaller towns and villages. It does not have an established identity, is not a defined place and is made up of separate areas of economic activity. If 100 people living in the area were asked where they were from, not one would say they were from Cheshire and Warrington. They would say they were from Crewe, Ellesmere Port, Warrington, Congleton or Chester.
Cheshire and Warrington’s localities often have stronger economic relationships with neighbouring regions than with each other. Indeed, the west of the region has a stronger economic relationship with another country entirely—Wales. That is significant because, although a case can be made for a single elected figurehead of a city or a city region, it should be recognised that non-metropolitan areas have significantly different sets of circumstances.
Ed Cox, a director of the Institute for Public Policy Research North, which is a powerful advocate for devolution and a supporter of mayors for city regions, has argued that the mayoral model is not suitable for non-metropolitan areas. His view is shared by the Select Committee on Communities and Local Government, which stated:
“we believe elected mayors are likely to be better suited to urban areas. The scale, geography and economic diversity of non-metropolitan areas mean elected mayors are unlikely to be an easy fit…Those which do not want an elected mayor, but nonetheless want substantial devolved powers, should be allowed to propose an equally strong alternative model of governance.”
We have good experience of the mayoral system in Salford. However, our executive mayoralty was the result of a referendum in which local people had their say. They now find, regarding Greater Manchester, that another layer has been inserted above their heads without any such legitimacy. Does my hon. Friend agree that democracy must be at the heart of devolution?
My hon. Friend is, of course, right. An irony in this whole debate is that central Government are seeking to dictate to local government on the forms of governance. Genuine devolution should involve a two-way conversation.
I note that the view of the Under-Secretary of State for Communities and Local Government, the hon. Member for Stockton South (James Wharton), is similar to mine. In February, he replied to a written question:
“It is for local areas to propose governance structures that are right for them”.
At that stage, it seemed that there was no prescription that a mayor was necessary. It is possible to agree devolution without an elected mayor, as Cornwall Council has demonstrated. However, that option seems to have been taken off the table, and we are left with what appears to be a unilateral insistence that a mayor must be accepted as a precursor to any deal in which powers are devolved. There also appears to be an insistence that the deals be hurriedly put in place to meet a purely political timetable, so that elections can be held in May 2017. That goes against the views of experts such as Lord Kerslake, the chair of the Centre for Public Scrutiny, who stated that public engagement should take place during
“the process of coming to the deal”,
“having done the deal”.
The Communities and Local Government Committee also criticised the negotiation process, saying that it lacks rigour, and that
“there are no clear, measurable objectives for devolution, the timetable is rushed and efforts are not being made to inject openness or transparency into the deal negotiations.”
There is no doubt but that a huge amount of pressure is being put on council leaders to sign up to the deals, and to comply with the rushed timetables being forced on them. Leaders of areas that have in recent years undergone severe budget cuts that threaten front-line services and the most vulnerable residents are effectively being told, “We can give you the tools that you need to revive your areas, but only on certain conditions.” That kind of approach is undemocratic. It lacks openness, transparency, any consultation, and measurable objectives, and is being done in a rushed way that risks leaving areas with poorly constructed deals that are adopted without the application of any local scrutiny.
I do, however, give the Government credit for asking areas which powers they would like to be devolved, but that huge opportunity is being undermined because Ministers will not allow local areas to negotiate on an even footing to a sensible timetable, or to agree deals in an open way—and, most importantly, a way that genuinely involves the public. The Communities and Local Government Committee report states:
“For devolution to take root and fulfil its aims, it needs to involve and engage the people it is designed to benefit.”
I will focus on the need for discussion and consultation with the public, as there is a huge range of examples of major local changes being made with the consent of the electorate. For example, to trigger a community governance review on whether to set up a new town or parish council, local residents need to give their local authority a petition containing the signatures of at least 7.5% of the local population. If a local authority wants to increase council tax by more than 2%, it must hold a referendum. To put that in context, if the council where I live proposed an increase in council tax of about £30, there would need to be a referendum—but apparently no referendum is needed on whether to put responsibility for hundreds of millions of pounds into the hands of one person.
For a neighbourhood plan to be adopted, a referendum must be held. When new powers were devolved to Scotland, Northern Ireland, Wales and London, referendums were held and the people provided a mandate. Previously, whenever an elected mayor was proposed in a local area, as we heard from my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), a referendum was required. Indeed, regulations under the Local Government Act 2000 require councils to hold a referendum on the establishment of a directly elected mayor if at least 10% of local government electors in the area petition the authority to do so. In matters of local governance, the consent of the public has usually been sought before any significant change has been made. That was, indeed, recognised by the Conservative party in its 2010 manifesto.
This is an important debate. I recently visited a school and met loads of sixth-formers. I asked them whether they could name their council leader or county council leader. In each case, not one person could. An elected mayor would certainly bring about visibility, transparency and accountability. Does the hon. Gentleman not agree that that is healthy?
