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Westminster Hall

Volume 661: debated on Tuesday 11 June 2019

Westminster Hall

Tuesday 11 June 2019

[Mr Laurence Robertson in the Chair]

Social Mobility: Treasury Reform

I beg to move,

That this House has considered social mobility and Treasury reform.

It is a pleasure to serve under your chairmanship, Mr Robertson. I called this debate because I passionately believe that this country’s most powerful and most important resource is its people, and it is simply unacceptable that in the 21st century we still do not have equality of opportunity for people in Britain.

I am someone who knows what it is like not to have all the opportunities you want on the doorstep and not to be connected to those opportunities. I came into politics to get change on the ground for people, not just to debate what needs to happen. That is why about a year ago, with the Harrison Centre for Social Mobility, I established the social mobility pledge—to get action on the ground, working with businesses.

Hundreds of businesses have now stepped up to the plate to provide more opportunity for more young people, by getting into schools and helping to raise aspiration, talking about careers, allowing young people to come into the workplace to get work experience or apprenticeships and, crucially, looking at recruitment practices. Those companies are making sure that their approach on recruitment means they are open to all the talent out there. Hundreds of companies are involved. Already, social mobility pledge companies collectively employ more than 2.5 million people.

That work has taken me all over the country, from Sunderland to Hull, from Bradford to Manchester. With those companies and organisations, we are a coalition of the willing. We are finding out what works on the ground and are then spreading that insight and knowledge further and faster and creating a race to the top. The social mobility pledge is doing practical work to get more opportunity to millions of young people. I thank the businesses and organisations that are part of it, and part of this push.

This is a debate about social mobility and, of course, I noticed the announcement from the great leader, Jeremy Corbyn, at the weekend, ditching improving social mobility. I am sure the shadow Minister will want to respond on that, but clearly social mobility is just a distraction from the class war that Corbyn’s Labour party is engaged in.

Of course. The right hon. Member for Islington North (Jeremy Corbyn) has the sense, I think, that aspiration is a dirty word and is therefore not something that other people should feel is a good thing. That is wrong.

I was going to wait until my contribution to respond to the right hon. Lady, but it is quite clear that that is not the policy of the Labour party or of my right hon. Friend the Member for Islington North (Jeremy Corbyn). We want as many people as possible to do well, not just a chosen few in a grammar-school society of the type the right hon. Lady proposes.

I thought the hon. Lady would probably say that. Unfortunately, that illustrates that the Opposition have not understood what social mobility means. It means equality of opportunity. It would probably be better—this is why I raised the point—if we stopped arguing about semantics and started talking about finding common ground on how to get change for the better for millions of young people and communities currently disconnected from opportunity or too far from it. If this just becomes a debate on semantics, which is what I worry the right hon. Member for Islington North is trying to turn it into, we will not get anywhere fast. I will come on to why that is a problem, but the topic of this debate is that, while there are broader problems around how we debate achieving social mobility, which is why it has not happened, there is a bigger problem, which is about how the Government approach social mobility and the Treasury’s place within that.

Let us be absolutely clear: achieving social mobility means we achieve equality of opportunity for everyone in our country, irrespective of where they start, who they are and what their background is. It is not—I repeat, not—just about the gifted few.

I want to see system change. I have talked about the practical work I am doing on the ground with businesses and organisations through the social mobility pledge, outside of the Government, but if we are to finally crack the nut—unlike the Labour party, I do not believe we should give up trying to achieve social mobility—we have to ensure change inside the Government. To my mind, that starts with the Treasury, and that is why I called this debate.

After eight years in government, overwhelmingly as a Cabinet Minister and running three different Departments, my conclusion is that we effectively need to abolish the Treasury in its current form. What we have right now is dysfunctional and not fit for purpose. It does not achieve the transformation in opportunity and social mobility that Britain needs.

I congratulate the right hon. Lady on securing this debate. She has a long interest in the topic. She referred to the abolition of the Treasury. Has she indicated that to the 10 Conservative hopefuls for Prime Minister?

I will set out my wider strategy on why I think the Treasury in its current form is not fit for purpose. I hope in holding the debate that some of the arguments will get cut-through. If we are here to improve lives, for young people in particular, and to connect those young people to opportunity, things have to radically change, including in government. We need fundamental change in how the Government look at and invest taxpayers’ money, and that means the Treasury.

I congratulate my right hon. Friend on securing this debate and on her work on social mobility over many years. I think, like me, she was comprehensively educated—like many on the Conservative Benches—and joined the Conservative party precisely because we are the party of opportunity and aspiration. On the point raised by the hon. Member for East Londonderry (Mr Campbell), does she agree that we need to put pressure on the Conservative candidates to make sure that investment in education, which is a key enabler of social mobility, is a hot topic and something that every single one of them should have as a top priority should they become leader?

I agree. I am setting out how to fix the underlying problem of why we are underinvesting in people in our country and their potential. That starts with the Treasury. In my view, the Treasury has a twofold problem—first, how it operates across Government and, secondly, its policy approach.

On how it operates, it starts going wrong with the Treasury—UK plc’s finance department—having its own separate strategy from the Prime Minister, the chief executive. We have seen this down the years. It is traditional to see Chancellors at loggerheads with their Prime Ministers. We would never see a finance director able to countermand the CEO and undermine their strategy in any other organisation, yet that is exactly what we see, year to year and day to day. It has happened under Governments of every colour with the Treasury, as it is currently set up. Time and again, we end up with a Prime Minister, who is meant to be running the country, with one strategy, and a Chancellor with a different one, and both at loggerheads and going nowhere fast. It is no wonder that Prime Ministers do not get to deliver their strategies when the finance Department has an entirely separate one.

Parliament has a Budget speech every single year; it is essentially the Government’s strategy statement to Parliament and MPs for the year. It is not, however, the Prime Minister who delivers the strategy statement; it is the Chancellor. That does not make sense at all. Of course, these Budget statements are traditionally packed with politically driven, willy-waving, “look-at-me” projects for the Chancellor. Most are not even Treasury ideas. The best ideas are hoovered up from every other Secretary of State running Departments across Government, and they are generally not even the Treasury’s. Worst of all, most of these excellent policy announcements—for example, the one that we made a couple of years ago on vocational education and T-levels—are held up in order to wait for the Chancellor to announce them in a Budget statement. That is entirely dysfunctional, and it has to stop.

We should abolish the Budget statement in its current form, as delivered by the Chancellor. By all means, let us downgrade it and have it as a very important, but functional, annual presentation of the nation’s finances. Why do we not replace it with a Queen’s Speech update? This could be a proper strategy speech for Parliament every year, delivered by the Prime Minister. There is no reason why a Queen’s Speech update—a strategy speech—could not introduce a Finance Bill. I have listened to enough Chancellors effectively introduce other Departments’ Bills on social care and all sorts of things over the years. There is no reason why a Prime Minister giving an annual update on the Queen’s Speech progress could not set out the key terms of a Finance Bill. The Chancellor could fill in the details later.

I will move on to the spending review, which is also a hugely dysfunctional process—that is assuming it happens, which I will come to in a second. The spending review is essentially a strategy process for the Government, yet it is not led by No. 10 and the Prime Minister; it is led by the Chancellor and a finance Department that potentially micro-manages a wholly separate strategy from that of the Prime Minister of this country. Through this process, the Treasury has other Departments totally over a barrel. I think there would be less of a problem with how spending reviews are approached if the Treasury actually approached them effectively, but it does not. Right now, the UK has budgets set to 2020, which is next year. The country has no budgets in place for any of its spend after next year, which is wholly unacceptable.

Look at how this plays out on the ground. Last week I was up in Bradford to meet the opportunity area team, who are doing some absolutely fantastic work on the ground by connecting improvements in schools, businesses, the local authority and communities. This is a long-term—probably a decade-long—project to get structural change in a community that has bags of potential but needs its schools to do better and its businesses to connect with and develop the talent coming out of those schools. However, the team does not even have a budget after next year. How can we expect to get long-term change in our country, if budgets do not even extend beyond the next 12 months? It is entirely disconnected from the real world of how change happens on the ground. I have talked about opportunity areas, but it is writ large across virtually every single Government-delivered project that is happening on the ground to change things and improve lives.

The Treasury has just cancelled the spending review. From what I read in the papers, we will simply be rolling budgets forwards. At such a crucial time, I cannot think of a less strategic way to manage the UK’s public finances and invest in the future.

The right hon. Lady is making a compelling point on longer budgets. Does she agree that short-term budgets cause huge uncertainty for the responsibilities of devolved Administrations, who rely on knowing when the Budget will come and what the spending will be?

Indeed I do. Of course, not being able to plan ahead is a hugely inefficient way to manage resources. We spend efficiently when we can get long-term deals from suppliers and contractors, and when we can plan into the future. The inability of any of us to do this is absolutely an inefficient, sub-optimal way to manage finances. If we were to have the spending review, it would be a three-year spending review, but even a three-year or five-year spending review is not long term for a country. The companies that I spent 15 years working in did three-year to five-year spending reviews, but they were not Britain, which needs to invest for the long term.

How on earth are we going to invest long term in people and unlock social mobility if we will not even look beyond the next two or three years? If we will not even look beyond the next 12 months, it is absolutely impossible. This is a failing strategy, and a functioning department or ministry of finance should know that. The fact that the Treasury does not know that tells us everything about why it is not fit for purpose and should, as it stands today, be abolished.

The way in which that failing extends, operates and works on policy in practice—I speak as a former Secretary of State who ran three spending Departments—is that unless a departmental policy area is demonstrably and critically failing on the ground, the Treasury’s attitude is to turn a blind eye and hope that it all gets better. The Treasury’s technical explanation for this is that it hopes that that will drive efficiencies; that the system will have to work harder and deliver the same for less money. That might be true in some cases, but we are set up to fail because the Treasury has no way of understanding when that point has been long passed, and we do not have enough resources to deliver the Government’s plan—possibly the Prime Minister’s plan, but often it is the Chancellor’s plan.

Problems are not fixed early and are simply left. By the time the Treasury finally understands that it is a crisis, it is more expensive to fix it. Alongside a total lack of long-term planning, the Treasury does not fix problems early, which is hugely expensive. Departments’ spending—be it on prisons, schools, healthcare, local government or children’s and adults’ services—ends up in crisis, needing last-minute funding. That is a hugely expensive way to run the nation’s finances. Most importantly, it leads to real hardship on the ground, which is the exact opposite of what Governments of all colours try to achieve.

In my area of education, it was blindingly clear in early 2017 that, although the schools funding formula was broadly the right approach—levelling up schools that had traditionally been underfunded—more money needed to go through the formula, and the money should have come from the Treasury. That was clear to me from talking to colleagues and MPs in the House, and from talking and listening to teachers and parents, yet it was only after the election that we could take any action on that obvious problem. In fact, as everyone knows, I ended up doing my own mini-budget to release £1.3 billion to put into frontline funding. One might have expected that the Treasury would welcome a Secretary of State doing its job for it, but I had to haggle to get that agreement through the Treasury and be able to announce it. I fear that the Treasury yet again is making a similar mistake on school funding and repeating the process.

