House of Commons
Monday 30 April 2018
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
The House will have been as sad as I was to learn of the death of my predecessor as Speaker, Michael Martin, latterly Lord Martin of Springburn. Michael was a decent, public-spirited man who had a real care and concern for Members, their staff and the staff of this House. He was a fine campaigner and a man both passionate about, and proud of, his roots. He also had, as many Members can testify, a great sense of humour. On a personal level, he was always very kind to me. I feel sure that my experience was mirrored in the experience of a very large number of colleagues across the House. I still remember to this day the lovely and generous letter of congratulations he sent to me after my election as Speaker. My deepest sympathies go out to Mary, his children and their grandchildren. Colleagues, there will be a fuller opportunity tomorrow for Members of this House to pay tribute to Michael Martin.
Oral Answers to Questions
Housing, Communities and Local Government
The affordable homes programme is a bid-led programme and spending within a financial year may vary from budget based on the number of bids. This is standard budget management practice. We are investing more in affordable homes, with an additional £2 billion provided last year, taking the programme to over £9 billion. That funding will support housing associations and local authorities to build more affordable homes where they are needed most.
May I add my condolences to the family of the former Speaker?
I congratulate the new Secretary of State on taking on this important role—we all know how important it is. Some £800 million was sent back from the Department to the Treasury this year. Will the new Secretary of State ensure that the Department budget is actually spent, so that we can get on with building the thousands of council homes—I stress council homes, because we all know that only council homes are truly affordable—we need for the millions of people who cannot afford their own home?
I thank the hon. Lady for her kind words and wishes. May I also associate myself with your words, Mr Speaker, on the former Speaker Michael Martin? He was the Speaker when I first joined this House, and I know what a kind and supportive man he was to hon. Members right across the House, in particular new Members. I know what a sad loss he is.
In response to the hon. Lady’s question, I point to the £9 billion I highlighted and to the fact that in 2016-17 41,530 affordable housing homes were completed, which is 27% higher than in the previous year. I underline the commitment given by my predecessor, to whom I pay tribute for his work. We will continue to focus on building homes for the future, including affordable homes, and raising aspirations.
I, too, associate myself with your comments, Mr Speaker, about the late Lord Martin. He was particularly kind to me when I arrived here after a by-election. I especially welcome the return of my good friend and constituency neighbour to the Treasury Bench, which is where he deservedly belongs.
Does my right hon. Friend agree that the key to affordability is increasing supply? Does he recognise, as a fellow London MP, that the Government devolved the strategic housing pot to the Mayor of London? Does he share my concern that while housing starts in the rest of the country have risen, in London, under the current Labour Mayor, they have fallen?
My hon. Friend makes a very important point about the flexibilities this Government have sought to put in place to deal with the essential issue of housing, which will be a core priority for me in the time ahead. I thank him for his kind wishes. Investment and flexibility will make a difference, provided they are taken up and we have partnership across the country, in delivering the homes people need.
I welcome the right hon. Gentleman to his place. Does his Department have any targets for the number of affordable houses? Will he promise to take a look at the definition of affordable, which is at far too high a price under this Government?
The hon. Lady will know that our ambition is to get building up to about 300,000 homes a year. That is the real focus and commitment of this Government. Yes, it is about affordability and it is about ensuring that people have a positive sense for the future about getting into the housing market, and that is what this Government are determined to do.
I will certainly reflect on the feedback that I receive from across the House in the days ahead. These are just the first few hours of my tenure in this role, but I will listen closely to the comments from my right hon. Friend and others, and certainly, as we look at the national planning policy framework, we will consider those matters carefully.
Although all Speakers become politically neutral, Labour Members welcome and endorse with particular strength your tribute to our former colleague, Michael Martin, as well as your condolences to Mary and the family, Mr Speaker.
I warmly welcome the new Housing Secretary; it is good to see him back. He has a big job to do and the Opposition wish him all the very best in doing it. The hon. Member for Bath (Wera Hobhouse) was right to highlight Labour’s analysis of his predecessor’s pathetic surrender of housing cash to the Chancellor. It shows the new Secretary of State’s real challenge: the huge cut in housing investment—from £4 billion in 2010 to less than £500 million now—and the huge fall in genuinely affordable new homes to rent and buy. Will the right hon. Gentleman at least make the modest commitment that while he is Housing Secretary, we will build more new social rented homes than we lose?
I thank the right hon. Gentleman for his warm welcome to me. As he will know, it has certainly been a challenging personal few months for me, and that is why I am so delighted to have been given this new responsibility on such an important policy issue, as he rightly points out. I point him to the fact that, with the £2 billion that was added last year, this Government are investing £9 billion in affordable homes. I also draw his attention to the fact that more affordable homes have been delivered in the last seven years than were in the last seven years of the last Labour Government. We will continue to have that focus on building more homes and on building more affordable homes, too.
The record is clear: 40,000 new genuinely affordable social rented homes were started by councils and housing associations in Labour’s last year in government, and fewer than 1,000 were backed by his Government last year. Does the Secretary of State not accept that the housing crisis demands that both central Government and local government do much more? In this local elections week, will he confirm a couple of important facts? Labour councils build five times more council homes than Conservative councils, and Labour councils get 50% more homes of all types built than Conservative councils, so does he agree that to fix the housing crisis, it is clear that we need more Labour councils and more Labour councillors to be elected on Thursday?
Even Labour councils build more homes under a Conservative Government. The right hon. Gentleman does raise the important issues of housing supply, the housing challenges that we need to meet and the roles of national Government and local government. I very much look forward to working with local government to make sure that we deliver on that agenda, because that is what this country needs and what will make a difference to people’s lives.
Local Government Funding
We are undertaking a fair funding review of local authorities’ relative needs and resources to address concerns about the fairness of the current system. We are making good progress in collaboration with the sector to introduce a simple, fair and transparent funding formula.
I congratulate my right hon. Friend on his appointment and welcome the news on the progress of fair funding, but will he look carefully at running more business rates retention pilots, particularly in my area of Staffordshire and Stoke-on-Trent, as I believe they provide at least a short-term answer to unfair funding?
I thank my hon. Friend for raising this issue. I welcome Staffordshire’s interest in future business rates retention pilots, and I hope it applies when the prospectus for 2019-20 pilots is issued. As the prospectus is open to all local authorities, as I think he knows, the decision on which applications are successful can be made only once they have all been considered, but obviously I will be examining the matter closely.
I congratulate my right hon. Friend on his appointment. He will know that about one third of households in my Havant constituency contain an older person. Will he confirm that under his leadership the social care precepts and the better care fund will mean an extra £4 billion for social care in this Parliament, and will he continue to work with Hampshire County Council’s adult services department?
I know that my hon. Friend and other hon. Members from across the House care deeply about this subject. As he will be aware, in February my predecessor announced an additional £150 million for adult social care, which means that councils now have access to £9.4 billion in dedicated adult social care funding over three years.