The hon. Gentleman says that Cheshire is too big to have a mayor. It takes an hour to drive from Cheshire East to Cheshire West, and it takes about an hour and a half to get from Warrington down to the south of Manchester. His argument does not stand up to those of us who live, and were born and bred, in Cheshire. A mayor would be able to get around Cheshire easily. Also, if you ask anybody from Greater Manchester, “Do you come from Greater Manchester?”, they would not say yes. They would say they come from Bolton, Oldham or Bury—from the great towns and cities of Greater Manchester—so I would say to you that people might say they come from Cheshire but, if pushed, they will say that they come from Warrington, Macclesfield or Congleton.
If the hon. Gentleman is so confident of his arguments, he will agree that it is important to test the strength of them by holding a referendum on whether the people of Cheshire and Warrington want an elected mayor.
I return to my comments on the Conservative manifesto, which pledged to create 12 newly elected mayors, subject to confirmatory referendums. Although I agree with the experts that an elected mayor is not an appropriate form of governance for a non-metropolitan area, I will support the people of Cheshire and Warrington if they say that they want an elected mayor, but a new level of governance should not be imposed on them without their agreement.
Since I secured this debate, the devolution deal in Cheshire and Warrington appears to have been put on hold, which gives us an opportunity for greater scrutiny of the process. I have questions that I hope the Minister can respond to in his reply. Should not the most appropriate governance structure for an area be decided by its people and their representatives, rather than in Whitehall? Will he agree to a referendum to gauge support for the proposal? If no desire to move to a mayoral model can be found locally, will he still consider devolving powers, if an alternative proposal for strong and accountable local governance is found? If not, why not? If powers can be devolved to Cornwall without a mayor being a prerequisite of any agreement, why not to Cheshire and Warrington, or indeed any other county? Is there any flexibility in the timetable, particularly in the light of recent events? Finally, will he commit to working with me and any other interested parties to find a way to deliver a devolution of powers with which everyone can agree?
Devolution has the potential to have a truly transformative impact on communities, allowing them to cast off the shackles of Westminster and rebalance our nation’s economy, but the Government risk sacrificing all that in many areas through their insistence that they know better than local people what is best for them. Devolution will hopefully allow local communities to create new jobs, unlock sites for development and improve transport infrastructure. Who does not want to see that? I warmly welcome the opportunities that a devolution deal could bring to my area, but I have heard nothing that convinces me that we need a mayor to deliver them.
I am just about to finish, sorry. I genuinely hope that a real opportunity to improve our area is not lost because of Government intransigence on the governance arrangements. If their position is that there will be no investment if there is no mayor, I will not forgive such a petulant approach, and I doubt the public will, either. It does not need to be that way, so will the Minister confirm that he will listen to the Select Committee, the Institute for Public Policy Research and, most importantly, the people we are here to represent by agreeing with me that a top-down, one-size-fits-all approach goes against the grain of what devolution should be about?
It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate the hon. Member for Ellesmere Port and Neston (Justin Madders) on securing this debate. It is better that we discuss the issues in this way than on “North West Tonight”. He started by saying that this debate was not about devolution, but it is about devolution, as well as about accountability for devolution. It appears from his remarks that he is in favour of devolution, which I am pleased to hear.
It is worth remembering the problem that the Government are trying to solve with this process. Secretaries of State already have all these powers, and the Government are going through this process because we live in a very centralised country—the power of Whitehall is unique. We see that in the gross value added performance of the regions versus London, with the difference between London and the north-west reaching its peak in 2009. Cheshire and Warrington has a local enterprise partnership and a strategic plan, and it is a relatively affluent part of the country, but its relative affluence has decreased over the past 20 years. All of us who represent the area should be concerned about that and should be considering ways to remedy it.
The fact of the matter is that our civil service is London-centric. Even now, London has higher public spending per head than any other region, including, amazingly, Scotland. That is revenue spend; on capital spend, we have seen IPPR reports stating that more is spent per capita in London than in the north-east and parts of the north-west by orders of magnitude. This measure is an honest attempt to fix that. If we proceed on the basis that we all want that, we can start to work on how we achieve it.
We have had two decades of failed regional policy, whether we are talking about the regional development agencies or whatever. The last Parliament started the devolution process with regional growth funds, the LEPs, city deals and growth deals. Some Labour Members opposed the process more or less at every stage—it is interesting that the hon. Member for Salford and Eccles (Rebecca Long Bailey) apparently still opposes the Manchester mayoralty. The Government therefore had to engage with local leaders such as Howard Bernstein in Manchester. In 2014, he said that there had been more progress on the devolution agenda in the previous two years than in the preceding 20, which is a good thing. It is good that we are continuing to try to make progress on that.