Reviews are another classic Treasury ruse. The recent Augar review managed to waste well over a year coming up with obvious conclusions about additional funding for further education, but no doubt the Treasury is delighted that it can kick the issue into the long grass for another 12 to 18 months. However, if the substance of the point is that FE needs additional funding, the Treasury has not done young people in the FE system any favours by turning its face away from the need to fund the system properly. It simply cannot be allowed to continue operating in this way.

I have talked about my experience of how the Treasury interacts with other Departments, but what about its policies? It should be managing the nation’s finances to maximise long-term value by unlocking the potential of its most crucial, precious resource—its people. It should set taxation and public investment policy to deliver that strategy for the long term. That is how to reduce the deficit sustainably. It needs to be a finance Department with policies to tackle weak access to opportunity.

For example, how do we recapitalise a generation of young people who do not have access to capital and therefore are not only disconnected from the fact that Britain is a capitalist society but cannot access opportunity? The Government and Parliament decided that they are willing to give young people access to capital if they want one kind of opportunity—a degree—but other opportunities are a wholly different matter. If young people want resources to move across the country to get the apprenticeship opportunity that they really want, to start a business, to put down a deposit on a house, or to rent a place somewhere where they can get on with their career, we do not capitalise them to do that. We should be doing that, and a functioning Treasury would look at those sorts of strategic measures to unlock a structural change in access to opportunity and social mobility in our country.

My hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) asked a good question about the leadership candidates. At the moment, we are hearing only simple, tactical taxation suggestions that, frankly, would not strategically or structurally shift the dial on social mobility.

My right hon. Friend is being very generous in giving way. Does she agree that enabling young people to reach their full potential is a core responsibility not only of the Treasury but of the Government? I suspect it is one of the key reasons why we got into politics in the first place. Will she join me in appealing to the Prime Minister, before she leaves office, to make a strategic and big move on education and education funding, which would ensure that the future leader, whoever it is, is obliged to deliver incremental, significant increases in funding for education in order to deliver on the key promise that she made when she first entered Downing Street three years ago?

If the Conservative party is to be taken seriously as the party of opportunity, it is important that it has a clear, articulated and well-funded strategy on developing our nation’s talents, and of course that means investment in schools. One of the problems is that, because the Treasury does not have an approach on valuing human capital, it does not understand how to look at valuing investment in schools alongside investment in physical capital. It does not have any sense of how to invest in human capital, which is perhaps the most powerful form of capital, but it is all over how to value the long-term returns on physical capital infrastructure projects, such as High Speed 2. The reality is that it is the capacity and talent of the people who get on those trains, log on to the broadband, get on the tube—like my constituents—or get into the cars that go on those roads that will determine whether Britain is successful in the future.

A functioning Treasury would understand that that is how to maximise long-term tax receipts and the effectiveness of public investment, because of course improving lives is the best way to take the pressure off public spend, so much of which is invested in lives that have gone wrong. Instead, the Treasury effectively just manages cash flow year to year—I am a chartered accountant with 15 years of experience in business, so I am as qualified as anyone to comment on this. We see reports saying that tax receipts and growth have been a bit better, so the Chancellor has a bit more money in his pocket. That is cash flow management, not managing the nation’s books for the long term. It is the polar opposite of a long-term strategy.

The fiscal rules should be scrapped and reworked on the basis of debt and deficit, how we deliver and measure long-term value and whether policy measures are creating or destroying it. In Cabinet, I regularly pointed out to the Chancellor the Treasury’s inadequate approach to valuing investment in people. An example of that is that we spend literally hundreds of thousands of pounds on the children and young people who end up in alternative provision and out of mainstream school. About 6% of them come out of alternative provision with a credible, strong or standard score in GCSE maths and English. That is no sort of strategy. A functioning Treasury would insist that it be reworked to deliver not only better lives but a smarter approach to spending. Those are some of the most challenging and vulnerable young people in our country, and they are often dealt with by children’s services. Those are the kids who have had the toughest starts and often face the bleakest futures. There is an opportunity cost to them in the failure that lies ahead of them in their lives if we do not help them get on track, and to the public finances, too. I have met lots of those young people. I have been up to the Beacon of Light—a fantastic place in Sunderland that helps young people to get on track and works with local businesses to slot them into careers. It turns their lives around and gets them on track. That is transformational not just for them but for Britain’s long-term public finances. Those young people generate more tax, which contributes to our economy and our society. The spend on welfare, the justice system and health due to continued family breakdown is less.

As Secretary of State for Education, I had those discussions regularly with the Chancellor, the Chief Secretary and the Treasury. A Treasury sensibly managing public finances for the long-term would run towards a business case that would improve those lives, but it was like pulling teeth. If the Treasury continues to see spending on health, education and prisons only as a cost, it will always try to minimise it. Instead, it should see that spending as an investment that generates a return. Changing the way the Treasury works so that it looks at early intervention and fixing problems before they become bigger would deliver long-term, sustainable and optimised public finances.

The Treasury’s strategy on taxation and spending should be looked at through a very simple lens—does it deliver improved social mobility in our country or not? Every policy should have a clear test: does it level the playing field on opportunity in the short and long terms? If the answer is no, the Treasury ought to ask whether and why it is wise to put taxpayer money against that project.

I know that the Treasury has under way some Office for National Statistics work on valuing human capital—I am pleased about that—but it is about how that capital is accounted for, and I am afraid that the work just scratches the surface of the issues that I have raised. I am talking about far more than the ONS project. I am talking about a Treasury that, in its present form, is clearly incapable of doing the job that it needs to do to manage Britain’s public finances, unlock social mobility and, dare I say, reform itself, which it will not do to itself.

We should consider breaking up the Treasury, perhaps splitting it into a Ministry of Finance and an Economics Ministry, while merging the former with some elements of the Cabinet Office and having it report properly to the Prime Minister, so that it genuinely delivers a Prime Minister’s strategy for our country. This morning, I have not had much time to do anything more than scratch the surface, but if we really want Britain to be the first country to achieve equality of opportunity, a significant part of that solution starts right at the heart of Government, by fixing the dysfunctional Treasury.

Unless we grasp that nettle, we should not be surprised to get the same day-to-day cash flow management that prioritises political pet projects, sets No. 10 and No. 11 at loggerheads with each other, which is dysfunctional for the nation, and, in the end, achieves the exact opposite of what we all want—for our children, young people and communities to have equality of opportunity, access to opportunity on their doorstep and the chance to be the best version of themselves. That unlocks the chance for our country to be the best version of Britain, too.

I thank the right hon. Member for Putney (Justine Greening) for securing this debate and for setting the scene so well. It is always a pleasure to speak on matters of such importance, and I support and sympathise with her remarks. I am pleased to see that the Democratic Unionist party is the second-largest party represented in the Chamber today, just slightly behind the Conservative party numerically.

I thank the right hon. Lady for her hard work on this issue and for the work she did as a Minister. I completely agree with her assessment of the Augar review, and I enjoyed reading her piece in the Financial Times earlier this month on that very topic—it was helpful for a better understanding of the debate, for which I thank her. Something that jumped off the screen was this:

“Its figures show that graduates going on to earn the highest salaries among their peers will see their overall repayments reduced by £18k—a third compared with now. However, for lower to middle-earner graduates, it is the opposite—Augar raises their overall repayments by £12k, almost double.”

I sincerely believe that that reinforces the view that the rich get richer at the expense of the lower class, who become stuck in a mire, as the right hon. Lady mentioned. We should also put on the record our thanks to the Library for providing a briefing pack with information and examples of the issue to help us.

It is important to look at the different opportunities for social mobility for women compared with those for men. There have been changes, which we must recognise, but later I will give an example and tell the story of a constituent who I think exemplifies the issue from a gender point of view. We must also address the fact that ethnic groups have experienced differing life chances over time. In her concluding remarks, the right hon. Lady referred to the need to give everyone the opportunity to maximise their potential, and I want to see that as well. There is also the issue of social mobility opportunities across the country in business and industry.

I am not here to play party politics—that is not my job in this place or what I am about—but it is only fair and right to recognise that Tony Blair’s Labour Government committed themselves to social mobility. At that time—before my time in the House—Blair also committed himself to addressing the issue of poverty, because social mobility and poverty were interlinked. To be fair, it is only right to recognise those commitments. The Conservative-Lib Dem coalition Government also had a clear strategy to improve social mobility. The then Deputy Prime Minister, Nick Clegg, said, “fairness means social mobility.” Clearly, he looked at that too.

The right hon. Lady referred at some length to human capital—it is important to put that on record—which I think is the crux of the matter. The Organisation for Economic Co-operation and Development defines human capital as the

“knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being”.

Clearly, we should never underestimate human capital if we want it to arrive at where its potential allows. In an October 2018 release, the ONS indicated that the total stock of human capital in the UK in real terms was worth £20.4 trillion in 2017, slightly down from £20.6 trillion the year before. It is good to recognise human capital.

Earlier, I mentioned a young lady in my constituency who I believe would fit into this category. She is an example of someone who, through social mobility, tried to advance her status and position in life, and succeeded. It is important to mention someone who achieved her potential when the regime was perhaps not set up to let her do so.

Does my hon. Friend agree that part of what we need to do is to further incentivise people, particularly young people, through the tax system, so that they can save? Personal allowances, for example, have risen in recent years, but we also need a rise in the national insurance threshold, so that people—particularly young people and those in part-time employment—can earn a higher net income, then work through the system with greater training and skills, and enter a higher earnings bracket.

My hon. Friend and colleague so often brings to debates an overarching view of where we and young people in our constituencies and across the whole of the United Kingdom need to be.

I will give an example that came my way only last week—although I know the young lady concerned—while I was researching for this debate. She has four children, works in retail, and her husband works in manual labour. Both are on low incomes and receive tax credits to supplement their income. Tax credits have been a great boost for many people. They are okay as long as they are going all right, but whenever they go wrong—if there is an overpayment, for example—they become a real noose around recipients’ necks. When done right, they are a bonus.

The young lady’s eldest child suffered a traumatic brain injury a number of years ago—he survived, thank God, although his life is altered as a result. The reason she came to my staff was to ask for help understanding the benefits system. Probably for all MPs, including the Minister, the most important issue in our constituency office is benefits—it outstrips by far all other requests to our office.

My constituent had decided that she would like to go back to college to get the qualifications necessary for her to enter higher education, with the goal of being an intensive care unit nurse providing the assistance for which she was so grateful in her life. That lady is everything that we might associate with the job: caring, compassionate, intelligent and dedicated. I believe that nursing is a calling, and she certainly has it. She just needs the opportunity—the social mobility for the human capital referred to earlier, to get the opportunity to advance herself and to do well.

In order to answer that call, however, my constituent needs to have her children minded. Her parents have passed on and her in-laws are both still working full-time. She gets tax credit for the few days that she works to help. That would all change if she became a student to provide a better life for her family. This young lady wanted to do better, but found herself in a system that almost holds her back, as my hon. Friend the Member for East Londonderry (Mr Campbell) was saying. What the right hon. Member for Putney said in her introduction is therefore exactly the issue that we have to address.