I know that there are pressures in areas such as children’s social services and I am aware of the joined-up work my Department is doing with the Education Department. I look forward to talking to Cabinet colleagues about some of these overlapping issues. I am sure the hon. Gentleman will understand that, in the short time since my appointment, I have not had a chance to do that, but I will certainly be doing so.
The Office for National Statistics defines Haringey and other similar boroughs as inner-London boroughs because of their demographics and socioeconomic characteristics. Despite that, Haringey is excluded from the Government’s definition of an inner-London borough. Will the Secretary of State look at that carefully in his funding review so that boroughs such as Haringey can be brought up in line with the Islingtons and Camdens?
The business rates retention pilot has been a lifeline to hard-pressed West Berkshire Council. Will my right hon. Friend also continue his predecessor’s pledge to tackle negative revenue support grant, because that will have a huge impact on hard-pressed local authorities?
I echo your lovely words of condolence to the family of Michael Martin, Mr Speaker.
I welcome the right hon. Gentleman’s reappointment to Cabinet. He has two shadow Secretaries of State to contend with, and I look forward to working with him and holding him and his Ministers to account on all things communities and local government. His appointment should bring a fresh approach to the crisis engulfing local government. He will know that Tory Northamptonshire is effectively insolvent and that Tory Worcestershire is now also experiencing financial pressure, with its chief executive saying last week that
“there comes a point where cost-cutting can’t go any further—there has to be a solution, and I think it has to be a national solution.”
Given that the pressures on children’s services and adult social care, alongside a 50% cut in their Government grant funding, are exacerbating these problems, will he now do what his predecessor failed to do and demand of the Chancellor of the Exchequer the funding that our councils—all of them—so desperately need?
Let’s not overdo it, Mr Speaker.
I hoped that the hon. Member for Denton and Reddish (Andrew Gwynne) would welcome the additional funds that have been given to councils for core spending. They constitute an important statement from the Government, who have given councils a real-terms increase in recognition of the challenges that they face. I hope the hon. Gentleman will also note the forthcoming social care Green Paper, which will enable us to engage in a further and broader debate about long-term funding for social care.
In recent months, we have launched the £250 million midlands engine investment fund and agreed on a second devolution deal with the West Midlands combined authority.
I, too, congratulate the Secretary of State on his appointment. Does he agree that the right infrastructure must be provided to support the economic growth to which he has referred? Although he is new to his post, may I give a quick plug to a bid from my part of the world, north-east Derbyshire, for a housing infrastructure fund to regenerate the Staveley area further, and will he commit himself to reviewing that closely when he comes to make a decision?
Obviously, my hon. Friend’s particular focus is on Derbyshire. The right social and physical infrastructure is indeed vital to driving sustainable and significant housing growth, and the £5 billion housing infrastructure fund will unlock up to 600,000 homes. This is a competitive process, but I am committed to funding the projects that will have the greatest impact.
The midlands seem to be leading the way in economic growth and job creation. Will the Secretary of State join me in celebrating, with Andy Street, the West Midlands combined authority and the midlands engine, the local achievement of 6.8% of gross value added, given that the national figure is 2.4%?
I will. Andy Street and the West Midlands combined authority have been pivotal to the success of the midlands engine. The number of businesses in the west midlands has increased by 9% since 2016, and its second devolution deal includes a £53 million allocation to prepare land and deliver jobs and housing throughout the Black country, including my hon. Friend’s constituency.
Last month, high-level proposals were received from some councils in Yorkshire about the so-called One Yorkshire devolution deal. We are considering those proposals carefully and will respond to the authorities in due course.
Does the Minister accept that it is now the settled will of the vast majority of councils in Yorkshire, and the vast majority of the people there, that we move towards a One Yorkshire devolution settlement, and will he encourage the new Secretary of State to initiate talks with the Yorkshire councils so that he will be ever remembered as the man who delivered the first elected mayor to the white rose county?
The hon. Gentleman is something of a Mystic Meg of the Labour party. Unlike him, I want the people of South Yorkshire to have their say in the elections next Thursday. The Conservative candidate, Ian Walker, has said:
“This is a golden opportunity to show what South Yorkshire can do.”
The Labour candidate thinks that it should be a part-time job, and the Labour authorities are fighting with each other so much that they cannot agree on what power or money the mayor of South Yorkshire should have.
As the Minister will know, Yorkshire is a massive county—by far the biggest in the country. What assessment has he made of the ability of one mayor to cover effectively the whole of such a big county? My dad had the privilege of being the Mayor of Doncaster for a while, and that was a pretty full-on job for him, so how on earth can one person do the job effectively and look after the interests of the whole of Yorkshire? What level of bureaucracy and cost would be incurred by a single mayoral office for the whole of Yorkshire?
I would not like to be drawn on responding to the high-level proposals we have received, but I will say this: later this year, the city of Leeds will be the only core city in the north of England that has not benefited from devolution, and that is a terrible shame for everyone who lives in West Yorkshire.
I join others in welcoming my right hon. Friend the new Secretary of State on his return to Government, and trust that he will not forget his Essex roots.
Conservative-controlled Southend-on-Sea Borough Council is keen to deliver as many new affordable homes as possible, so will my hon. Friend the Minister encourage local authorities to engage with innovative schemes that benefit the wider community, such as ZEDGeneration and the Ferdinand brothers legacy project?
We encourage all ambitious local authorities to be as innovative as possible, and my hon. Friend will know that in 2016 Southend council received £122,000 and Genesis Housing Association £420,000 for the regeneration of the centre of Southend, and that includes Conservative plans for more affordable homes.
We want York to get its local plan in place; that is the best thing for the community, as it gives certainty and a greater chance of those homes being delivered. A local authority statement of community involvement is an essential part of that process and it will be tested against the statement in due course.
My constituents recognise that we need more homes but are concerned about overstretched infrastructure and public services. What are the Government doing to ensure that those areas that are willing to build the most homes will get the maximum amount of funding for new infrastructure and public services?
My hon. Friend is absolutely right, and that is why we have brought forward £5 billion of approved funding for infrastructure funding—both viability funding and forward funding—which will unlock 600,000 new homes. The criteria are calibrated to make sure that the investment goes where there is the greatest demand for homes and where we can deliver the most homes and the best bang for the taxpayers’ buck.
When the Minister looks at new housing, will he ensure that it is actually affordable to constituents on average incomes? Will he also look at the position of leasehold homes, which are still being sold in my constituency, in spite of commitments from the previous Secretary of State, because those homes are not affordable on an ongoing basis?
The No. 1 way to improve the affordability of homes is to increase the supply, which is why our agenda is to get the number of new homes built per year up to 300,000. I looked at the Labour party’s Green Paper and it seems to suggest going back in the overall number of homes delivered each year. As the Secretary of State has already said, we have delivered more affordable homes in the past seven years than were delivered in the last seven years of the previous Labour Government.
Will the Minister meet me and other members of the Right to Build Expert Task Force—one member is one of his own civil servants—so that we can brief him on the great work it is doing in increasing housing numbers and improving quality and customer choice?