Devolution is asymmetric, and everywhere is a little different; it is complicated, but that is probably right. As we proceed with implementing the Cities and Local Government Devolution Act 2016, there will be more devolution. A clear principle of the Act is that the devolution has to be asked for. I am not here to support Government policy particularly, but the devolution has to be asked for. There is no question of doing something without consent, as we have just seen in Cheshire and Warrington—a mayor will not happen in 2017 because the local council has said that it does not want one. So be it. The council is accountable, and it needs to take responsibility for its decision, but to say that a mayor is being imposed is a little rich; it really is not true. The phrase “At the heart of devolution is democracy” has been used. That is right, and it seems a bit harsh to take the Government to task for wanting to have an election, but there we are.
We are going ahead with devolution in East Anglia, Liverpool, Manchester and various other places. The areas that are being devolved—skills, transport, health, housing and planning—are things on which local people want local representatives to have a say. It is absurd that decisions on, say, skills and the sorts of things that businesses in Manchester need are made by people in Whitehall, rather than Manchester. Exactly that principle applies to Cheshire.
It is true that accountability is a sticking point, because even in Manchester and Liverpool there has been an issue with elected mayors. I mentioned “North West Tonight” at the start of my speech; I saw Joe Anderson, the Mayor of Liverpool, on it. He was arguing with a Labour party colleague who was against elected mayors and he said, “Why should Secretaries of State devolve large chunks of their powers to committees of local authority leaders who might meet every so often?” Joe Anderson put that well. There has to be accountability for the aspects of power being devolved from Secretaries of State. None of this makes any difference to the powers of a local authority—there is no upwards devolution, or upward movements of power to the Mayor—but there is accountability. Apart from anything else, the National Audit Office will not let the Government devolve this stuff, or will give the Government a hard time, if there is not clear accountability for that responsibility.
That is correct. The Government can and should do what they want. My point is that we are talking about transferring power over hundreds of millions of pounds from Secretaries of State, and it is reasonable that the Government and the National Audit Office, as part of the process of government, should take an interest in ensuring that there is clarity about accountability.
Accountability works both ways. Just as the Government are right to impose or request accountability, those who decide that they do not want these powers, or who do not wish to ask for them, are also accountable. Warrington Borough Council, my own council, has voted down the proposal, which is completely its right. The council has an elected mandate, and the Government will not impose the measure, because it must be asked for. All I will say is that those people involved are also accountable to their constituents and to their region, with all that goes with that. If they have missed an opportunity, they are accountable for that, too.
I congratulate my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) on securing this debate and on how he has put the case against a one-size-fits-all form of devolution, which is what we are arguing about. I do not believe that what the Government are offering us constitutes real devolution. Real devolution would give powers to identifiable local communities, whether or not they wished to have a mayoral system, and would allow them to work with other local authorities as they wished. That is not what was proposed for Cheshire and Warrington. Instead, we were told that we must have a mayoral model and a Cheshire and Warrington local authority.
Much of my constituency—certainly on my side of the river—was not in Cheshire for a very long time; it was in Lancashire, and many people there still think of themselves as proud Lancastrians. They have little community of interest with some of the market towns of Cheshire, and much more in common with the nearby post-industrial towns across the border in Merseyside or Greater Manchester, yet we are told there is the only kind of authority open to us. No one has asked the people of Warrington whether that is what they want. They would be consulted only after a deal had been agreed. No one has asked them whether they want an elected mayor; I suspect that they certainly do not want one covering Cheshire and Warrington, because that is not sufficient local democracy.
I am profoundly depressed by the idea that power is better in the hands of one man—it usually is a man—than of many people. That is a depressing view of democracy, in my understanding of it. Although it might work in urban areas, it does not work in an area such as Cheshire and Warrington. It is of no benefit to my constituents to be run from Congleton or Macclesfield rather than London. Although a mayor would begin with only a few powers, they would be bound to gather more as time went on. Mission creep is built into the model.
No. I am sorry; I do not have time.
I also want to comment on the deal that the Government are offering us if we have an elected mayor. Much of the deal is about things that are going to happen anyway, much of it retains powers for the Secretary of State and some of it diverts money away from Warrington to other parts of Cheshire. To take transport as an example, we are told that we would get a Warrington rail hub linking High Speed 2 and High Speed 3 or the west coast main line. That is great, but first of all, we do not even have a route for HS2.
No. I have said that I will not give way, owing to a lack of time. The hon. Gentleman must forgive me.
We do not have an HS2 route yet. HS3, which in my view would benefit the north much more, is still a distant dream, and does anyone really believe that no rail hub would be needed to link the two lines, whether or not we have a combined authority and a mayor? We are told that we will get free passage over the Mersey bridges instead of paying tolls, but we were promised that in the general election. Will the Government go back on that if we do not have a combined authority?
Then there are the areas where the Secretary of State retains powers, such as the housing programme. The combined authority would have flexibility over only 15% of the housing programme, which could—the word is “could”—include some rented property. When high-value properties are sold, a proportion of the sale will be given to the combined authority, but the proportion is decided by the Secretary of State, and the Secretary of State must approve the housing programme.