“Treasury reform” is included in the title of the debate, and clearly the Treasury has to take the issues on board—giving people opportunity and the chance to do better. My constituent, however, would have her tax credits cut if she was on a course, which she would therefore be unable to afford. That was her predicament. The system as designed does not allow for change, but ties us to where we are. Knowing the young lady as we do, she is a loss to the medical profession. If she wanted to claim housing benefit to offset the loss of tax credits, she would have to go on universal credit, and she simply could not afford the five-week lead-in because she has four children and rent to pay.

My constituent is stuck, and my fear is that the Augar review does not help people like that—the right hon. Member for Putney referred to that in her introduction, I refer to it now and others who speak afterwards will no doubt do the same. Such examples perpetuate the idea that university is only for the young and for the middle and upper classes, and that those who are called to do different things with their life cannot do it all. That frustrates me and, for the record, I would like to see the change proposed by the right hon. Lady, because it would be helpful.

My staff have made inquiries about the help available to get my constituent to the stage at which she can go into nursing with the bursary that being a student nurse brings. As for making education accessible to working-class people, however, we clearly have not achieved that. We sincerely need to work harder to do that. That is why I am supportive of my colleague, the right hon. Lady, and her desire to ensure that those in need of help and support to reach their goals can get it, regardless of the social structure into which they were born.

This debate is about giving opportunity and about ensuring that those who need help can achieve it. At the present time, our system does not help such people in the way that it should. The days of education only for the privileged are, and should be, a thing of the past, and the days of further education only for the young or privileged also need to be a thing of the past. This Government and the Minister must understand where people are coming from and help them to get to where they need to be.

My mum and dad sent me to boarding school. I know, honestly, that that was a big step for them to take. Those five years when I was in boarding school meant that my working-class family had to keep the same car for years, had no holidays, and so on. I am therefore deeply indebted to my parents for giving me that educational opportunity. They worked, scrimped and saved to make it happen. What I want to see in the society I live in and represent is everyone having the same opportunity. I do not see that now, unfortunately. That is why this debate is so important—I thank the right hon. Lady for securing it and for airing the issues so well today. By doing so, she has done a favour and sought justice for people across all of the United Kingdom of Great Britain and Northern Ireland, where opportunity and equality should be there for all.

It is a pleasure to see you in the Chair, Mr Robertson.

To my shock and surprise, I suppose, I agreed with an awful lot of what the right hon. Member for Putney (Justine Greening) said. It is just a shame that her Government have no intention of doing a lot of the things that she spoke about. There is no evidence that they will do any of those things, despite her best efforts. In many cases, indeed, what the Government have done to people across these islands is quite the opposite.

The right hon. Lady spoke about the Treasury running a separate policy to the Prime Minister and about the need for investment in the long-term rather than only year to year. I agree wholeheartedly with such things, which need to see change. Again, however, the Government seem intent on having reviews that go nowhere and on other delaying tactics, and not on investing in that long term. As I suggested in my intervention, that has a knock-on effect on the Scottish Government and their ability to do the things that they want to get on with and do.

Ongoing uncertainty about budgets, the wait or lag times between what the UK Government announce and their Budget, and then what the Scottish Government have to do with that money and the implications of the Barnett formula—whether things go up or down the UK—all determine what is left for the Scottish Government to spend. That adds to the unpredictability of the Scottish budget and the priorities within that, because the priorities of the Scottish Government are not necessarily anywhere near those of the UK Government, who set the budgets and determine how the money will flow. A huge amount therefore needs to change in how things are done in the UK. Unfortunately, however, I do not see things changing anytime soon.

The Social Mobility Commission’s “State of the Nation” reports provide a further damning indictment of the UK Government. The commission has found that social mobility has stagnated over the past four years at virtually all stages from birth to work. That is not a huge surprise to anyone, because poor social mobility has a close relationship with income inequality, an indicator that the UK has consistently failed to improve. The UK is the fifth most unequal county in Europe, according to the Institute for Public Policy Research.

Income inequality as an issue is of course not exclusive to the UK. Global trends point to inherited wealth increasing faster than earned income. Sustained efforts are required to get rid of the sticky floor, which makes it incredibly difficult for people to climb out of poverty. The OECD estimates that it will take five generations for children in poverty in the UK to reach the average income—that is a sobering statistic—and gives no prospect of things changing soon.

I have raised some of the issues surrounding the tax system before in this place. The tax system in the UK is simply not fit to tackle big issues such as income inequality and social mobility. It is unwieldy, unnecessarily complex and full of holes to hide in. This UK Government have provided a catalogue of tax reliefs for those who are already wealthy. A report by the Tax Justice Network illustrates that well. It found that wealthy families substantially reduce inheritance tax obligations by invoking tax reliefs on the value of agricultural and business property. Last year, the combined cost of that particular tax relief was £930 million—equivalent to the cost of employing 23,000 NHS nurses. In fact, £930 million can buy a lot of things—it is nearly the cost of expected savings to Government of the universal credit two-child limit. It is extremely telling that this Government prioritise tax breaks for the very wealthy while simultaneously cutting support for children at the lowest end of the income scale—those who need it the very most.

The hon. Member for Strangford (Jim Shannon) was absolutely correct to point out the gender gap in social mobility, and the gap for black and minority ethnic communities. That is writ large in the statistics and in the people I see at my surgeries. He was correct that, when done right, tax credits are a great boost to many people and that those wishing to better themselves within the bizarre structure that the UK Government have put together have lost out.

In my own family, my Papa Thewliss studied, went to night school and did the best he could for his family. In essence, that is part of the reason why I am here today—my grandparents were willing to put that investment into their children, so that my parents could be the first in their families to go to university, and so I am here today. On Saturday, my gran turns 99, and it is some satisfaction that she sees what has happened in her family to get me here.

The structure has to be in place for such social mobility to happen, however. University has to be affordable and apprenticeships have to be supported and achievable. That is not always available for too many people. The points that the hon. Member for Strangford made about the accessibility of apprenticeships and other things, and that the right hon. Lady made about people being able to travel to reach those apprenticeships, are important. It is also important that apprentices can earn a real living wage, because the minimum that apprentices are entitled to is a pittance. We cannot expect people to put their lives on hold for the pittance of an apprenticeship wage. More support needs to be put into real living costs, because apprentices have bills to pay and families to support, and that needs to be part of the package.

The social contract has been ripped up for the people who need it most. Last month’s report by Philip Alston, the UN special rapporteur, stated that austerity has decimated the lives of many people and actively pushed them into poverty. The UK Government have said that that kind of fiscal discipline is vital to reduce the deficit and build a strong economy, but that need for fiscal discipline evaporates completely when it comes to tax breaks for the wealthy, spending billions of pounds on Brexit preparations or putting nuclear weapons on the Clyde.

It is not difficult to draw the conclusion that the cuts were never about reducing the deficit and are ideologically driven. We are seeing even more blatant rhetoric coming from the Tory leadership race, in which the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) has promised a huge cut in income tax for the highest earners if he is elected. The Fraser of Allander Institute at the University of Strathclyde in my constituency has hinted at the impact that that will have on the Scottish budget. Because of the devolution of income tax, the tax cut would not apply in Scotland, but the resulting budget cuts would. To pay for it, national insurance would increase, which will have an impact because it is reserved—Scotland has no control over national insurance. We would lose out on the budget because of that policy, and national insurance contributions for people in Scotland would increase.

If I had the opportunity to give an extra £6,000 a year to one group of people, it would not be those earning over £80,000 a year. It would be some of the families rendered destitute by the hostile environment policy, for whom my office has to source school uniforms, food bank vouchers and Christmas presents, year in year out in some cases; or the women who are victims of domestic abuse, who have to declare that their third child was born as a result of rape just to put food on the table; or people with disabilities, who have to be hauled through a degrading and inhumane assessment system at the risk of being threatened with sanctions. Those are the people in society who desperately who need a break and to receive that £6,000. That is a choice that leadership candidates are putting forward as something they would bring in to Government if selected.

My colleagues on the SNP Benches and I have consistently called for devolution of all welfare powers, inheritance tax and other taxes, so that the Scottish Government can get on with the job of tackling income inequality. We have created the first Scottish income tax system, which is the fairest in the UK. The system has meant that 55% of Scots pay less tax, while raising £68 million for public services. The report I referred to by the Social Mobility Commission, which was so damning of the UK Government, congratulated the Scottish Government on the work they have been doing to increase social mobility. The report says that Scotland is going against the UK trend and becoming more socially mobile.

I urge the right hon. Member for Putney to look at what Scotland is doing in that regard. A person’s socio-economic status is now less likely to be determined by their parents’ socio-economic status. The likelihood of being in a professional job for those from a working-class background compared with those from a professional background has narrowed over the past four years, from 28 percentage points in 2014 to 23 percentage points. The Scottish Government have tried to tackle the issue of people from different socio-economic backgrounds getting into university. A huge amount of work has been done to switch that trend.

I give credit to businesses, as the right hon. Lady did, that are involved in that kind of initiative. I visited Zurich in constituency, which is taking more people straight from school into the insurance sector. It recognises that having a degree is not necessarily what it needs in its business—it wants a rounded range of skills for a better business. It has found it hugely beneficial to bring people in from school.

I am sure the hon. Lady will be pleased to hear that Standard Life Aberdeen is also very much walking the walk, and genuinely making an impact that goes well beyond its employees and into the wider community.

I agree that there are great examples of businesses right across Scotland—I could stand here all day talking about them. It is good that Standard Life Aberdeen is doing that and that more businesses recognise that including a degree on job adverts and applications is not necessary in many cases. By removing that and looking much more widely at the range of skills that people can offer, rather than what degree they do or do not have, social mobility will increase, so that is to be commended.

The Scottish Government are pursuing an inclusive growth agenda and view tackling inequality and growing the economy as two sides of the same coin. I am sure that the right hon. Lady would agree with that, given her speech. It is important to think about the type of society that we are creating with economic policies, and to consider what the point of growth is, if it is built on the backs of the most vulnerable. The Scottish Government have invested in decreasing child poverty, with an ambitious target to reduce it to 10% by 2030. They have introduced a legal requirement on public sector bodies aimed at reducing socio-economic disadvantage. Fundamentally, the Scottish Government oppose Brexit, which continues to threaten hard-fought steps towards reducing inequalities.

The right hon. Lady laid out the dysfunction of the British state in great detail. That is what we see from Scotland. Increasingly, people in Scotland do not believe that the British state will work for them. We have tried, we have waited and we have looked for changes, but they have not come. In fact, from the Scottish perspective we can only see things getting worse. We have asked for more powers, so that Scotland can try to tackle these things, but we do not yet have the full levers of powers that we would have as an independent nation in which we could tackle inequality head-on, using the full range of powers of an independent country. Time and again, the UK Government have abdicated their responsibility to the most vulnerable people. If they cannot do their job, they should allow Scotland the powers to do it instead.

It is an absolute privilege to serve under your chairmanship, Mr Robertson. This has been a good debate; it is nice to watch friendly fire and I enjoyed listening to the right hon. Member for Putney (Justine Greening) make an excoriating attack on the Treasury. I will come to her comments about social mobility later, but the fundamental truth is that when she talks about the current Tory Treasury, she is absolutely right. This Government do not treat spending on social infrastructure as the investment in our future that it should be. Unsurprisingly, as she says, this Government have failed to invest in our children, our young people and in all of us.