High-rise Buildings: Cladding
Our first priority is the safety of residents. The remediation of buildings with aluminium composite material cladding is a complex process, and it is important that we get this right. Of the 158 social housing buildings, 104 have started remediation, and seven of those have finished the remediation work.
With his new authority, would the Secretary of State agree that it would give more certainty and speed up the process if he were to say that only non-combustible class A1 materials should be used for external construction, as is the case in the rest of Europe? I doubt that he would live in a building that was clad in combustible or partially combustible material, so why should my constituents do so?
I understand the reasons for the hon. Gentleman making those points. At the outset, I want to underline my commitment to giving priority to these issues. This has been an utter tragedy, and our priority has to be—as it was with my predecessor—to ensure that survivors and communities receive all the support that they need. He will be aware that the Hackitt review is looking at a range of issues, and I would not want to prejudge that review, but he makes an important point and I am sure that it will be examined.
The Secretary of State has referred to his father, who was respected for his work in the Local Government Commission and the Audit Commission, and as chief executive of the London Borough of Greenwich, where, when I was there, he helped to get cladding for the Nightingale Vale tower block, enabling people to spend £5 a week to be warm rather than £30 a week to be cold. When the Secretary of State is bedded in, will he look at the problem of tenant/leaseholders in private blocks, where freeholders and others who own the freehold such as developers seem to fail to understand that tenants cannot be expected to pay the cost of recladding their buildings?
I am grateful to my hon. Friend for his comments about my father and his sense of focus and dedication as a public servant. My hon. Friend makes a point about the private sector and about landlords and those who own buildings seeking to pass on those costs. I would say clearly that the costs should not be passed on to leaseholders. They should be borne by the owners in the same way that local authorities and public sector buildings are maintaining that approach. I welcome the decision from one property developer, Barratt, to pay for remediation costs, and I hope that others will follow its lead.
On 17 June last year, the Prime Minister said:
“My Government will do whatever it takes to…keep our people safe.”
Plymouth Community Homes says that its request for funding to replace cladding has been turned down, and it is not alone. We have heard the same thing from local authorities up and down the country. Will the Secretary of State update the House today on how many funding applications to replace cladding have been approved by his Department, to demonstrate that it is doing all it takes?
Local Authority Finances
Local government will have access to more than £45 billion in core spending power in this financial year. In addition, local authorities estimate that they will keep around £2.4 billion in business rates growth.
I watched the Secretary of State’s impressive and moving speech in an Adjournment debate last week, and I know that the whole House will be pleased to see him in good health and back in his place. However, he is going to have to do better than his predecessor at supporting local government, because councils across the country are in crisis-management mode. They are raiding reserves to support revenue expenditure, and that is simply not sustainable. As Tory councils go bust, will he join me in congratulating Manchester’s Labour council on its excellent financial management in the face of some of the harshest and most unfair Government cuts faced by any council in the country under the Tories and the Liberal Democrats?
I hope that Manchester is willing to thank this Conservative Government for backing it with the resources it needs: £13 million in housing infrastructure funds, £30 million for adult social care and, indeed, a business rates pilot that is delivering £20 million, benefiting businesses across Manchester. Those are the actions of a Conservative Government who are delivering for people across the country.
If Leicestershire was as well funded as London’s Camden Council, it would be £350 million a year better off. Does the Minister agree that the only way of making good councils financially sustainable is to have a fair funding formula, with transparent formulae and up-to-date data? Will he look closely at the Leicestershire model for bringing that about?
I am pleased that Labour’s Hull City Council rejected the Secretary of State’s predecessor’s and the local Liberal Democrat councillors’ proposal to spend all its reserves, because we have seen in Northamptonshire how badly that can go wrong. Does the new Secretary of State accept that spending the reserves is an incredibly bad idea?
I thank my hon. Friend for his question; I know that he is following this matter carefully, as are his colleagues from across Northamptonshire. The Department and the new Secretary of State will consider all the representations received over the past couple of weeks, and we will be making an announcement shortly, most likely through a written ministerial statement.
I wish the Secretary of State all the best in his new role and for his future health.
Despite the figures that the Minister has given, the Local Government Association says that there is a £5 billion funding gap in local government finances from 2020, and the National Audit Office says that the position is financially unsustainable. Will he therefore look carefully at the Housing, Communities and Local Government Committee’s recommendation about business rate retention? When business rate retention changes from 50% to 75%, instead of using that to cut public health grants and other grants, we say that local authorities should be allowed to keep the extra money so that they can properly meet the rising demand for social care for the elderly, for looked-after children and for people with disabilities.
It was a pleasure to work with the hon. Gentleman’s Committee, and I look forward to reading its report in detail.—I thank the Committee for its work. As for the quantum of funding, he tempts me to pre-empt the results of the spending review, which is due next year. That will be the time to consider his point.
Tackling homelessness is a key priority for this Government, which is why we are spending over £1.2 billion through to 2020, we have implemented the most ambitious legislative reform in decades—the Homelessness Reduction Act 2017 —and we will be publishing our rough sleeping strategy by July this year.
The pilots will support some of the most entrenched rough sleepers in our society to end their homelessness. We are nearing the end of a detailed implementation and planning process with the three regions, and I look forward to updating the House further in due course.
The Homelessness Reduction Act came into force this month, but many councils have raised concerns that the new burdens funding that the Government have allocated is simply not sufficient for the full implementation of the Act. The Secretary of State is new in his post, but the causes of homelessness under this Government are not going away, so may I urge him to take an early look at the Government’s decision to review the funding only at the end of the current two-year period?
I thank the hon. Lady for that rant. Unfortunately, I have a feeling that she might be—what is the word we are looking for? [Interruption.] Some of the most important parts of the Act will be implemented in October, so councils have six months to get their places in order.
Homeless shelters will form part of the rough sleeping strategy we are bringing out at the end of June or the beginning of July. We expect there to be a sea change in how all the different parts of the social sector, the charitable sector and local government deal with rough sleeping and homelessness. I think my right hon. Friend will enjoy reading the rough sleeping strategy.
On behalf of the Scottish National party, I pay tribute to Michael Martin. He was the MP for Dennistoun, where I lived, and I pass on my own and my party’s condolences to his friends and family and to the Glasgow Labour family, who will miss him very much.
I welcome the Secretary of State back to the Government. He is the third Secretary of State I have faced, which I am sure everyone will agree is a clear sign of a strong and stable Government.
Homelessness is soaring in England, but in Scotland there has been a 38% reduction over the past 10 years. The Minister recently visited Glasgow to discuss some of the projects happening in the city I represent. Will she tell the House a little more about what she learned on her visit?
That is a very useful question—a fiver is in the post. One of the reasons I went up to Glasgow is that, although homelessness and rough sleeping had been reducing for four years, there has been a blip and Glasgow and other areas were not sure why there has been an increase in rough sleeping, particularly in Glasgow. I was hugely impressed by the work being done on rough sleeping by the charitable sector and Glasgow City Council, particularly in implementing their own version of Housing First. Glasgow City Council and the charities are doing very innovative work.