None of that gives Warrington the powers it needs to build the kinds of homes that our communities need. Yes, we need starter homes for young couples, but we are also in great need of social rented housing. I suspect that all of us have seen people crying in our surgeries because they cannot get houses. Keeping power with the Secretary of State is not devolution. We are told that, under the employment and housing programme, 50% of the uplift on Homes and Communities Agency land—that is, new town land—will be ring-fenced for Warrington, but 50% of it will go to the combined authority. That is a transfer, to the rest of Cheshire, of money that should remain in my local authority. I do not see that as a good deal.
We are told that the combined authority can keep 100% of the growth in business rates over target, but who sets the target? The Government do. That is the first problem: there may be no growth at all. The second problem is that as business rates increase, grant will be lost. There is no extra money. The third problem is where that growth will come from. It will come from places such as Warrington, Ellesmere Port and Chester, not from the largely agricultural communities around the rest of Cheshire. In other words, it is another proposal to transfer money from poorer communities to better-off communities, and it is a con. It is a Tory proposal to ensure that the Labour-voting areas of Chester have permanent Tory Government. That is what this is all about. It is not about devolution to communities—[Interruption.] Yes, that is right. That is why my council has rejected it, and rightly so.
It is a pleasure to serve under your chairmanship, Ms Dorries. To follow on from the hon. Member for Warrington North (Helen Jones), I see a mayor as building consensus, bringing people together and working together to create and distribute wealth, but as long as there are politicians such as yourself, that might be an issue. I have heard a lot said in the last 45 minutes—
Sorry, Ms Dorries. I have heard an awful lot said, but what this is really about is a Labour party that does not like the idea of a Conservative mayor. There is a Labour Mayor in Greater Manchester and there will be a Labour Mayor in Greater Liverpool, and the thought of having a Conservative mayor is clearly what this is really all about. However, whether it is a Conservative mayor—or a Labour mayor—I would like to hope that she or he would work together towards consensus, for the betterment of all the people of Cheshire and Warrington. That is the whole point of being a mayor: when they are elected to office, they represent all the people, irrespective of political allegiance.
I speak as a Cestrian, Cheshire-born and bred. When I was growing up in the 1970s, when we were the sick man of Europe, I had three options for industries in which I could get a job. The first was the textile industry in Macclesfield, where my hon. Friend—[Interruption.]
Thank you, Ms Dorries. I am far enough away that I cannot hear any chuntering, but to return to my point, when I was growing up, we had three options for employment. The textile industry was huge in the ’70s, and even up to the ’80s. There was also the aerospace industry, at a place called Woodford, which made the nuclear deterrent and employed thousands of people. There was also something called the pharmaceutical industry. At the time it was ICI; now it is AstraZeneca. I worked in two of those industries: the textile industry and the aerospace industry at British Aerospace. Those two industries have gone.
We had a wake-up call a few years ago in Cheshire with the pharmaceutical industry at Alderley Park, when AstraZeneca decided to move to Cambridge. That was a very big shock for us as politicians, because who was to blame? It was not the leader of Cheshire East or Cheshire West, or indeed Warrington or Greater Manchester, but collectively it was a failure. AstraZeneca’s chief executive, who happened to be French, came from California, turned up in Cheshire and decided to move that industry away from Alderley Park.
If we had a mayor, he or she would be held responsible for ensuring that our economy in Cheshire worked with Greater Manchester, Greater Liverpool, the Mersey Dee Alliance in north Wales and the midlands powerhouse that we are developing. A mayor for Cheshire is exactly the sort of thing that we need. He or she would need the ability to work with colleagues in Greater Manchester, Greater Merseyside, north Wales and the midlands, but that would be part of the role: ensuring that our economy in Cheshire was on the top line.
My hon. Friend the Member for Warrington South (David Mowat) ably made the point, as he always does, about our growth. Relatively speaking, Cheshire and Warrington is a very prosperous place, but in the last two decades it has gone backwards compared with London and the south-east. We are a London and south-east-centric country, but we have also fallen behind in comparison with like-for-like regions in countries such as Germany. We have to do things differently in Cheshire to make sure that we keep up with the best.
I believe the role of mayor would be perfect for somebody to bat for Cheshire and Warrington on a national basis, making sure we get that inward investment, but also internationally. We can look at what the Mayor has done for London. London is a global city and Mayors of all political colours have done a fantastic job in representing the people of London and Greater London.
To go back to my original point, I believe the role is important, because it is about consensus and about us all working together to get inward investment. I also have a vested interest, as many of us here do. I have three young children. Why would they need to move to London and the south-east, as so many young people do? They can go to great universities in Cheshire and Warrington, and they can afford to live in Cheshire and Warrington, but they can only do all that if they have the jobs—the good-quality, well-paid careers—that we all want to see.