During the last year of the Labour Government, we spent almost 6% of our GDP on publicly funded education and training. By last year, that had fallen to just over 4%—a cut of more than a quarter. Given the challenges we face, we clearly need far more investment in skills and knowledge, to transform our economy, to deal with the climate crisis and to make the fourth industrial revolution prosperous and fair. Instead, as we know, during Tory rule school funding per pupil has fallen by 8% in real terms.

The consequences are blindingly obvious. More than 1,000 schools have had to rely on crowdfunding for basics such as pencils and textbooks. At least 26 schools are closing their classrooms early because they do not have the money to keep teaching. The proportion of pupils in supersized classes with more than 31 pupils to a single teacher is at its highest level for 36 years. The number of pupils doing a GCSE in music has fallen by almost a quarter since 2010, just as industry is asking us for more creativity and collaboration in education, because those are skills needed. Can the Minister honestly say his Government have put in the investment that our schools need?

Our further education providers have been cut by even more: sixth forms by 21% and colleges by 8%. The Social Mobility Commission found that 41% of FE providers had reduced their careers guidance and 48% their mental health support. In its report, it also cited evidence that 51% of colleges had stopped teaching modern languages courses. What about the notion of a global Britain post Brexit? Some 38% of schools and colleges have dropped courses in science, technology, engineering and maths—the courses our economy needs to prepare for the fourth industrial revolution. It is jaw-dropping that schools and colleges have been forced into that.

We have a recruitment crisis in nursing thanks to the Government’s scrapping of bursaries. We have a productivity crisis linked to a skills deficit and a lack of progression during people’s careers. Surely, the Government must have invested in adult education, given that we know people have to change course in their careers—nobody goes into a job at 18 and stays till they are 67 any longer—but no: that has been cut almost in half since 2009-10. Apprenticeship spending has fallen by 44%. The Open University, which has given a second chance to millions of people, is on its knees because of the Government’s tuition fees regime. It could not be clearer that older and part-time learners are simply scared off by the level of debt they are now expected to take on if they want to improve their education and change their course in life.

That is the situation in schools, colleges and adult education—cuts, not investment. What about early years? Sure Start has been cut by two thirds since 2010, with 1,000 centres closed. We know about the amazing benefits of Sure Start—we heard about them again this month—so it is not that the Government do not know about Sure Start’s value to society and the economy. Children are almost 20% less likely to be hospitalised by the age of 11 if their family has access to a Sure Start centre—that is massive—and the most disadvantaged children benefit the most. The impact on the NHS of fewer children being hospitalised is enough by itself to pay for 6% of Sure Start’s costs, and it is one impact among many.

The 2010 evaluation of Sure Start found that access to Sure Start increased children’s physical health, including their chance of being a healthy weight. We all know that childhood obesity, apart from causing misery, costs the state money. The 2012 evaluation found improvements in parenting and the home learning environment. The 2015 evaluation found improvements in children’s behaviour and more. All those evaluations were funded by the Government, but this Government have not learned that investing in Sure Start saves money. It pays off. Even looking at it from this Government’s ideological position, it saves money. It does not just improve lives.

The story is the same with youth centres, which have been cut by 40% on average across the country and by as much as 91% in some places. I understand that Tory Treasury Ministers might not understand that making a bat and a ball and a table tennis table available to young people creates wealth; it is hard enough to get them to understand that that is what happens when they open a Sure Start centre or invest in teachers in our schools. When investment in youth services is taken away, young people are far more likely to have their lives blighted and their potential wasted by becoming victims of exploitation.

In east London, we know that only too well. Youth centres and youth workers provide young people with spaces away from the county lines groomers on our streets. Youth centres are places where young people know they can find an adult to talk to—somebody who can listen to their problems, offer them real resilience against the troubles on our streets and point them towards opportunity. What is so essential is not the bat and ball and the table tennis table in the youth club, but the professional who stands by the young person’s side and can give them different ways of dealing with the man on the street who offers them chicken to be a lookout for him while he sells his drugs.

Good youth work stops children being groomed, stops children’s potential being wasted and stops children’s future contributions to our economy and our society being stifled. Ultimately, it stops the young people I have been speaking about ending up in prison, which I am sure the Minister knows is massively expensive—more than £3,000 per prisoner per month.

If we had invested earlier, how many of the lives that have been blighted by county lines exploitation could have been saved, and how much money would the Treasury have saved? How much more would have been contributed to our economy? Investment in social infrastructure benefits our economy and our society in so many ways for decades into the future. This pro-austerity Tory Treasury just does not get it. It is a barrier to the investment our communities need. The right hon. Member for Putney knows that from her first-hand experience as Education Secretary.

The situation is no different on other issues, such as the climate change crisis: the Chancellor is still trying to obstruct the green investment we need. Thankfully, the right hon. Member for Runnymede and Weybridge (Mr Hammond) will not be at the Treasury much longer. Unfortunately, the reckless, regressive and plain idiotic pledges of the Tory leadership contenders do not inspire confidence that anything will change. It is a great pity that the right hon. Lady did not throw her hat in the ring. I have watched what she has been doing over the past few months—I have even watched her videos online—and I thought she might be building up to a bid, but sadly not.

Instead, we have the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), who has promised £10 billion of tax cuts. That money would pay for more than 400,000 new teachers, but of course it is not teachers or nurses who would benefit from those tax cuts. More than 80% of the financial gains would go to the highest earning 10% of families. It is clear where his priorities lie, and it ain’t in investing in our children.

A Labour Treasury would be totally different. At the last election, we committed to providing over £6 billion more for schools and over £5 billion more for free childcare, as well as nearly £14 billion for post-school education, including free further education and higher education tuition. But this is not just about individual pledges; it is about how we will work across Government to ensure that our investments build social justice as we rebuild Britain.

We will support cumulative impact assessments of our Budgets to ensure that they help the many and not the few, and we will adopt the Select Committee on Education’s recommendations for reform of the Social Mobility Commission. The right hon. Member for Putney will know that that Committee is chaired by one of her hon. Friends. I have not seen him of late; I wonder whether he, too, is suffering from friendly fire. I share that Committee’s diagnosis of the problem. We have had many years of initiatives to improve social mobility that simply have not succeeded. I think the right hon. Lady agrees that sometimes, in the case of opportunity areas, those initiatives have been just a bit too small. At other times, they have had to fight against the headwind of austerity Budgets that have increased poverty and inequality while cutting the public services that protect us from them. Even when Budgets have been progressive and investment significant, focusing on social mobility has not made our country just, because the aim has been to help only a few to get on, and not to make our country fairer for all.

The right hon. Lady disagrees with that as a definition of social mobility, but from what she has said in the past about how we have never actually had social mobility in this country, I do not think she disagrees with that as a description of reality. I agree we should not get too caught up in semantics, but talking about social justice does not do that. Instead, it expands the debate back out to where we both agree it should be.

When I introduce myself I do not know what title to use. I say, “I’m the shadow Minister for social mobility, kind of against social injustice. I’m anti-poverty and for social justice.” I do it all the time because we do not have a term that adequately explains where we think we should be going. I do not want to argue about words with the right hon. Lady. I think we should focus not just on narrow, voluntary programmes that are based in the Department for Education, but on joined-up strategies to transform our country and make it fairer and more just for all. That should be backed by the investment that only the Treasury can provide.

Labour would appoint a social justice Minister, despite the problems that the definition of that term might cause, and we will ensure that that Minister co-ordinates action across Government, drives forward our social justice agenda, and ensures it is matched by needed investment. The Treasury must properly support all the actions that should be taken by Departments—not just the Department for Education or the Department for Work and Pensions, but the Department of Health and Social Care, the Ministry of Housing, Communities and Local Government, and even the Department for Digital, Culture, Media and Sport—so as to tackle the injustice and poverty that this Government have effectively created through their austerity measures. That new Minister will have the full support of the Treasury because they will be based there. There will be no separation between the wider Labour agenda and Treasury strategy, such as that described by the right hon. Lady. We are talking about serious investment and long-term commitment to social justice, and that is what Labour will offer.

It is a pleasure to serve under your chairmanship, Mr Robertson, and I am grateful for the opportunity to make my parliamentary debut as Financial Secretary to the Treasury and Paymaster General by discussing social mobility, which is an issue of great importance to the House, as today’s interesting debate has demonstrated. I have a certain degree of nerves, however, because if in my first debate a former senior Treasury Minister contemplates the abolition of the Treasury, I shudder slightly to think what my second debate may lead to, but I will take it for what it is.

I thank my right hon. Friend the Member for Putney (Justine Greening) for her fascinating and thought-provoking contribution, and I congratulate her on securing this debate. A Putney debate on social mobility is becoming an important part of the Treasury calendar—perhaps it should be counted as a fiscal event, along with other events of more familiar coinage. I very much congratulate her on her long-standing commitment to improving the life chances of people from disadvantaged backgrounds. That was a hallmark of her time in government, and I respect and applaud her tenacity in pursuing the issue now, as well as her work on social mobility more widely, which includes the social mobility pledge that she highlighted in her speech.

If I may, Mr Robertson, I will briefly canter through some facts about what the Government are doing in this area, and then come to the contributions that have been made, in particular that from my right hon. Friend. The Treasury’s record on social mobility is a good one. There may be plenty of work to do across Government, but the Treasury has had 35 new apprentices in the last financial year, and it offers internships and insight days to students from diverse backgrounds. It was ranked 34th on the Social Mobility Foundation employer survey last year. The Treasury is rightly seeking to make headway in this area, as should the Government as a whole.

The wider point is that social mobility is a force not just for social progress but, as has been highlighted, for economic progress. If one were to use philosophical terms, we should seek to create not merely negative freedom but positive freedom. We need not just relief from the things that constrict and impede human potential but active empowerment and support for people from every background in this country. Supporting social mobility is not only right but it is in the public interest, as it means that our culture, national conversation, politics and economics will benefit from the widest possible range and diversity of voices. It is also wise in a more directly economic sense because, as the global economy’s centre of gravity moves eastwards in the 21st century, the UK’s strength will lie in not merely the size but above all the quality of its workforce. Social capital and investment in human capital is vital to those things. It is therefore in our national interest to encourage and nurture people to achieve their best, because we need their talents and skills.

The Government’s record is a good one. They have achieved higher employment in every region of the UK, and introduced and increased the national living wage. They have taken millions of the lowest paid out of income tax altogether. That can, of course, only be a staging post, and the Social Mobility Commission’s report, published at the end of April, demonstrates that there is plenty of work still to be done. Importantly, however, we understand the magnitude of the task.

For many people, the yardstick for social mobility is home ownership, and as a result of Government policy, 80% of first-time buyers pay no stamp duty at all—that is one reason why the number of first-time buyers is reaching its highest level for 11 years. The Government have also made a real impact in education, which was in part due to my right hon. Friend’s time in government. A combination of the free schools programme and a reformed curriculum has narrowed the attainment gap between disadvantaged pupils and others at every stage, from early years to secondary school. Ninety-five per cent. of all early years settings are now rated good or outstanding. That is up from 68% in 2010 and means that a record proportion of children start year 1 with a good level of development.