I thank the Minister for her kind words. I am sure the sector in Glasgow will be pleased to hear what she has learned.
Another group who struggle to get housing and therefore end up in homelessness are those with insecure immigration status, who often have no recourse to public funds. Can the Minister tell us more about what her Government intend to do to ensure that vulnerable men and women do not end up sleeping in the streets because of the policies of the Home Office?
The situation differs slightly in different parts of the UK. There is Government funding for projects in England that look after people who have indeterminate national status. I honestly do not know whether the situation in Scotland is a UK matter or a Scottish matter. I will have to write to the hon. Lady on that issue.
The new Secretary of State skirted the opportunity to address questions on social rented housing posed by my right hon. Friend the Member for Wentworth and Dearne (John Healey), so I will try again. In London in particular, for those on average incomes and below, affordable housing means only social rented housing—housing in which this Government are now investing virtually nothing for the first time since records began—so will the Secretary of State work with the Treasury to ensure that the Government go back to investing in social rented housing so that councils and housing associations provide truly affordable, good-quality homes and, by the way, cut the housing benefit bill that is currently going to rip-off private landlords?
I gently remind the hon. Lady that more than 10,000 local authority homes have been built since 2010, which is three times more than were built under the last Labour Government. We are investing a further £9 billion in affordable homes up to 2021; we have raised the borrowing caps on councils by £1 billion; and we are giving local authorities greater rental certainty from 2020.
We must deliver more homes in my constituency, especially affordable ones, so I would like to plug Chippenham’s housing infrastructure fund bid. Does the Minister agree that these new homes would serve as a vehicle to boost our communities with the infrastructure and services that we much need?
I thank my hon. Friend for that. She is absolutely right: where local authorities have the ambition to get homes built, it is right that they get support from central Government infrastructure funding, so that we do not just build the homes that our country needs but build up stronger local communities with them.
As part of achieving our commitment to halve rough sleeping by 2022 and eliminate it by 2027, we are working with local authorities to deliver effective interventions. We recently launched an expert multi- disciplinary team to support local areas in reducing rough sleeping quickly. Our homelessness advice and support team has also been supporting local areas on the implementation of the Homelessness Reduction Act 2017.
I thank my hon. Friend for her answer. She will be aware of the work being done by the Torbay End Street Homelessness campaign, based on a £400,000 grant from her Department for a project to examine ways to end street homelessness. What assessment has she made of the work done so far? What further support will be available to reduce street homelessness in Torbay?
I thank my hon. Friend for his follow-up question. We have been working with Torbay on this project, which has supported 70 rough sleepers into accommodation since its launch in December 2016. The impact of the grant programme will be evaluated. As I mentioned, we will be working closely with areas through our new team and the forthcoming cross-Government rough sleeping strategy. The team will be visiting local areas in the coming weeks to discuss this further.
When the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) was London Mayor, he described Tory housing policy in poor areas as “social cleansing”. Many of the victims of that social cleansing have ended up on the streets of Torbay, Rhyl, Prestatyn, Blackpool and other seaside towns. What specific additional funds has the Department made available to those seaside towns to deal with that appalling legacy?
Adult Social Care
Through the social care precept, the spring Budget last year and the recent local government finance settlement, councils will have access to £9.4 billion in dedicated funding for adult social care over the three years 2017 to 2020.
May I associate myself with your kind words on the sad passing of Michael Martin, Mr Speaker?
Does the Minister believe it is economically viable for councils to continue to use what little reserves they have left in the delivery of adult social care in their area?
I gently remind the hon. Gentleman of my earlier answer, which was that council reserves are some £20 billion across the country and are actually higher today than they were when we came into office. Councils will be able to increase spending on social care in real terms every year up to the end of this Parliament, and we are already seeing the results in action: delayed transfers of care are down by 34% in England. This is a Government who are delivering for people across the country.
Of the 575 beds in Kettering General Hospital, about 200 are occupied by patients, many of them elderly, who have completed their treatment but await transfer to social and other care. What can be done when the local county council simply is not up to the job of making sure that social care assessments are done in a timely way?
I am sure my hon. Friend will forgive me for not being drawn on Northamptonshire specifically, given the circumstances there and the decision to be made. In general, he is absolutely right to highlight the importance of getting people swiftly transferred to appropriate social care. That has been a focus of the funding that the Government have put in, and the better care fund is ensuring that joined-up care is happening. As I have said, delayed transfers of care are down by almost a third in the past year.
Growing the whole north is crucial to the delivery of our northern powerhouse. Since the northern powerhouse strategy was launched, direct foreign investment in the north has increased at a rate double that of the national average, and unemployment throughout the north is now lower than the national average.
I thank the Minister for his response and extend to the new Secretary of State an invitation to come to Shields and explain to my constituents why, when the Government launched the northern powerhouse four years ago, they promised increased growth and increased employment, yet in the time since, growth in Shields has been painfully slow and unemployment stubbornly remains higher than in the rest of the north-east.
I am a bit more optimistic for the north-east than the hon. Lady, because we are now entering a new golden era for the north-east, which can be seen in the Government’s commitment of more than £300 million—[Interruption.] Does the hon. Lady want to hear about what we are doing for the north-east? That new golden era can be seen in the Government’s commitment of more than £300 million to the Tyne and Wear metro, which the hon. Lady campaigned for, and in the historic devolution deal north of the Tyne. On top of that, this summer the first great exhibition in this country for 160 years will take place in Newcastle-Gateshead, showing that the north-east is at the heart of our northern powerhouse.
We are already investing some £67 million in the Humber and the Greater Lincolnshire local enterprise partnership, and I note that £20 million of that is going into my hon. Friend’s constituency. He will be aware that we committed in the industrial strategy to work on a business case for a Grimsby and Cleethorpes town deal. I hope that, in demonstrating that success, we can put our northern power towns at the heart of the northern powerhouse.
There is no surprise that the lived experience of people in Shields is of growth not happening, because when the northern powerhouse was launched in 2014, Government capital spending per person was £543 higher in London than in the north-east. London has seen its investment increase to £1,352 per person but, instead of the Government’s closing the gap, the north-east saw a cut in capital spending that increased the gap by 17% to £634 per person. How can the Government credibly claim to be the champions of the northern powerhouse when the evidence says that the money has not followed?
I am certainly not going to take any lectures on the northern powerhouse from the hon. Gentleman, because after his election he described it as the “northern poorhouse”. Unlike Opposition Members, the Government are behind the north, not least by investing £13 billion in northern transport—more than any Government in history, including the Labour Government.
I am delighted to have been appointed to this new role to deliver on housing—one of the Government’s top priorities is creating great places to live. In the past few weeks, my Department has announced important plans to tackle unprofessional estate agents and rogue managing and letting agents, as well as landlords who rent out dangerous and overcrowded homes.
I applaud my Department’s contribution to the magnificent Millicent Fawcett statue. The integrated communities strategy and the recent very moving anti-Semitism debate highlight the vital work being done to create a more united country, free from bigotry.