The north-south divide is growing. What happened at Alderley Park is just one example of that, but there are others. Somebody who could represent Cheshire and Warrington, such as a mayor, would be tasked with dealing with that and when it came to election time, they would be accountable for the growth, or otherwise, within the local economy. As it stands now, everybody goes running for cover—the leader of Warrington, and the leaders of Cheshire East and Cheshire West; “It’s not me”—and disappears. This process brings accountability for the people of Cheshire, irrespective of their political beliefs.
In closing, let me say that I believe this debate is not really about the arguments that the hon. Member for Ellesmere Port and Neston (Justin Madders) talked about. What it is really about is Labour party dogma. Labour cannot stand the thought of having a Conservative mayor, but Labour Members thought the same thing about police and crime commissioners. They did not agree with PCCs—they were all against the idea originally—but we live in a democracy and we now have a Labour PCC. There is no guarantee that there would be a Conservative mayor. There may well be a Conservative mayor, but there could also possibly be a Labour mayor, and we would expect them, irrespective of party allegiance, to represent everybody in Cheshire and Warrington and to bat for the community for the future—our future, but more importantly the future of our children and grandchildren.
I congratulate my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) and my next-door neighbour on securing this debate. It is a great pleasure to follow him; it is almost as great a pleasure as it is to serve and speak under your chairmanship, Ms Dorries.
I certainly will not need the six minutes per speaker that you suggested, Ms Dorries, because the case made by my hon. Friends the Members for Ellesmere Port and Neston and for Warrington North (Helen Jones) is so compelling. However, I will just follow up on a couple of points that have already been made.
The hon. Member for Warrington South (David Mowat) said that this system was not being imposed and he is absolutely right—these are deals that have to be requested. However, the structure is being imposed, because only one option is being offered. It is a one-time chance and it is very much a one-size-fits-all policy. It is “take it or leave it”.
As my hon. Friend the Member for Ellesmere Port and Neston said earlier, in his view, which is also my view, Cheshire does not lend itself to a mayoralty. Different parts of the county look at things from different angles and differently from how neighbouring areas look at them. My other next-door neighbour, the hon. Member for Weaver Vale (Graham Evans), talked about the success of the Mersey Dee Alliance. The fact is that so much of the growth in Chester, which is in west Cheshire, is predicated on that expanding and growing partnership, which has been so successful. I remind hon. Members that the MDA is very much based on a group of leaders of local councils on a committee, and yet it is working. The process of bringing those authorities together across the border is working, despite the fact that there is a committee and a group.
I am informed that the Secretary of State for Communities and Local Government told some of our local council leaders that he was not going to devolve powers to a committee, which is a bit rich coming from a man who sits on the principal Committee of the country, which is the Cabinet. Obviously, he has no faith in the Committee system or indeed in Cabinet Government.
When the Minister responds to the debate, I would like him to say why the Government consider that it is appropriate to impose what is essentially a one-size-fits-all policy when that is the opposite of what they stated they were trying to achieve. If he is really concerned about growth in our area, and I am sure he is, as indeed are hon. Members from all parties, perhaps he will get Ministers in other Departments to pay attention to some of the levers of growth, such as improving and upgrading the M56 in my area and in the area of the hon. Member for Weaver Vale, or improving the railway lines and the other forms of transport; for example, improving and electrifying the railway line through Crewe to Chester and north Wales. There are plenty of ways we can indeed drive economic growth.
Cheshire is where I grew up. It is not actually where I was born, for the reason that my hon. Friend the Member for Warrington North spoke about—when I was born in Warrington general hospital, I believe that it was in Lancashire, so I cannot claim to be purely Cheshire-born. However, I am certainly Cheshire-bred and Cheshire is the place that is very much in my heart. It is a privilege to represent the county of my youth, if not of my birth.
Cheshire is diverse geographically. As my hon. Friend the Member for Ellesmere Port and Neston said, the town centres do not necessarily look into each other, and in this instance a mayoralty is wrong. I am pleased that the mayoralty system seems to have been put on the backburner, which has given hon. Members and other members of the community an opportunity to have a debate about what is the best form of governance. It simply cannot be right that only one form is offered. If we are really keen to drive forward devolution in non-metropolitan areas, the Government really need to have a more open mind and listen to what else is on offer.
It is a pleasure to see you in the Chair, Ms Dorries.
I thank all the hon. Members who have spoken this afternoon—the contributions have been very thought-provoking—and I thank the hon. Member for Ellesmere Port and Neston (Justin Madders) for securing this important debate. It is important that he said that mayoralty was not suitable for all areas. He gave the example of Cornwall, which is not being forced to have a mayor. The cities in Scotland that have been offered city deals, with funding contributions from the UK Government, have not been asked to have a mayor either. It is not within the civic tradition of Scotland to have a mayor. Quite often, we will have a civic head in a Lord Provost and a political head in the leader of the council, but we have not been asked at any point to have a mayor as part of this process.