The Government have backed schools with £1.3 billion of extra investment and protected the pupil premium, with 1.9 million more children in good and outstanding schools. However, that funding will not get to the heart of improving social mobility unless we also tackle geographical inequalities. That is why, as my right hon. Friend rightly highlighted, it is important to make school funding fairer and more consistent.

The Department for Education provides roughly £25 million every year through the national funding formula to assist the smallest and most remote schools, and in the last Budget it was announced that rural primary schools would benefit from a £200 million programme for fast and reliable internet access across the country. The apprenticeship funding model is designed to support individuals from disadvantaged areas, by providing cash payments to providers for training apprentices who live in the top 27% of deprived areas. The Government have awarded the first 11 Institutes of Technology across England, so that even more students can access an excellent technical education.

My county of Herefordshire is something of a social mobility cold spot, and I am particularly grateful to my right hon. Friend as she was Secretary of State when the Department for Education approved the New Model in Technology and Engineering in my constituency. That was the first new university in this country for 40 years, and it is a specialist tech and engineering institution that focuses specifically on a 50:50 gender balance, open access, and the kind of empowerment that is characteristic of social mobility around the country. It will make a huge difference not only in Herefordshire, where social mobility is much lower than it should be, but elsewhere around our nation.

The Government have invested in 12 coastal, urban and rural opportunity areas, where young people face entrenched challenges, to bring together local and national partners to work with local communities and bring about lasting change. Education must ultimately equip young people to make a successful transition into employment and life as a whole. Employment is obviously important, and people should have choices as they reach adulthood. That is why technical education is so important. The transformation is now under way through T-levels, which will mean that young people have the knowledge to get the highly-skilled, well-paid jobs of the future, and through continuing work on the apprenticeship programme, which will try to create more diverse opportunities; over 1.7 million people have started apprenticeships since 2015. As my right hon. Friend will be aware, in higher education we have record rates of disadvantaged 18-year-olds getting into university. There has been an increase in the take-up of degree apprenticeships, and we have been specifically encouraging bids to improve access to degree apprenticeships for disadvantaged and under-represented groups.

Skills remain of vital importance later in life, particularly in a 21st century in which people will be regularly re-skilling and re-educating themselves. The Government fully fund all adults to take English and maths to level 2, and from 2020 they will be funding basic digital skills. They are also establishing a national retraining scheme to support those in work, including the self-employed, to develop the skills that they will need to thrive in the new economy. To that end, the Government have pledged £100 million in funding to get the scheme up and running.

Let me pick up some of the questions raised by Members in the debate. The hon. Member for Strangford (Jim Shannon) rightly stressed the importance of sexual equality across social mobility and highlighted the complexity of the benefits system as a potential impediment to change. He is absolutely right about both those points. He may have misread the proposals in the Augar review. It is an independent report the purpose of which is not to diminish social mobility but to enhance it; it needs to be read as a whole. If the hon. Gentleman looks at the members of the panel who commissioned the report, he will see that they are all deeply committed to improving social mobility, not just through this report but in their wider lives and work.

The hon. Member for Glasgow Central (Alison Thewliss) gave a more combative speech. I remind her that the Treasury is the product of cross-party evolution; whatever its weaknesses, they are the product of historical processes. It may require radical change—I will come to that question later—but the suggestion that it is not an institution with its own ethos that has developed over many years and generations is one that any Treasury Minister would contest. If the Scottish Government are unhappy with the fiscal arrangements that they have with the UK as a whole, it is up to them to raise taxes themselves, using the new tax powers they have, and to spend that money as they see fit.

The hon. Lady was dismissive of the Government as regards inequality in different ways, including in education. I remind her that Scottish higher education policy has been regularly criticised for being regressive, that Scottish schools performed worse than ever in the Programme for International Student Assessment scores for 2016 and that it may be worth her while looking at the Scottish Government’s own record before raising these issues more widely.

The Minister is quite wrong in what he says; I ask him to correct the record, or at least to show his working. For the first time, more than 30% of pupils left school last year with a minimum of five Higher passes at a higher level, which is up from 22.2% in 2009 and 2010. The gap between those in the most and least deprived areas achieving a pass at higher level has reduced for the eighth successive year. The Scottish Government have made huge progress on education, in vast contrast to what is happening in England.

The hon. Lady misunderstood what I said. I said that the Scottish Government had been regularly criticised for having a regressive higher education policy. There is some evidence for that.

It certainly has been; if the hon. Lady looks at the record, she can see that. I also pointed out that Scottish schools had performed worse than ever before in the PISA rankings in 2016. She can check that; it is an objective fact, not a matter for debate. She is entitled to her views, but not to the facts.

The Opposition spokesperson, the hon. Member for East Ham—I apologise, I mean the hon. Member for West Ham (Lyn Brown); I am sure many footballers will not thank me for that. The hon. Lady mentioned table tennis tables; having been a director of the Roundhouse in London for many years, I know the value of local social involvement and engagement. I agree with it, and the Government have invested significantly in it. She seems to have forgotten that the Government will have spent almost £6 billion in 2019-20 on childcare, which is a record amount. They have doubled the amount of free childcare available for working parents of three and four-year-olds to 30 hours. The Government have a tremendous record in this area in many ways. I am glad she mentioned table tennis tables; I was playing at a free table tennis table, provided through public funding, only last weekend, in the village of Little Dewchurch in my constituency.

I am sorry; I have no time. If the hon. Lady had spoken for less time, I would have had more time to respond.

I will respond to the question raised by my right hon. Friend the Member for Putney. It is a very interesting attack, not just on the Treasury but on the model of Government that we have in this country. It deserves to be taken with the utmost seriousness. The point has often been made before, although not quite in the same terms. Historically, there is a tension in British Government between the Treasury as a finance ministry and the Treasury as an economics ministry; that is well understood.

My right hon. Friend’s concerns about short-termism in public policy making are also criticisms that have often been made. The extent to which this Government, their immediate predecessor and the one before that, have taken steps to attempt to ameliorate and address some of these issues is interesting. For example, we now have multi-year funding strategies for road and rail infrastructure, which we did not have before; there is a separate independent economics ministry, the Department for Business, Energy and Industrial Strategy, which is specifically designed to provide an economic counterpart to the Treasury; and, other steps have been taken to try to combat embedded institutional concerns about short-termism in public funding. Undoubtedly, there is more to do. The criticisms have weight, as has been shown by the responses that the Government have made; it is a point that the Government have well taken and are making significant progress.

There is an embedded tension between the desire for longevity in funding and the desire for democracy. If we lived in China, we would operate according to a 100-year economic plan; we cannot do that because this country has always been bound by the principle that no Government can bind their successors. It is right that we should try to build more longevity into public policy; I have touched on some of the ways in which that can be done, but I have no doubt there are many areas in which it can be done better. This embedded tension between cash constraints, managing the public exchequer, the democratic accountability of Ministers and long-term funding is one that will not be removed by abolishing the Treasury.

My right hon. Friend said that no company would ever see a contradiction between the chief executive and the financial director; I think she is mistaken. There are many companies in which the chief executive would like to spend money and the finance director, in league with the chair, prevents him from doing so. There have been many points in British government when that has been true. It is often true in a Labour Government, when the wisdom of having an independent Treasury, with a degree of control over public finances, stops a Labour Government from thoroughly spendthrift public spending policies. I close by saying that I encourage my right hon. Friend to be careful what she wishes for.

It has been interesting to hear people respond to the stark points that I deliberately made. There is more consensus on how we ought to approach investment than some of the politics suggest.

There is a tension between the fact that we really ought to be investing over the lifecycle, but in the end the electoral cycle drags our view to a more short-term basis. If Government and democracy are there to deliver for people, then we have to start addressing these issues. That does not mean removing the choice of politicians; it means helping the public understand when short-term politicians are taking decisions that have long-term costs, which the public may not want to bear.

I represent the constituency with the youngest demographic in the country, alongside Battersea. The average age of a voter in Putney is 37 to 38. Many people in my community think change is too slow. They want to see a more sophisticated strategy than, dare I say, the one that the Opposition set out. If throwing money could buy us out of the problem of weak social mobility, then the previous Labour Government would have fixed it. Clearly, it is more complex than that. We need an improved framework for investment, fiscal rules that unlock social mobility and an approach to Government finance that supports smart, long-term strategies. I am talking about a political philosophy that is ultimately driven by a belief in people and their potential, but that has to translate into practical change on the ground.

Motion lapsed (Standing Order No. 10(6)).

Hoover Pension Fund Deficit

I beg to move,

That this House has considered the Hoover pension fund deficit.

It is a pleasure to serve under your chairmanship, Mr Robertson. We are here to discuss the Hoover pension fund deficit, which was once a surplus of more than £100 million. Hundreds of former longstanding Hoover employees from my constituency and the surrounding area have faced appalling cuts to their well earned retirement money, and they deserve justice.

Like other prosperous UK pension schemes in the 1980s, the 1987 Hoover pension scheme, with 7,500 members, had a large surplus, which totalled £123 million in 1986. Changes to the pension scheme, withdrawals from the fund by Hoover to cover its financial difficulties, payments to the Government required by a short-sighted surplus tax implemented by the then Tory Government, and financial difficulties posed by the global financial downturn have resulted in the surplus shifting to become an overwhelming deficit. At the last valuation, in March 2016, it stood at approximately £500 million on a buy-out basis, and approximately £300 million with the Pension Protection Fund.

Hoover had long been in talks with the Pensions Regulator and the PPF to offload the deficit pension scheme, which it could no longer support without risking the company’s insolvency and the loss of the remaining employees’ jobs. The pension scheme is now transferred over to the PPF, after a regulated apportionment arrangement was agreed with Hoover, along with a 33% share in the business for the scheme, and a £60 million lump sum payment.

When the pension scheme entered the PPF, all Hoover employees in it who were still working and/or under the scheme’s retirement age, stopped gaining benefits. The annual value of those employees’ pensions, when they retire, was capped at the level for the scheme’s retirement age, which is 65. Retired employees now receive 90% of either the actual annual value of their pension, or 90% of the pension level for their age, whichever is lower. Those who have already retired from Hoover and are older than the retirement age have not had a cap on their pensions, but only the part of their pension funds earned after 1997 will be index-linked with inflation, which means that people who worked all or most of their careers with Hoover before that date are losing income because of inflation.

As always, the hon. Gentleman is bringing an important issue to Westminster Hall. Does he agree that the fact that those still under retirement age could receive an immediate 10% cut in their pension pot, and that 7,500 members will be affected—5,319 pensioners and 2,184 who have deferred pensions—shows a need for the Government, and the Minister in particular, to step in and help not only those members but their families, who rely on the pension they paid into all their working lives?

I agree 100%. The hon. Gentleman outlines the fact that people yet to reach pension age will experience a 10% reduction, which will cause huge difficulty.

Unfortunately, the case of Hoover pensions is not an isolated one, and we have become used to hearing in recent months and years of cruel injustices suffered by former employees of British Coal, British Steel and BHS. The evidence also suggests that we are likely to see many more such cases in the future. Before I go into more detail, and pose questions for the Minister, I shall provide some background on the history of Hoover in Merthyr Tydfil and explain the financial background that has led to the unacceptable injustices that its former employees now face.