I thank the new Secretary of State for his reply. Many people in Blaydon constituency feel strongly that green-belt land should be preserved, but without support for remediation it can be difficult to build houses on brownfield sites in former industrial areas, especially as the housing infrastructure grant is competitive. What steps is the Secretary of State taking to protect our green belt, to encourage building on brownfield sites and to prevent building on parks and green spaces, as Bexley Council proposes?
I am grateful to the hon. Lady for highlighting the importance of the green belt, about which I agree, and I share her desire to see more development on brownfield land. Yes, there are issues relating to funding for remediation, but there will obviously be careful consideration of the national planning policy framework, too.
My hon. Friend raises an absolutely excellent point. I know that he will welcome the Government’s increased funding for pothole remediation after the winter that we have had, but I will take his point on board and ensure that local authorities are deploying those funds as quickly as possible.
A recent survey, the first of its kind, into the working conditions of wellbeing and social workers, commissioned by the British Association of Social Workers, makes for sorry reading. Working conditions are described as extremely poor, and it is noted that nine out of 10 social workers work an average of almost 10 extra hours a week and that more than half are looking to leave the profession. What is the Minister doing to reduce the demands faced by social workers to avoid a disastrous exodus of talent and expertise?
The hon. Lady is right to point out the important work that social workers do across the country in caring for some of the more vulnerable in our society. I know that our colleagues in the Department of Health and Social Care are examining the exact issue that she mentions, and I am sure they will be making a report in due course.
I thank my hon. Friend. He will know that the Government are putting £4.5 million infrastructure funding into the Forge Wood scheme, but he is absolutely right that developers must do their bit and keep their commitments. We are looking at this both in the consultation on the national planning policy framework and in developer contributions. We want to see those developer contributions treated more like contracts for delivery and less like the starting point for an endless haggle with local councils.
I will write to the hon. Gentleman.
I am grateful to my hon. Friend for flagging up this important issue. I will certainly listen to the points that have been made, look at the report and see what consideration either I or my hon. Friend the Minister for Housing can provide to engage in its recommendations.
My family will be delighted by how much exercise I am getting, jumping up and down.
We are committed to tackling unfair leasehold practices, which is why we are working with the Law Commission to make buying a freehold or extending a lease easier, faster, fairer and cheaper. We want to ensure that leaseholders have the right support to deal with onerous ground rent, and we will consider further action if developers’ schemes to compensate individuals do not go far enough.
I am delighted that Manchester, like several other authorities, is a beneficiary of the Government’s 100% business rates retention pilot, which is ensuring that local authorities keep an extra £1 billion this year. We will announce plans for a further round of pilots shortly after the local elections.
Thank you, Mr Speaker.
May I welcome the substantial central Government grants that have been made to enable Jewish buildings to be better protected? But given that three quarters of all anti-Semitic incidents happen in Greater London and Greater Manchester, will the new Secretary of State seek out the Mayors of those two cities to see what more can be done to protect their Jewish communities?
I am grateful to my right hon. Friend for raising this significant and important issue. I pay tribute to the Community Security Trust for its work in providing safety and security in this area. I will certainly engage further not just with my right hon. Friend but with local government to ensure that we continue to make progress.
The north Wales growth deal is primarily the responsibility of the Secretary of State for Wales. I am happy to update the right hon. Gentleman by saying that we are making good progress in looking at the proposals from local authorities. Once we have completed that work, we will make an announcement shortly about the next steps for all local authorities involved.
There are five district councils in Warwickshire. Four are Conservative-led and one—Nuneaton and Bedworth—is run by Labour. Nuneaton and Bedworth Borough Council has the highest district council tax precept of the five, and one of the lowest satisfaction ratings. Does my right hon. Friend therefore agree that Conservative councils deliver better-quality services at a lower cost?
Will the Minister acknowledge that youth offending teams have achieved huge success in working with and supporting young people to prevent them from getting involved in crime? Will he therefore tell me why their funding has been halved from £145 million in 2010-11 to just £72 million in 2017-18, and why councils are still waiting to receive their youth justice grant allocations for 2018-19?
The hon. Member for Denton and Reddish (Andrew Gwynne) has now twice mentioned Worcestershire County Council and Northamptonshire County Council in the same breath in this place. Unfortunately, he seems to be trying to establish a false narrative. Is the Secretary of State aware that I have met Worcestershire County Council and received assurances that its finances are on a stable footing? To suggest otherwise seems simply to be scaremongering.
May I welcome the new Secretary of State to his post and wish him well? Does he agree that no new house should be sold leasehold? There is no excuse for it. What steps will he take to help the many hundreds of thousands of people, including my constituents, who are now being financially exploited by their freeholds being sold on to dodgy characters?
I thank the hon. Lady for her very important question. The scandal over feudal leaseholds on new build is absolutely disgraceful. We are working very hard with the Law Commission to change the rules as to how this should go forward. I am delighted to say that some developers have got the point. In South Derbyshire, we now have big signs up on new build saying, “Freehold houses for sale here”.
Harrogate Borough Council recently dedicated an additional £150,000 to tackle the root causes of local long-term homelessness. The Harrogate Homeless Project runs the initiative, which is called SAFE—Service for Adults Facing Exclusion. It has been widely praised and we are already seeing results. May I invite my right hon. Friend the Secretary of State to come and visit the project to see for himself the amazing results it is achieving?
Sainsbury and Asda Merger
On 30 April, J Sainsbury plc and Walmart Inc. announced that they had agreed terms in relation to a proposed combination of Sainsbury’s and Asda Group Ltd, a wholly owned subsidiary of Walmart, to create an enlarged business. There are no planned Sainsbury’s or Asda store closures as a result of the merger. The proposed deal is conditional on clearance by the Competition and Markets Authority.
The Competitions and Markets Authority will hold pre-notification discussions with the parties and, when it has sufficient information, will commence its phase 1 investigation. Usually, a phase 1 investigation will last up to 40 working days before the authority will decide whether to clear the merger or refer it on to a detailed phase 2 investigation. I understand that the parties have requested to fast-track straight to phase 2. As part of its competition inquiry, the CMA can look at the buying power of a merged company in relation to its suppliers and the impact that the merger would have on them. Decisions about mergers are taken independently of ministerial control and are subject to legal challenge. Under the Enterprise Act 2002, Ministers have the power to intervene in mergers only on public interest grounds covering national security, media plurality and financial stability.
[Official Report, 2 May 2018, Vol. 640, c. 4MC.]Today, the Secretary of State and I have spoken to Sainsbury’s chief executive officer Mike Coupe, and Asda CEO Sean Clarke, so that we can better understand their plans. Additionally, I have today spoken to the Union of Shop, Distributive and Allied Workers and Unite unions, and I will speak to the GMB union immediately after leaving here. When I spoke to Len McCluskey this morning, I made it clear that I expect Sainsbury’s and Asda to conduct proper and thorough engagement with the unions. This afternoon, I have spoken to the Groceries Code Adjudicator, Christine Tacon, to reiterate the importance of ensuring that suppliers, particularly small and medium-sized enterprises, are treated fairly.