A very interesting report was brought out just yesterday by the Scottish Cities Alliance, called “Empowering City Government”. It contains significant discussions about what more the seven cities in Scotland might get from the powers coming to the Scottish Government as part of the devolution process, and about what more they might ask for. Mayors are not one of the many asks in that report. So this issue is not only being discussed in England.
It was also very interesting that the hon. Member for Ellesmere Port and Neston referred to the Communities and Local Government Committee report and mentioned consultation, because when the Committee, of which I am a member, held a public session in Manchester about the city deal there, members of the public, trade union representatives and a range of interested people expressed a huge amount of concern especially about health devolution. The people there did not quite understand what was being offered to them, how it would benefit them or what the full implications might be. What exactly it will mean is still being teased out. I share the concern that the hon. Gentleman expressed about the lack of transparency about the process, what is being offered and where the public fit in the whole scheme of things.
It has been said that perhaps not everybody can name their council leader. I can assure the hon. Member for Warrington South (David Mowat) that the council leader in Glasgow, who is a Labour council leader, is well known. The janitors in the city are currently out on strike and they are wearing face masks with the council leader’s face on them, so he is well ken’d and well known, although that is not perhaps working out the best way for him.
The hon. Gentleman mentioned how centralised the UK is, which is true—London is the great sucking machine that takes all the spending and all the jobs. It is very interesting that he made a comparison with Scotland, because we know anyway that we are subsidising London and have been for many years. The civil service is also in London—the hon. Gentleman mentioned that too—and the Government are intensifying the situation, with the HMRC closures, and other Departments locating back to London.
I thank the hon. Lady. For the avoidance of doubt, if my constituency and that of the hon. Member for Warrington North (Helen Jones) were in Scotland they would both receive massively more money per head than they do through the Barnett formula. The notion that Scotland subsidises London is bizarre.
The hon. Gentleman might find it bizarre, but people in Scotland do not. The Aberdeen region city deal was £550 per head, whereas the figure for Manchester was £2,130 and for Bristol £1,207, so Scotland is losing out compared with city deals in the rest of the UK.
The point about democracy and the chaotic structures that are being created has been well made. The now many layers of local government in England increase the lack of democracy in many cases, and powers have been transferred away from and above local people and local government to a layer that is further away from them. I understand that the Public Accounts Committee has challenged the effectiveness of the devolution deals so far.
The hon. Member for Warrington North argued against the one-size-fits-all approach, and I absolutely concur with her. She mentioned the notion that power devolved is power retained, with local authorities perhaps not getting all the things they expected and hoped for, and that certainly seems to be the case with some of the deals—more things have been asked for than have been allowed. The question whether it will be a Labour or a Tory mayor is interesting to observe from my position, because when local government reform was taking place in Scotland in the late ’90s, there seemed to be a bit of a sense that some areas had been pockled in favour of Labour or Tory councils-to-be. There are still issues there, with Glasgow not doing as well as its wealthy neighbours and people from round about using the services there. There remain issues about who pays for the services.
The hon. Member for Weaver Vale (Graham Evans) blamed many people for the loss of industries in his constituency, but he did not blame central Government, which I find curious. Responsibility is important; a mayor should have responsibility and accountability, but the buck must stop with central Government and the job policies that they create. They must ensure that the conditions are correct. In Scotland we have also seen the loss of heavy industries, but we are now in a position to make a bit of a difference. The shiny example is the saving of the Ferguson shipyard in Inverclyde, which had been run down over many years. The Scottish Government put in investment and found a buyer, and the shipyard is now thriving and taking on apprentices.
It is not a case of blaming people. We live in a global economy and a global world, and regions and areas must take that into account. The point I am making is that we know that in the next 10, 15, 20 or 30 years industries will see changes. They will be global changes, and the whole point of devolution is that it gives us the power to foresee such changes and make changes to our local economy, infrastructure, education and skills so that we are best placed to attract inward investment from across the world, or wherever.
The hon. Gentleman is right that there is a global economy, but the powers that are being devolved to local authorities are not enough to do what he says. In the interesting report that I mentioned, the Scottish Cities Alliance calls for more powers for local authorities in Scotland over immigration policy because there are areas that are not thriving as well as they could be and not attracting the skills that they could. The limited devolution powers do not go far enough.
The hon. Member for City of Chester (Christian Matheson) made some interesting remarks, and I ask him to reflect on this quote from the Chancellor. He said:
“I will not impose this model on anyone. But nor will I settle for less.”
Those two statements together do not make sense. He either wants it or he does not.
Finally, I want to put it on the record that the Scottish National party supports attempts to bring about local democracy, but we do not think that this measure is the radical devolution that is required. We are concerned that changing the formation of existing powers could create a chaotic structure. More thought needs to be given to the proposals.
It is a pleasure to serve under your chairmanship, Ms Dorries. I thank my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) for doing a sterling job in opening this important debate and for highlighting the very real concerns that exist not just in his area but, as the Minister well knows, right across the country in relation to the Government’s imposition of a mayor as part of devolution bids and deals.