Hoover has been an important employer in Merthyr Tydfil and Rhymney for 71 years, since the Pentrebach factory was established in 1948 to make the well-known Hoover washing machine. Only about 300 people were employed at the factory when it opened, but over the following 20 years, because of product demand, the figure rose by the thousands. By the time of Hoover’s 25th anniversary in Merthyr in 1973, more than 5,000 people were employed at the site, all contributing to the company’s pension scheme. Counting the company’s Glasgow plant, Hoover’s British workforce once peaked at 16,500 people. At its peak, the Hoover factory was the largest employer in Merthyr Tydfil County Borough, providing much-needed employment opportunities for generations of local people formerly employed in the iron and coal industries for which Merthyr Tydfil is famous.

That proved to be the high point for the factory: in the 1990s, amid financial difficulties, Hoover was sold to the Italian manufacturer Candy, which over the next few years would decline to invest further in the company or its operations. Job cuts continued over the next 10 years and in 2009, 61 years after the factory opened, production stopped altogether. Since 2009, only 100 staff have remained employed at the Pentrebach factory, in the company’s warehousing, distribution and sales operations. However, in May 2019 Hoover took the decision to move 45 jobs from Pentrebach to its headquarters in Warrington, in a move to centralise its operations, leaving only 60 posts, primarily in distribution, at the Merthyr Tydfil site.

I want to give some background on how the company’s pension scheme arrived at the state it is in today. According to the Pensions Commission set up by the Labour Government in 2004, from 1974 until 2000 the average annual real return on UK equities was as high as 13%, with investments in pension schemes during that time allowing them to flourish and pension contribution rates to increase. However, by the early 1980s the Thatcher Government had become concerned that UK companies were using large contributions to their pension schemes to lower their liability for corporation tax during years of high profits. During that time of prosperous UK pension schemes, what the Conservative Government saw as surplus funds to be taxed in a period of high equity returns were, rather, risk barriers against years of low financial profit and the rising longevity of workforces, as well as a reserve for future workers’ pensions.

The Finance Act 1986, passed by the Tory Government, required companies’ pension funds to declare any surplus of 5% or more, and either remove it within five years or lose part of their tax-exempt status. Many companies made much lower pension contributions in the years after the 1986 Act came into law, but market returns during that time remained so positive that many companies still had large surpluses left in their pension funds. Various UK companies took pension contribution holidays or looked to make improvements to their pension schemes to eliminate the surplus. It was no different in the case of Hoover, which in 1986 looked to wind up the existing pension scheme and replace it with a new scheme with improved benefits for members.

At that time Hoover had 5,500 employees in the UK, half of whom were based in Merthyr Tydfil, and the company’s UK pension scheme had a surplus of approximately £123 million, as I have mentioned. It proposed to take £87 million from the surplus, of which £42 million would go towards improved pensions and £27 million to the company’s general fund, with £18 million to be taken by the Conservative Government under the Finance Act 1986. In 1993, Hoover moved £16.8 million from the surplus to its general fund. It denied that it was being used to cover the £20 million in losses that it suffered from its infamous “free flight” sales promotion—when it promised two free airline tickets to customers who purchased more than £100 worth of products—but said it was for the general financial stability of the company. Hoover accordingly paid £11.2 million in tax to the Government, again under the terms of the Finance Act 1986.

During the 1980s and 1990s, therefore, Hoover paid the Conservative Government a total of £29.2 million. As I have explained, the terms of the Finance Act 1986 were established based on the average annual return on UK equities being 13%, as it was between 1974 and 2000. The Pensions Commission reported a considerably lower long-term average of just over 5%. The Government were incredibly over-optimistic if they assumed that 13% returns could continue into the long term. That is another classic example of the short-sightedness of a Government who placed the employer first, ignoring the employee, thinking only of short-term gain and completely neglecting the long-term potential impact of a policy on hard-working people.

I want to highlight the case of one of my constituents who has had to bear the brunt of this mess: Mr Phillip Little. Mr Little worked at Hoover in Merthyr Tydfil for 35 years, working at several departments and in various jobs across the company over a long and dedicated career. When he took his pension at age 55, he faced an immediate loss of 47%, resulting from payment holidays and Government and company withdrawals from the scheme in previous years, following the Italian company Candy’s takeover of Hoover in the 1990s and its refusal to invest or contribute further to the company’s pension scheme. Now, with the Hoover pension scheme being transferred to the Pension Protection Fund, Mr Little has had to suffer a further 10% reduction in the value of his pension due to the rules and caps, meaning he has taken a hit of 57% in total, losing over half the total value of his pension.

I think we would all agree that nobody should have to make do with less than half the pension they rightfully earned from their decades of hard work. Having been looking forward to retirement after 35 years with the company, Mr Little is devastated, and feels as though, in his words, he has been “mugged” three times over by company withdrawals from the pension scheme, payments to the Government and latterly the scheme’s transfer to the PPF.

Mr Little is one of many hundreds of former long-standing Hoover employees in the Welsh valleys who have been told that the retirement money that they worked for decades to build up has had to take yet another cut and that there is nothing they can do about it. They have had to sit and watch as the company and Government take money from what was once a surplus fund and is now in hundreds of millions of pounds of debt, and their well-earned retirement has been taken away from them.

I ask the Minister how his Government can justify this legacy of the short-sighted and irresponsible actions of the 1980s Thatcher Government, which imposed the 1986 Act on hundreds of UK companies’ pension funds such as Hoover’s, thinking only of short-term gain. Will the Government now do what is right by the many hundreds of people, such as Phillip Little, who have seen their pensions hit over and over, and repay them with the money they took from the fund under the Finance Act, so that these hard-working people can have the retirement that they deserve and that they worked for decades to build?

In Labour’s 2017 manifesto, we committed to carrying out an immediate review of current pension surplus tax and sharing arrangements, since many of the people at companies across the UK affected by this, such as Hoover, British Coal and British Steel, do not have another private fund to fall back on. The Government must now follow suit. Will the Minister commit to at least reviewing these arrangements, and to giving justice to the many former Hoover employees in my constituency who have been robbed of the pensions they worked to build and on which, having left the workplace, they now depend?

I congratulate the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) on his speech, and the hon. Member for Strangford (Jim Shannon) on his intervention in this debate. It is a pleasure to serve under your chairmanship, Mr Robertson.

I accept entirely that this is a sensitive and important matter that the House should debate in the context of the long-term viability of defined-benefit schemes—a matter of concern to the House and to our individual constituents up and down the country. In this particular case, we are concerned with the constituents of the hon. Member for Merthyr Tydfil and Rhymney and the members of the Hoover pension scheme, who feel very strongly about this issue. I hope that I will be able to reassure hon. Members that the Pensions Regulator has done everything in its power to achieve the best possible outcome within the current legislative framework.

I will start with defined benefit generally, and make the simple point that the majority of defined-benefit pension schemes in this country are run effectively. We are fortunate to have a robust and flexible system of pension protection in the United Kingdom. The Pensions Regulator, which is based out of Brighton and is obviously independent of Government—although I meet with it on a regular basis—has a range of powers to protect pension schemes and works closely with all involved.

For schemes where the employer goes insolvent, the Pension Protection Fund is there to help to protect the members. Anybody already in receipt of their pension will continue to be paid and other members will receive at least Pension Protection Fund compensation levels. However, we are in the process of reviewing the defined-benefit system; the hon. Gentleman will be aware of the defined benefit White Paper issued a little while ago and the proposals put forward for a future private pensions Act, which we hope to bring forward in this House in due course.

In respect of the Pension Protection Fund itself, I want to ensure that hon. Members fully grasp that the Pensions Regulator has done everything in its power as an independent regulator to achieve the best possible outcome for scheme members. The employer, the Pensions Regulator and the Pension Protection Fund have considered different solutions to address the scheme’s funding deficit. On 31 March 2016, that deficit was approximately £500 million. Given that that funding deficit was putting the solvency of the company and its pension scheme members at risk, the Pensions Regulator intervened.

Turning to the Pensions Regulator’s intervention, on 30 May 2017 it approved a proposal by the 1987 Hoover pension scheme. The approved plan, known as a regulated apportionment arrangement, helped to secure the future for UK employees and gave protection to the pension scheme. The Pensions Regulator agreed to the regulated apportionment arrangement only after ensuring that Hoover had met its very strict criteria. The agreed arrangement between the company and the Pensions Regulator secured a £60 million payment from Hoover into the Pension Protection Fund in May 2019. That lump sum is significantly higher than what it would have received had Hoover fallen into insolvency. In addition, as part of that arrangement the pension scheme would also receive shares representing a 33% stake in Hoover.

That balanced approach addressed the need to protect scheme members’ pensions while preserving jobs in the sector and in the hon. Gentleman’s constituency—a matter that I know he is passionate about. The trustees of the scheme acknowledged that it secured a significantly better outcome for the pension scheme than it would have received through the normal insolvency process, and the best achievable solution for the pension scheme given the circumstances.

Matters proceeded, and I will address the protection for pension scheme members. The Hoover pension scheme left the Pension Protection Fund assessment period and transferred into the Pension Protection Fund itself in May 2019. The hon. Gentleman will be aware that the Pension Protection Fund is effectively an independent lifeboat. It is a fund established to provide a meaningful level of compensation to members of private sector occupational defined-benefit pension schemes who have lost their pension as a result of employer insolvency or impending insolvency.

Crucially, the Pension Protection Fund is funded by a levy on all other defined-benefit schemes. The framework under which the Pension Protection Fund operates means that favouring any one group will place a corresponding burden and risks on other levy payers and Pension Protection Fund members. I accept that the hon. Gentleman sought to persuade me that we should make radical change to the Pension Protection Fund as a whole, but he and I need to agree something: the previous Labour Government, who were in charge between 1997 and 2010, had opportunities to correct many things, and one of the corrections they made was the creation of the Pension Protection Fund.

We must have a very robust discussion that makes it clear that, were the Pension Protection Fund not in existence, the situation for any scheme member facing this situation would be considerably worse. The Pension Protection Fund, set up in 2005, has transformed the landscape for many people who would otherwise have been left desperately vulnerable and considerably impoverished. It pays a guaranteed level of compensation that was not previously available to pension scheme members in similar circumstances.

Pension Protection Fund compensation guarantees 100% protection to members who are over their scheme’s normal pension age at the date of the employer’s insolvency or to members under normal pension age who retired on ill-health grounds. All other scheme members are paid compensation based on 90% of their pension, subject to a cap.

The Pension Protection Fund is largely seen as a success across all Governments, with respect, and has received strong cross-party support. While the hon. Gentleman is clearly right to champion his constituents’ cause, it is right that the House should celebrate the fact that, without the Pension Protection Fund, things would be considerably worse. Setting it up was a success of the last Labour Government, and it has been endorsed and supported by all other Governments since.

I appreciate the Minister’s point about the Pension Protection Fund and how different the situation would have been had it not intervened. However, the central point I was trying to get across was whether there is any opportunity to review the position of surpluses taken under that Finance Act by a previous Conservative Government, maybe not to fully reinstate what the pensioners have lost but to go some way towards defraying some of the difficulties that pensioners now face, in my constituency and beyond.