The UK’s merger regime is designed to offer clarity for businesses and to build investor confidence. Mergers are an important part of a dynamic economy, and the Government appreciate that they can bring real benefits to consumers and the economy as a whole by attracting inward investment. We will continue to monitor the situation closely.
The landscape for retailers has become increasingly difficult over recent years, and I am sure that the Minister shares my concerns regarding this deal, given its potential to squeeze competition in the market and the risks that it poses to workers, suppliers and consumers. He confirmed that there will be no store closures, but will he also confirm that there will be no job losses, no changes to pay, terms and conditions, and no closure of any sites within each company’s estates portfolio—distribution sites and offices, for example? If so, for how long will that promise be effective, and will he seek legally binding assurances?
It is clear that a duopoly of the big supermarkets—Tesco, and Asda and Sainsbury’s—will now emerge providing never-before-seen bargaining power. Indeed, the statement this morning included a promise to bring prices down for consumers, but it is feared that that will be at the expense of suppliers, farmers and manufacturers whose prices and terms will be driven down, pushing many to the edge of collapse. Can the Minister confirm that that will not be the case? In addition, does he agree that control of 60% of the market by the duopoly may pose a risk to consumer choice and provide less incentive to entice with good offers? If so, what assurances has he received in that regard? I am sure that he agrees that an urgent CMA investigation is imperative, but can he confirm that the CMA will prevent the integration of the companies during investigation, as it is entitled to do?
The Minister will agree that many of the risks associated with this deal do not bear directly on the CMA’s remit of testing whether there would be a substantial lessening of competition. As he said, he has no power to intervene directly in the merger as it does not meet the public interest tests of national security, media plurality and financial stability. Given that the deal could radically alter the whole grocery sector—from farm and factory to supermarket shelf—will he finally use his powers to broaden the scope of the public interest test to include deals of such economic and national significance, as he has been repeatedly asked to do?
I thank the hon. Lady for her important points. I share many of the concerns that she voices, but she says that the CMA’s remit does not extend to the substantial lessening of competition—[Interruption.] That is exactly what the CMA does. Its role is to examine competition matters—[Interruption.] If I misheard the hon. Lady, I apologise.
The CMA’s role is to consider the impact of this merger on not just competition in the marketplace, but suppliers. The hon. Lady rightly raised the impact that the merger could have on farmers and suppliers, and that was why the Secretary of State and I reiterated to Asda and Sainsbury’s when we spoke to them this morning the importance of their engaging with not just the CMA, but bodies such as the National Farmers Union and other unions to ensure that this is a proper process that we understand. The hon. Lady will know that section 172 of the Companies Act 2006 puts a duty on directors of the new company to have regard to the impact that their decisions would have on their suppliers, and we will be monitoring that very closely in the months to come.
We must also recognise, as the hon. Lady said at the very beginning of her contribution, that the retail sector is in a huge state of flux. We must all understand that the way in which consumers purchase these days is changing dramatically. There has been a 9% increase in sales through online vehicles in the last 12 months alone. That, by necessity, means that the retail sector has to change and adapt. One of the things that the merger will offer is reduced costs for the consumer, which I hope she will welcome. We all want to protect consumers and make sure they are getting great value for money, and that is one of the things that the merger promises. I can assure her, from the discussions I have had with the CMA, the Groceries Code Adjudicator and both parties, that ensuring the supply chain is properly protected is one of the priorities and something that I guarantee we will keep a close eye on.
The Minister said that he had a conversation with Mike Coupe about store closures this morning. Given that the CMA insisted that 53 stores were offloaded when the Safeway-Morrisons merger occurred in 2003, how can Mr Coupe give the Minister such an assurance, and what does the Minister have to say about that?
I thank my hon. Friend for that very important question. The reassurances I was given this morning were first that there would be no store closures and secondly that the head offices of both Sainsbury’s and Asda would remain open. Those are both very positive things. My hon. Friend mentions the forced sale of particular branches, and that is clearly a matter for the Competition and Markets Authority. When Sainsbury’s and Asda move on to the phase 2 investigation, they will get down to the granularity of the merger’s impact on particular villages, towns and cities. If there is a feeling that it will cause a lack of competition in the marketplace, the CMA has the power, when making a decision, to force the sale of stores to competitors to ensure that there is greater competition for the consumer.
The Secretary of State pointed out that the merger of Britain’s second and third largest supermarket chains will need to be approved by the Competition and Markets Authority and be scrutinised by regulators such as the Groceries Code Adjudicator, which was set up to protect small suppliers. As he said, the consumers’ voice is essential, and there are very real concerns that the merger will lead to reduced competition and be bad for shoppers, potentially hitting prices and the range of products available. Despite protestations to the contrary, fears remain that this could cost the jobs of the workers upon whose hard work these companies have been built. As we have heard, the Competition and Markets Authority may well demand that the combined group sells off some stores to prevent market dominance when there is both a Sainsbury’s and an Asda in the same area, but that can only be bad news for consumers and employees. Does the Secretary of State agree that the merger must not be at the expense of consumers’ interests or jobs, and will he commit to keeping the House updated on these important matters?
I thank the hon. Lady for her questions; she raises some very important points. Sadly, my responsibilities do not yet run to my being the Secretary of State, but I am grateful for the confidence and faith that she has shown in me.
In relation to the consumer, this is at the heart of what the CMA will consider. It will look at how this merger will affect our constituents—people concerned about the price of a pint of milk or a loaf of bread—and it will be very attuned to such an impact. All the assertions made by both Sainsbury’s and Asda so far show that they believe that this will lead to a reduction in costs, and therefore a reduction in prices on the shelf. The CMA and the Government will of course be keeping a close eye on that, but Sainsbury’s and Asda believe that this will lead to better prices for the consumer.
How does my hon. Friend believe the Competition and Markets Authority will react to the situation in the middle of Dunstable, where we have an Asda and a Sainsbury’s pretty much next door to each other, and also a Morrisons, a Tesco, an Aldi, a Lidl and an Amazon fulfilment centre in quite close proximity?
My hon. Friend is spoilt for choice, I would say, and that is what we want to see. We want a dynamic marketplace with great competition between retailers to provide not only greater choice, but better prices. The CMA will clearly look at that—during the six-month phase 2 investigation, it will draw together all the information in relation to particular villages, towns and cities—and I confirm to my hon. Friend that if there is any concern about choice and competition in Dunstable, the CMA will act on that and, if it has to, it will force the sale of stores to competitors.
I am sure the hon. Member for South West Bedfordshire (Andrew Selous) is a regular visitor to all those retail outlets in his constituency, and doubtless those shopping alongside him are veritably delighted to brush shoulders with their local Member of Parliament.
Asda said this morning that it will continue to be run from its head office in the centre of Leeds, where just over 2,000 people are employed. Given that in the last few months there have been two rounds of job losses at Asda’s head office, and in the light of what the Minister has just said about the merger providing an opportunity to cut costs, what assurance can he give staff in the head office that their jobs are safe?