The Chancellor—it is the Treasury not the Department for Communities and Local Government that is leading on the deals—has made it clear from day one that an elected mayor is a prerequisite condition for the devolution of major powers. It is the price that he has demanded for giving more control to local areas. Although individual areas were promised bespoke deals by the Government, there has been little room for manoeuvre.
The whole point of devolution, as the Minister knows, was to move away from over-centralised governance, to open up that dialogue between central and local government on what works best for each area. Yet, from the outset the discussions have been delivered in a top-down fashion, with the Government holding council leaders to ransom, threatening them with no deal if they do not yield to the Chancellor’s will. It is little wonder, then, that the Cheshire and Warrington devolution deal, and also the north-east, East Anglia, greater Lincolnshire and west of England deals, have all stalled, citing concerns regarding the Government’s imposition of a mayor.
It is not just council leaders and their councillors, however, who are expressing concerns. The Communities and Local Government Committee and a recent National Audit Office report have given weight to the legitimate criticisms that are coming up time and time again. The criticisms are about the insistence on an elected mayor, about local geography, transparency and accountability and, more importantly, about the deals being totally void of public consultation. The principle of elected mayors as a means of providing visible leadership and accountability is one thing, but imposing them is a totally different matter. Local areas should be free to decide whether an elected mayor is the right model of governance for them.
Similarly, the way in which the boundaries have been carved up in the geography of the devolution deals has bewildered many local people. Boroughs that have an affinity with other boroughs because of shared issues and identities have been passed over for devolution deals, while areas that have completely different issues, aims and objectives have all been lumped together.
I know that the Minister is not daft, so he must understand that what works for one area does not always work for the other.
If the devolution agenda is to move forward and be successful, there is an urgent need for some flexibility to allow local areas to adapt governance models to suit their own geographical and political circumstances.
It is also true that elected Mayors in two-tier areas are in danger of creating five layers of local governance. Add to that the undemocratically elected local enterprise partnerships, and we have a complex, overly bureaucratic, costly system of representation that will render the public absolutely dizzy figuring out where to go for which service and who is accountable when things go wrong.
I want the Minister to come clean. The truth is that the Chancellor has his own political master plan, an agenda that has nothing to do with bringing power and decision making closer to people but a desperate and devious plan to neutralise Labour-held councils, to position himself as the creator of a so-called northern powerhouse, and to strike alliances with Labour mayors or try to massage the geography of the deals to increase the chances of a Tory mayor presiding over what were once predominantly Labour areas.
Devolution for this Government is local government reorganisation through the back door and delegation of blame for their own cuts to the combined authorities. I hope that the Minister will provide some clarity in his response, and if there is only one question that he feels able to answer, can it be this: why, despite the myriad dissenting voices of the public, trade unions, councillors, experts, Select Committees and people in this place—even in his own party—is there a rushed insistence on mayors?
It is, of course, a pleasure to serve under your chairmanship, Ms Dorries. I congratulate the hon. Member for Ellesmere Port and Neston (Justin Madders) on securing this debate, on what is undoubtedly an important and topical matter of concern and interest to Members across the House, as we can see from the contributions that have been made today.
I also thank the shadow Minister for the best compliment she has yet paid me, in suggesting that I am not daft. I will ignore the sedentary chuntering from the Benches behind her, which was perhaps audible for the record. Indeed, not daft would be an understatement, were it true that I was able to choreograph the grand conspiracy that some of those who have contributed to this debate seem to believe is being perpetrated and were it true that I am such a Machiavellian political operator that I have taken the Tees Valley, the north-east, Greater Manchester and Greater Liverpool, to name but a few, and contrived to draw up devolution deals that will deliver Conservative mayors for those areas. I am delighted that some Members have such confidence in the political nous of those who lead my party that we may be able to achieve that, but I suggest that it is not the case.
I consider my bubble burst, but it was worth a try to take what compliments might be on offer when the opportunity was there. They have eluded my grasp on this occasion. Devolution is an important matter. It is transformational and of constitutional significance for how we run our country. It is important for driving future economic growth and recognises that it is those living in the communities affected by the decisions made by Government at whatever level who are best placed to understand how those decisions should be made and the things that can be done to grow the economies we represent in our different constituencies and different parts of the United Kingdom.
I will explain the difference between the sort of mayors we have had before and the approach the Government are taking to devolution at this time, as well as why that is the right approach. Looking at the history of mayors, we have all known and experienced civic mayors. That important role recognises the contribution that local councillors have often made in representing their local authority. We saw a transition to local authority mayors pioneered under the previous Labour Government. That saw powers taken from local authorities and focused in that executive person. Indeed, the example that the hon. Member for Warrington North (Helen Jones) gave was of powers coming from a local authority into that executive person, who would then use them in theory for the good of that area, with their democratic accountability and mandate.