I will answer that with three points. The first is slightly political but has to be made, given the way that the hon. Gentleman put his case. There was an opportunity between 1997 and 2010 to make such a reform if that Labour Government wished to.

However, perhaps it would be appropriate to explain why we got into this situation. Clearly, this is a tax issue. The hon. Gentleman will understand that I am answering on behalf of the Department for Work and Pensions, but I will endeavour to do my best impersonation of Her Majesty’s Treasury and address this. The Treasury’s view is that the Finance Act 1986 addressed what were then considered to be excessive pension scheme surpluses, as there was an absence of clear rules on how surpluses should be dealt with. Pension schemes with funding in excess of a certain amount could reduce certain surpluses in a number of ways, including by suspending employer or employee contributions, making taxable payments back to the employer, improving member benefits or providing new benefits to members.

It was entirely a matter for the trustees and employers to decide which method of reducing the surplus to use. If, and only if, they chose to make a refund, the employer was liable to tax at 40% of the amount refunded, so as broadly to recover the tax relief previously given. Those laws on pension scheme surpluses were repealed in 2006, with the introduction of a new pensions tax regime. As to whether the Government can commit to reviewing the terms of the Act and possibly returning the money to the schemes, Her Majesty’s Treasury is clear that it is right and fair that everyone, whether individuals or businesses, must pay the tax that is due.

Before 1986, some employers could use surpluses as a way to avoid tax. They could pay contributions into the pension scheme and receive tax relief, then apply for a return of a surplus. There were no provisions for tax repayments on the return of a surplus. The 40% tax on a return of surplus was introduced in 1986 so as to broadly recover the tax relief previously given. It was not mandatory to return the surplus; a company could instead have a contribution holiday or improve member benefits.

To answer the hon. Gentleman’s point, it is not Her Majesty’s Treasury’s present intention to reform or reinstate anything relating to the situation under the Finance Act 1986, as he sought to persuade me to do. However, I will briefly explain the changes to improve scheme funding. The Pensions Regulator can track pension scheme funding and will react appropriately when there is a large funding deficit. The scheme funding measures proposed in our White Paper will ensure that trustees put in place a more robust plan to ensure that the statutory funding objective is achieved. We intend to use new and existing powers to be clearer in legislation about what is an appropriate length for the recovery plan when there is a funding deficit.

We will take steps to require trustees to explain to the Pensions Regulator their funding and investment strategy, how they intend to mitigate risks to the scheme funding position and how they are complying with funding standards in legislation. The changes are intended to support trustees in their decision making and to strengthen the Pension Regulator’s enforcement regime, to protect members, sponsors and the Pension Protection Fund from future shocks or events such as these. The system will retain some flexibility to ensure that sponsoring employers can balance their obligations to the pension schemes with business needs. The reality is that the Pension Protection Fund is a significant organisation with more than £30 billion of assets and responsibility for more than 236,000 pension scheme members, more than half of whom are current pensioners. It is able to cope with these schemes.

However, the hon. Gentleman and the hon. Member for Strangford, who has now left the Chamber, made points in respect of other cases, including British Coal, British Steel, BHS and others. I will return to those before I finish, because while the constituents of the hon. Member for Merthyr Tydfil and Rhymney would like to receive 100% of whatever they thought they were going to receive—no one disputes that—without the changes that successive Governments have brought in, their position would be considerably worse.

The reality of the situations that the hon. Gentleman outlined is that the difficulties that those companies have got into have been addressed, by and large—there have been some tweaks or changes to the way they have been treated, particularly in respect of British Steel—by the Pension Protection Fund stepping in, by way of introducing a levy on the defined-benefit schemes out there and ensuring that a substantial payment is made from a pension that otherwise would have been lost under the old law. That has been addressed by successive Governments. Clearly this is a matter of great import to his constituents, and I thank him for bringing it to the House. I hope I have addressed some of the points raised.

Question put and agreed to.

Sitting suspended.

Imprisonment for Public Protection

[Sir Edward Leigh in the Chair]

I beg to move,

That this House has considered imprisonment for public protection.

It is a pleasure to serve under your chairmanship, Sir Edward. Sentences of imprisonment for public protection are an often overlooked part of our criminal justice system, despite their huge impact on those prisoners continuing to serve them. They were intended to protect the public from serious offenders and ensure that dangerous violent and sexual offenders stayed in custody for as long as they presented a risk to society.

Under the IPP regime, offenders given an IPP sentence were set a minimum term that they had to spend in prison, but unlike with most other sentences, there was no upper limit, meaning that once the minimum tariff had been served, the offender must apply to the Parole Board for release. Only if the Parole Board is satisfied that they are not a danger to the public can someone serving an IPP sentence be released. Release is therefore not automatic, and if the Parole Board is not satisfied that someone serving an IPP sentence has demonstrated that they no longer pose a risk, the prisoner can remain in custody indefinitely.

I have discussed these concerns with colleagues, including the shadow Secretary of State for Justice, my hon. Friend the Member for Leeds East (Richard Burgon), who also realises the gravity of this important issue and how it impacts on so many families. That is why I applied for the matter to be debated by right hon. and hon. Members in Parliament.

The point that the hon. Gentleman has just made is very important. This issue has a big impact on families. I do not think we should lose sight of that as the debate proceeds. The other point is that the number of prisoners who self-harm during these sentences is much higher than the number across the rest of the prison population. Does the hon. Gentleman agree that those two factors should play a part in his thinking?

With great eloquence, the hon. Gentleman has highlighted two of the key reasons why this debate is so important. I concur fully with his views.

In many cases, IPP sentences that had shorter tariffs, of less than two years, have become in effect a life sentence as people have been stuck in limbo, unable to prove that they no longer pose a risk, often for reasons beyond their control. For those IPP-sentenced prisoners, the sentences did not work as intended and instead have become an unfairly punitive aspect of our criminal justice system. I would like to focus my remarks today on those prisoners, as it is those on the shortest tariffs who have experienced the injustice.

Why were IPP sentences abolished in the first place? Although designed to protect the public from serious offenders, IPP sentences were in reality handed down for a far broader range of offences than was intended. They were handed down at the rate of more than 800 a year, moving thousands of people into prison indefinitely. That led to offenders who had committed more minor crimes facing a short tariff but an indefinite sentence.

The Prison Reform Trust published late last year a report that showed that more than half of prisoners still serving an IPP sentence had a tariff of four years or less and 15% had a tariff of less than two years. Custody and imprisonment should be used as a last resort; and indefinite custody, with no fixed end, should be used only where a very serious offence has been committed. I fully appreciate that there are cases in which individuals have committed heinous crimes against humanity and therefore the local communities are extremely concerned about the prisoner’s release. One such case was highlighted to me by the Under-Secretary of State for Exiting the European Union, the hon. Member for Worcester (Mr Walker). He and his predecessor in that seat had both worked with the local community to highlight their very serious concerns about someone who had killed three children and impaled them on railings after murdering them in their home.

However, I am most concerned about the non-serious cases wherein someone is sentenced to a short sentence but ends up being imprisoned for years on end. Where people are safe to be released, we should not be keeping them in custody to serve many multiples of their tariff for the crimes that they have committed. That stands against the principles of natural justice, on which our justice system was founded. The more widespread use of IPP sentences than was intended has also led to a number of instances in which offenders who committed the same offence in the same context were handed sentences such that one offender could be expected to spend a lot longer in prison.

Even the author of IPP sentencing, David Blunkett, acknowledges that this was a flawed policy. Lord Blunkett has noted:

“The consequence of bringing that Act”—

the Criminal Justice Act 2003—

“in has led, in some cases, to an injustice and I regret that”.

In 2012, the Government rightly took the decision to abolish sentences of imprisonment for public protection for offenders, meaning that that option was no longer available to judges. However, although that was the right decision, the issue remains of what to do to address the situation of those who are currently serving an IPP sentence.

My hon. Friend is right to recognise that these sentences have now been abolished. The Parole Board previously aimed to get the IPP prisoner population below 1,500 by 2020, but the latest figures show that the number of people still serving IPP sentences is above 2,400. Given that these sentences have actually been abolished, does my hon. Friend agree that those who are continuing to serve them should be re-sentenced under the rules that exist at the moment?

With great telepathy, I, too, will be referring to the Parole Board and the statistic that my hon. Friend has very ably highlighted. I fully agree with her.

As I said, the issue remains of what to do to address the situation of those currently serving an IPP sentence. That is the issue that the current Government have to grapple with. The problem remains a real one for the prisoners, for their families, for the justice system and for wider society, which needs to have confidence in a justice system that rehabilitates people and is fair and proportionate.

Let us examine the continued use of IPP sentences. On 31 March 2019, as my hon. Friend the Member for Lewisham West and Penge (Ellie Reeves) has highlighted, 2,403 prisoners were still serving an IPP sentence and had yet to be released, despite the abolition of these sentences more than seven years ago. Of those prisoners, nine out of 10 have already served the minimum tariff that was handed down to them by the judge at their trial. A large proportion of those still serving an IPP sentence after surpassing their original tariff were initially sent to prison to serve a short tariff. Of the close to 400 people on an IPP sentence with a tariff of less than two years, more than half have served nine years, or more, beyond their original tariff. That is a travesty.

My hon. Friend the Member for Stretford and Urmston (Kate Green), who cannot be here today, has informed me that a recent parliamentary question that she tabled has revealed that there are currently 46 women on IPP sentences, yet the Ministry of Justice does not know how many of those women have children. Given that that is such a low number, and given that the impact of mothers’ imprisonment on children is well documented, I believe that that is a shocking admission. The Parole Board predicts that unless changes are made to the situation faced by IPP prisoners, there will still be 1,500 people in prison serving an IPP sentence by 2020.

To illustrate the issues faced by people still serving IPP sentences, I shall draw attention to some particularly tragic examples of the effect that the indefinite nature of IPP sentences can have on those people sentenced to them.

Just before my hon. Friend highlights his examples, I will raise the case of my constituent, Wayne Bell, who has had a mental health crisis and is now unable to engage with the parole process. Given that a study a few years ago showed that one in 10 IPP prisoners was seeking psychiatric help in prison, which is double the rate for the normal prison population, does my hon. Friend share my concern that these prisoners can easily get into a downward spiral? They have a mental health crisis and are not able to engage with the parole process, and that makes them more depressed. There is no way out of that downward spiral for them; there is no ability for them to resolve their situation.

My hon. Friend’s excellent point encapsulates the mental health issues and the intertwined nature of what we are discussing. I will elaborate further on the mental health problems faced by prisoners.

In 2009, Tommy Nicol received an IPP sentence with a minimum four-year tariff for stealing a car from a mechanic’s garage and injuring a man’s arm in the process. Once his tariff was completed, the Parole Board refused his request to be released and told him he should access a therapeutic community, in order to address his mental health issues and become safe to be released.

Tommy’s mental health suffered as he was repeatedly denied access to mental health treatment courses. He was moved to prisons that did not even offer those courses, making proving that he had been rehabilitated increasingly difficult. In November 2014, he made a formal complaint saying that IPP sentences were a form of “psychological torture”. Around that time, he also began to self-segregate and went on hunger strike. His behaviour became increasingly erratic as he understandably struggled to deal with the psychological impact of his situation. Tommy tragically took his own life in prison in September 2015.