The right hon. Gentleman will understand that any merger will be designed to improve efficiency, productivity and value for money for shareholders. So far, we have been given reassurances by Asda and Sainsbury’s that there will be no store closures and no job losses in stores. I cannot confirm to him as yet the impact that the merger will have on the head offices, other than to repeat the confirmation that we have been given that both head offices will be kept open. However, this is a decision for the CMA. I urge the right hon. Gentleman and other right hon. and hon. Members to bear in mind that the CMA will make a decision based on the evidence. If right hon. and hon. Members have evidence to contribute, they should make their case to the CMA to ensure that it considers all this on the facts.
I thank my hon. Friend for his statement. In Harlow, we have an Asda and a Sainsbury’s, and many hundreds of local jobs depend on those supermarkets. Although the companies say today that there will be no job losses, my concern is that in a year or so’s time, when this has all been forgotten about, hundreds of jobs will suddenly be lost not just in stores, but in logistics centres, distribution centres and so on. We need guarantees that those jobs will not be lost.
My right hon. Friend is a doughty fighter for his constituents, and I understand that he will be lobbying hard to ensure that there are no job losses. I reassure him that some 330,000 people are employed by this joint, merged organisation. It is a huge employer. It has given us very strong reassurances about jobs in stores. I urge him to engage not only with the CMA in relation to this investigation, but with both Asda and Sainsbury’s to make those points strongly and forcefully, as he always does.
The Minister referred to the importance of online business in driving this merger. Can he explain how the CMA’s terms of reference enable it properly to take into account competition between domestic bricks-and-mortar businesses and global online corporations such as Amazon?
Very few people know this area of competition policy better than the right hon. Gentleman. As I have pointed out, phase 2 of the CMA investigation will involve drawing together a panel that will consider all the facts about the size of the market and the impact. As part of that, they will use all their resources to ensure that they fully understand not just, as he puts it, the bricks-and-mortar marketplace, but competition from online retailers.
I welcome the recent conversion of the hon. Member for Salford and Eccles (Rebecca Long Bailey) to the concept of liberal, free market competition—there is more joy in heaven over one sinner who repents and all that. Will my hon. Friend the Minister ensure that however the merger plays out, he will always promote diversity of provision and competition to give consumers the greatest freedom and choice?
As always, my hon. Friend makes his point extremely well. He is absolutely right that everybody benefits from a vibrant marketplace and increased competition. He will also understand that with my other hat on—as the Minister responsible for small business—I am keen to ensure that any merger such as this protects small suppliers and SMEs, which make up 99% of our business community and form the backbone of all our constituencies. Competition—yes, but it is hugely important that we have an eye to protecting those suppliers.
Following on from the question asked my right hon. Friend the Member for Leeds Central (Hilary Benn), Asda has been headquartered in Leeds for 50 years. It is a huge part of our civic and economic life and our infrastructure. Given the Minister’s answer and the lack of assurance that he has received in his conversations with Asda and Sainsbury’s, people working at the Asda head office will be incredibly concerned about their future. The industrial strategy is about rebalancing the economy away from London and the south-east. What assurances can he give that the merger will not rebalance the economy away from Yorkshire and towards London?
I can give the hon. Lady the assurance that I was given by both Sainsbury’s and Asda, which is that both head offices will continue to be maintained. Over recent months, we have seen the real pressure the retail sector is under with the loss of some very well loved and well known high street names as the result of a very challenging business environment.
I make no comment on the validity or the veracity of the merger details—that is for the CMA to decide—but clearly what we see is two businesses trying to get ahead of the curve and futureproof themselves in a very challenging market. The hon. Lady is a doughty champion for her constituents, so I am sure she will engage with both Sainsbury’s and Asda to seek further reassurances, but I can reassure her that that head office will remain open.
For 11 years before I entered this place, I worked in the head office of Asda, alongside my hon. Friend the Member for Shipley (Philip Davies), in the constituency of the right hon. Member for Leeds Central (Hilary Benn). I can therefore understand the concerns of those who work there today. The Minister cannot provide assurances about the future of the head office—indeed, I do not believe that it will be there in a few years’ time.
I urge the Minister please not to view this as a merger. It is not a merger: it is a takeover by Sainsbury’s, in return for 42% of stock and £2.5 billion to Walmart. That is what it is, so let us stop using false terminology to describe what is actually happening. I urge the Minister to focus on the jobs in distribution centres, many of which are in working areas of the country. If this measure goes ahead, the distribution centres will be absolutely hammered a year or two down the line.
I understand very clearly the points my hon. Friend makes. He may not believe it to be a merger, but this is a merger within the legal definition that will be considered by the CMA. Clearly, there will be changes to the way the business is run to make it efficient and to keep it running well into the future. The assurances that Sainsbury’s and Asda have given us are that they will continue to run them as two separate businesses. I hope I can reassure my hon. Friend that, from the information we have been given, those head offices will continue.
Asda is a substantial employer in my constituency. With £500 million of efficiency savings coming down the track, will the Minister tell us what discussions he had, in the meeting with the chief executive officers, about how to protect jobs and the number of hours worked by employees? Each job loss has a massive impact on my community, which is already suffering under Tory austerity.
Asda and Sainsbury’s believe that the way to protect those jobs is by making the business efficient, effective and able to compete and improve its market share. The shareholders will be asked to vote to approve the merger deal, so they, too, believe that—otherwise they would not vote for it.
I think the hon. Lady needs to be careful not to cause undue concern. The public assurances provided by both Sainsbury’s and Asda so far are that there will be no job losses in stores and that there will be no store closures. Clearly, the aspiration behind the public utterances from Sainsbury’s and Asda is that they want their businesses to improve. The recent takeover by Sainsbury’s of Argos saw efficiencies and improvements in that business that lead to more people being employed. I am responsible for any merger and competition issues, which will be considered by the CMA. I urge her to engage with, and make her points to, the businesses themselves.
Order. As always, I am keen to seek to accommodate the extent of colleagues’ interest in an urgent question, but I remind the House that there is a further urgent question to follow this and thereafter, a statement by the Secretary of State for International Development on the situation in Syria, which, judging by precedent, I anticipate to evoke much interest. Therefore, there is a premium on brevity from Back and Front Benchers alike.
My hon. Friend makes an important point—I have dairy farmers in my constituency—and this is one of the issues that I have raised with Christine Tacon, the Groceries Code Adjudicator. My hon. Friend will know that in the last few weeks, in conjunction with the Department for Environment, Food and Rural Affairs, the Groceries Code Adjudicator and the Department for Business, Energy and Industrial Strategy, we have brought forward new proposals on dairy contracts to help exactly the kind of small suppliers that she talks about. In conversations with Sainsbury’s and Asda, both of them talk about the very real relationships that they have with their suppliers—with their dairy farmers. I hope that we can get some assurances to protect those relationships.
Just to be clear, suppliers will not be squeezed, head offices will stay open and stores such as those in Flint, where there is an Asda next door to a Sainsbury’s, will both be open in two years’ time. Has the Minister sought those assurances from the companies today?