The sort of mayors we are talking about with devolution hold powers coming down from central Government that are currently held by Ministers and exercised by civil servants. We want to give those powers to people who are closer to the communities affected by their exercise. We want to transfer those powers down. Where there is a significant transfer of Executive control and decision-making with those powers, we also want to ensure sharp accountability delivered by an elected person with the mandate to ensure that the work that needs to be done can be delivered, but who will be accountable to the electors of the area over which they are the mayor.
That area is not chosen by central Government. The process of devolution for any area is a deal, and that is a two-way process, but we ask areas to come forward and tell us the geography on which they think a devolution deal should be delivered. Rather than Government dictating centrally what the geography might be, we allow local communities, represented by their elected local authority leaders, to look at the geography of the economy in which they operate and tell us what they think is the right geography.
It is very clear. The Government do not have the power in statute to force any area to accept a devolution deal. It happens by agreement, working with local authority leadership. If an area is not happy with what is proposed, whether that is the geography, the powers or the mechanism of governance, the Government have no power to compel them to make that deal or to go down that route of devolution at that time. What is so welcome is that so many areas have done that and have recognised the opportunities to choose their own geographies.
Members have spoken about the overlapping and different-layered identities of our constituents. I represent Stockton South in Teesside, which is also within the larger Tees valley. My constituency is half in the old north riding of Yorkshire and half in County Durham for ceremonial purposes. People identify in different ways in my constituency. I of course understand that in any area or geography of any scale or size there will be differences of identity. The point of devolution is to identify the economic opportunities, and we have approached that from the bottom up. We have let those communities come forward, put their proposal on the table and persuade Government why it is the right thing. We do not accept everything that is brought forward. We work with them to test and understand why they want to make that deal, but that is the right approach, because it will give a geography that will last and stand the test of time.
We take the same approach with the powers that we are conferring with devolution. We allow areas to come to us with their bid, and we make a deal with them about the powers they want. There is not some centrally held list. There is not a restricted and narrowly defined number of things that an area can have. They can ask for whatever they want; it is a deal with Government. We have to agree, and we work with them on those areas in which we can find agreement, and hopefully we reach a deal in the interests of that geography and those communities, identifying the powers that will help drive forward the economy in that area.
The Minister is being generous in giving way once more. Warrington would be subject to four different tiers of local government under the current proposed deal: an elected mayor, a combined authority, a council and parish councils. From what he is saying, can I deduce that if Warrington came to him with a proposal for more powers to the local authority, he would consider it?
We will always have discussions with any local authority, but it is very unlikely that we would be able to make a deal with Warrington alone. The idea of devolution is to bring together areas in sensible economic geographies to deliver extended and accelerated growth through additional powers currently held and exercised by Government. The powers are not being created out of thin air. It is not a matter of an extra layer; the powers are already being exercised by Ministers like me sat in Whitehall Departments and by civil servants who are not elected by the people affected by those decisions. We are giving those areas a chance to hold those powers nearer to the people affected by how they are used. We are giving them the chance to elect the people who make those decisions.
We cannot compel any area to have a metro mayor or the new devolved structures that so many areas have signed up to, but we have been clear that where areas want ambitious devolution deals and a wide-ranging package of powers to drive real change for their communities and to grow their economies, we expect a mayor to be part of that, because of the accountability, drive and mandate that comes with that position. The Government have made no secret of that, but I reiterate that we do not have the power to compel any area to be part of that process. It is very important that so many areas have welcomed what we are doing, engaged with us and entered into deals. We continue to talk about where deals might go next and what they might do for the future.
Members from all parts of the House have spoken about the specific Cheshire and Warrington proposals. I hope that area will be part of the process and will grasp with both hands the opportunity the Government present to do something exciting, to drive forward its economy, to bring power closer to local people and to recognise the incredible potential of that area and the people who live within it, which the businesses operating there can deliver on. It is an exciting time, and I hope that the politics and the conspiracy theories, some of which we have seen brought to the Chamber today, will not prevent those communities from benefiting from a significant transfer of powers that have been centralised over decades and political generations out to the people who will be affected by their exercise. That is welcome. In principle, it is welcomed across the political divide, and we have heard comments to that effect today. I hope agreement can be delivered so that the people in those communities can benefit from what we are setting out to do.
I think we have had an excellent debate. Most Members have generally supported the concept of devolution. We have talked a lot about accountability and working together, and I hope we are able to do that. The Minister says that no form of governance is imposed on any area, but in the next sentence he says, “We are not going to impose anything, but you have to do it on certain conditions.” That is the fundamental dishonesty at the heart of the process, and it is not genuine devolution.
I echo the words of the shadow Minister: we need some flexibility in this. We need to listen to local communities and understand what they want and need. We need to work together to try to deliver genuine devolution. I have not heard anything that has convinced me that an elected mayor is the right solution for my area, but I am absolutely convinced that if there are powers available, we should do our utmost to grab them as quickly as we can.
Question put and agreed to.
That this House has considered elected mayors outside city regions.