Let me reiterate to the right hon. Gentleman that the matter of stores in the same town will be considered as part of the phase 2 investigation by the CMA panel. It will consider the impact of the merger on individual towns. If it believes that it is anti-competitive, that it will lead to a worse deal for the consumer if the two supermarkets—one being Asda, one being Sainsbury’s—stay open, and if it has concerns, it will force the sale to a competitor.
As my hon. Friend the Member for South West Bedfordshire (Andrew Selous) said, where there is a wider marketplace with a huge number of supermarkets, the CMA’s view may well be that there is no impact on competition in the town as a result of the merger. However, it is clear that this will be judged on a case-by-case basis, to protect the individual consumers in the right hon. Gentleman’s constituency and mine.
Asda in Longwell Green and Sainsbury’s in Emersons Green have been huge economic success stories in recent years, taking on hundreds of extra jobs since 2010 without Government interference. Will the Minister confirm that it is not the Government’s duty to be heavy-handed about the business interests of companies, but instead to create the right economic climate that will create jobs for the future?
My hon. Friend is absolutely right: we want these businesses to grow and thrive. We want a dynamic retail sector. That is why, just last month, I established the Retail Sector Council to bring together the major players in the retail industry to ensure that the Government are creating exactly the conditions that he highlights, to allow these businesses to grow and prosper. But as I said, look at the facts: the combined company will employ some 330,000 people. We as a Government want to encourage those jobs—not to get in the way and prevent them.
Although I am encouraged to hear the assurances about store closures and store jobs—I am also a former colleague at Asda—I encourage the Minister to be very careful about making assurances, particularly about Asda House, but also about jobs in distribution centres. Forces are at play that are far wider than just this merger—worrying though this is—and that will not be examined by the CMA. Specifically for me, the issue is automation in the logistics and warehousing sector, where I can imagine about 80% of jobs no longer existing in the future. That would particularly hit the north-east of England, south Wales and other areas that have become dependent on these jobs. As well as looking at this issue, the Government need to look more widely at those broader trends. Is the Minister going to do that?
I knew that the UK was a country of shopkeepers, but I had not realised that so many Members had retail experience in our supermarkets; it is encouraging to have such a well-informed debate. The hon. Lady raises issues about the supply chain and distribution sector. Clearly, that is not within the scope of the CMA investigation. The Enterprise Act 2002 clearly sets out the role that the Government and Ministers can play in relation to takeovers and mergers, and it is important that we stick to those established rules. That is what we will be doing in this case.
Following on from the Minister’s last comments, it is right that concerns be raised about jobs and consumer choice, but will he confirm that producers will be able to provide evidence to the CMA on the potentially devastating effect of this concentration of market power through this market consolidation?
Not only can I confirm to my hon. Friend that producers’ voices will be heard in the CMA deliberation—this six-month detailed process that will consider all the aspects, vertical and horizontal, of the merger—but I positively urge him to go back to his constituency, engage with his dairy farmers and small suppliers, and make sure they contribute to it to guarantee that their voices are heard.
I hear what the Minister says about the dairy industry, but this is not just about the small producer; it is about the relationship between the producer, the processer and the retailer—and that has been a poisonous relationship for decades. How will this increased concentration at the retail end help that relationship?
Clearly, the hon. Gentleman has a great deal of experience in this area—I know that his constituency was badly affected by the foot and mouth outbreak and that he did a very good job at the time. The correct formula for finding a resolution for his dairy farmers and the supply chain is through the Groceries Code Adjudicator. She has proved to be incredibly effective in standing up for the supply chain—not just for the small dairy farmers, but for the wider industry. If he has concerns, I know she will take them very seriously, so I urge him to take them up with her.
Today’s announcement will be of concern to staff at Sainsbury’s store support centre at Ansty Park, in my constituency, where they are engaged in buying, design and merchandising—functions that came up to the midlands from London. I had the opportunity to visit the site a couple of years ago. Will the Minister reassure those staff that they will have an opportunity to make representations to the CMA?
My hon. Friend is absolutely right. Huge strides forward were made in getting these jobs out of London and further north, and I know he has done a very good job in representing employees’ views. I can reassure him that their voices will be heard. He should convene a meeting, talk to the workforce and encourage them to contribute to the CMA inquiry.
I draw the House’s attention to my declaration in the Register of Members’ Financial Interests as a member of the GMB. I met members of the GMB in Asda in my constituency last year and other retail workers represented by the Union of Shop, Distributive and Allied Workers and Unite. Does the Minister understand the concerns in Cardiff, given the loss of almost 1,000 jobs in the last year at Tesco House in Cardiff, which affected many of my own constituents, and given that his Government’s own analysis on Brexit shows it will hit the retail and food and drinks sectors extremely hard in all the scenarios?
I understand the hon. Gentleman’s points, which is why one of the first things I did after being made Minister was to pick up the phone to the union representatives he talks about. We want to make sure that employees’ voices are heard and that there is proper engagement over the merger. It is clear, though, that in no way is this a response to Brexit. These are businesses based in the UK and competing in the UK, and the business will continue to be listed on the London stock exchange post the merger. I recognise the hon. Gentleman’s concerns, which he raises on behalf of his constituents, but perhaps we should stop playing politics with Brexit.
I think that what Kettering’s shoppers and workers want to know is first that they have choice and competition and secondly that those jobs are protected. If both supermarkets are thriving, either the Competition and Markets Authority will decide that there is no competition issue and allow the merged company to continue to run both, or it will say that there is a competition issue and that it has concerns for my hon. Friend’s constituents, and it will force one of them to be sold to a competitor who will, hopefully, run it just as effectively.
May I press the Minister on the question of distribution depots, which Mr Coupe has chosen not to protect? I remind the House that many of the distribution sites were established because of the decline in manufacturing, to replace manufacturing jobs. What assurances will the Minister seek from Mr Coupe and his fellow directors to guarantee that the jobs remain in those difficult areas?
I understand the point that the hon. Gentleman has made. He is clearly concerned about those jobs. There are a number of distribution jobs in my own constituency, Burton being at the centre of the country and well connected.
Let me make two points. First, the number of supermarkets being serviced will be the same, so the number of lorries, distribution outlets and goods being shipped will also be the same. Secondly, I have no power over the issue of jobs in relation to mergers. The Enterprise Act 2002 limited such powers. While we can have conversations, I urge the hon. Gentleman to do the same to protect those jobs.
Having previously been a supplier to both companies, I read about the proposed deal with much interest. Can my hon. Friend confirm that the implications for all parties will be considered—particularly the implications for the smaller regional food producers?
Let me say again that, as the Small business Minister, I am particularly attuned to that issue. I think that all of us, as consumers and as parliamentarians, want those small food producers—those artisanal businesses—to grow and thrive. Both Asda and Sainsbury’s have given assurances that they want to continue those important relationships. However, the Competition and Markets Authority, within its powers, will consider the impact on the supply chain.