James Ward was given an IPP sentence in 2006 with a tariff of only one year for setting light to his mattress while in prison serving a fixed sentence for a fight with his father. He ended up serving not one year but 11 years.

Does the hon. Gentleman agree that the case of arsonists is often serious in the IPP sentence structure? Because of the links between arson, sex offending and reckless behaviour, arsonists have been disproportionately affected.

The hon. Lady ably makes the point about arsonists who end up serving a lot longer than they should. It is not fair.

During those 11 years, James Ward regularly self-harmed and his mental health deteriorated significantly. He has since spoken out about the damage that the IPP sentence did to his mental health, telling the “Today” programme:

“Prison is not fit to accommodate people like me with mental health problems. It’s made me worse. How can I change in a place like this? I wake up every morning scared of what the day may hold.”

IPP sentences leave prisoners in limbo, with a lack of access to courses and treatment. Those cases show how much more needs to be done to address the issue faced by those serving IPP sentences. They also highlight a particular issue for IPP-sentenced prisoners, namely being unable to complete the courses that the Parole Board has told them will help to demonstrate that they are safe for release. That is partly because we face an increasingly violent and overcrowded prison system, where there are simply not enough places on development courses and therefore not enough opportunities for short-tariff IPP-sentenced prisoners to demonstrate that they no longer pose a risk.

There are other problems, which are easier to fix. For example, the families of IPP-sentenced prisoners have said that prisoners are prioritised for places on courses based on how close they are to their release date. Because IPP-sentenced prisoners do not have a fixed release date, they fall to the back of the queue and can struggle to ever get on the appropriate courses. I would be grateful if the Minister provided an update on what is being done to address that issue.

IPP sentences have a huge impact on prisoners’ mental health, as they would do on anyone locked up and deprived of their liberty with no end in sight. They create a sense of despair and hopelessness, which can have a significant impact on an individual’s mental health. This is demonstrated by the fact that IPP prisoners are significantly more likely to self-harm than determinate-sentence prisoners and even life-sentence prisoners, which is an amazing statistic. This is borne out by numerous reports, such as those by the Prison Reform Trust, the Sainsbury Centre for Mental Health, the Howard League for Penal Reform and the Institute for Criminal Policy Research at King’s College London.

Her Majesty’s inspectorate of prisons found that IPP prisoners were significantly more likely than life-sentence or determinate-sentence prisoners to have arrived in their current prison with problems, including feeling depressed and suicidal. Mental health issues are already endemic in our prison system, with at least one in three prisoners reported to have mental health issues by Her Majesty’s inspectorate of prisons reports. The real figure is likely to be greater.

Instances of self-harm are already too high, with 55,598 in 2018 alone. We need a comprehensive and fully-funded strategy for the reduction of all forms of violence in prison, including self-harm, and that must include special support for those on IPP sentences. Will the Minister outline what special provision is made to tackle the mental health conditions of IPP prisoners, especially those with shorter tariffs, who have served way beyond their tariff and probably never expected to be in this situation?

Another issue that affects the prisoner’s ability to rehabilitate and turn their life around is recall. When an IPP-sentenced prisoner is released, they are released on licence, with strict licence conditions that must be followed. Breaching those conditions can result in recall to prison. In many cases, that is a correct and appropriate response, but there are cases where technical breaches—for example, missing a probation meeting due to unforeseen illness or travel delays—have resulted in recall to prison. The excessive use of recall to prison for minor breaches of licence has contributed to the number of IPP prisoners remaining in prison staying stubbornly high. Families of those serving IPP sentences have called for a more reasonable approach to recalls to be taken, to ensure that only those breaches that suggest that someone poses a risk should necessitate the deprivation of an individual’s liberty.

Minor breaches of licence conditions are often not crimes in and of themselves, but simple things, such as missing appointments and breaching administrative conditions. The ex-head of the Parole Board told of offenders sent back to prison for turning up drunk at their bail hostel, even though that presented no risk to anybody. Repeated recall to prison while on release on licence also prevents an IPP prisoner from securing housing and holding down a job, both factors that are proven to reduce reoffending rates. Indeed, 936 people on IPP sentences were released by the Parole Board in 2017. In the same year, 543 people on IPPs were recalled. This is a complex and serious issue that will be tackled only through proper co-ordination between the Ministry of Justice, prisons, probation services and the police. Will the Minister outline his Government’s strategy to tackle the issue of recall?

The only way that an IPP prisoner can finally be entirely released from their sentence is to apply to the Parole Board, 10 years after their release from custody, to have their licence ended. Many experts and campaigners have rightly pointed out that this is simply too long and sets people up to fail. Does the Minister have plans to amend this?

Before concluding, I will highlight the impact of IPP sentences on our justice system. Such sentences do not just have a detrimental impact on the mental health and stability of offenders, both while in prison and during release on their extraordinarily long licences; they are detrimental to the efficient running of the prison and parole systems. The Parole Board has historically heard the cases of offenders given longer sentences than those who were subject to IPP sentences, but is now forced to conduct a lengthy risk assessment process for short-tariff offenders on IPP sentences. There is also no doubt that the rapid increase in the number of prisoners on IPPs contributed to prison overcrowding, which continues, despite the abolition of IPP sentences, because many IPP sentence prisoners face difficulties in demonstrating that they are safe to be released.

The prison population has risen significantly since 1994, especially following changes to minimum sentences since 2000. The UK now has the highest imprisonment rate in western Europe, with 141 prisoners per 100,000 of the population. Our prisons are often dangerously overcrowded, with many prisons operating at significantly over their certified capacity. Such overcrowding has a detrimental impact on safety, which has deteriorated considerably under this Government; prisons are substantially more violent than in the past. Overcrowding has also had an impact on the ability of prisons to rehabilitate offenders effectively; Her Majesty’s inspectorate of prisons has repeatedly raised it as an area of concern because it affects the resources available to reduce reoffending.

It is now time for IPP sentences to be resolved. Continued calls for further change—including from former Justice Secretaries, from Her Majesty’s chief inspector of prisons and from the chair of the Parole Board—have focused on the unfairness for prisoners who are still serving IPP sentences and on the challenges that they create for the prison system. Abolishing new IPP sentences was the correct course of action, but there is still more to be done to address the issues that face those who were sent to prison for a short tariff that has effectively turned into a life sentence.

The families of those on IPP sentences are making proposals that may well offer a way forward. For example, Donna—the sister of Tommy Nicol, who I referred to earlier—is now campaigning for reforms to the system that prisoners on IPP sentences face. She has called for the sentences of those who are serving initial tariffs of four years or less, as her brother was, to be converted to fixed sentences. Is the Minister looking at that? There are many suggestions for reforming these outlawed sentences to ensure that public safety and justice is served. Suggestions from the criminal justice reform sector include converting IPP sentences to fixed-length sentences, starting with shorter tariffs, and protecting the public with minimum licence periods.

The Government need to finish the job that they started. Their challenge now is to lay out how they will ensure that this wrong is finally righted. Until it is, it will remain a stain on our justice system.

Order. I am anxious to get everyone in, so could all colleagues keep an eye on the clock and speak for no more than six or seven minutes each, please? I call Victoria Prentis.

Thank you very much, Sir Edward, for calling me first. Owing to unavoidable complications at home, I will have to leave early; I apologise to both Front Benchers that I will not be present for the summing up, but I look forward to reading what they have to say. IPP sentences are an issue on which I have long campaigned and I would not have missed this debate for the world, so I am so grateful to you for allowing me to take part.

It is a great pleasure and honour to follow the excellent speech of the hon. Member for Slough (Mr Dhesi). He has said almost all that needs to be said, so I do not think that colleagues will have any difficulty in keeping to the time limit that you suggest, Sir Edward. He is right, and he fairly said that both sides of the House have been at fault on this difficult issue.

IPP prisoners and their families were the victims of fairly catastrophically bad policy making in the first place. When that was seen and, to my great delight, the system was changed in 2012 by those of us who were then in power—not that I was at the time, directly, but I was a civil servant working in the field—a residue was left because the changes were not made retrospective. As the hon. Gentleman said, that has left the fate of these people as a stain on our system. They are the victims of poor policy making, but also of enormous churn at the Ministry of Justice.

As ever, it is a great pleasure to see my dear friend the prisons Minister in his place. I hope that he will be allowed to stay in post long enough to sort out this matter and several others—including children’s criminal records, about which I will talk to him later. It is very important that we get on quickly with the reforms that my right hon. Friend the Member for Surrey Heath (Michael Gove) posited when he appeared before the Select Committee on Justice in July 2016. In answer to my fairly brusque questions about whether he would

“consider changing the release test or other legislative change”

to help IPP prisoners, he told me that he was “actively considering” it. Unfortunately, the following day he was moved on. That has been the picture of my attempts to get Ministers to engage with the issue over the past four years, so I very much hope that we will hang on to the present Minister long enough for him to do something about it.

The test for the release of IPP prisoners is very high. As Dr Harry Annison of Southampton Law School noted in written evidence to our Committee, IPP sentences fall

“little short of life imprisonment”.

As I said in my intervention earlier, I am particularly concerned about those convicted of arson offences. The Committee heard evidence about a man who was convicted for a minimum of 10 months in 2006 and was not released for 11 years. I also remember from when I was in practice an extraordinary case of an individual who had been convicted for setting fire to a pair of church curtains and was still in prison very many years later; the reasons and lifestyle that had led to the original offence really did not make him a continuing risk to society. The hon. Member for Slough has already spoken, as I am sure other hon. Members will, about the horrific despair of individuals in prison who do not know when they will be released. It is Kafkaesque, and it is not acceptable in our criminal justice system.

IPPs were used far more widely than was intended. They were often given to offenders who committed low-level crimes with very short tariffs of less than two years. They were handed out at an extraordinary rate when they were first introduced. They proved very difficult to understand, they left victims and families uncertain about how and when people would be released, and they have led to real inconsistencies in sentencing. The sentence created its own complexities that were not fully foreseen when it was conceived. The test for release was set at a very high threshold, which has led to real problems with mental health, suicide and self-harm; the hon. Gentleman has already gone into those, so I will not.

There is good news, however: since 2017, there has been a concerted effort by the Prison Service, the probation service and the Parole Board to progress cases. In 2017-18, the Parole Board ordered the release of more than 900 IPP prisoners, including the re-release of some who had been recalled. The hon. Gentleman asked the Minister to go into recall in some detail; that is important across the Prison Service in general, and particularly with this cohort, for which there are real concerns about how the recall system is being used.

There is a great deal more to do. Immediate action could be taken, without legislative change, on treatment programmes. The Parole Board and prison psychologists have gone to enormous lengths to say that there are options other than treatment programmes that demonstrate the case for release, but boards remain very influenced by programmes that offenders have undertaken.

I am concerned generally about treatment programmes and their evaluation. We held up the sex offender treatment programme as a gold standard for many years, and then we got rid of it overnight and brought in new systems because it was proved not to work. I was interested by the response to a recent freedom of information request from Transform Justice, which showed that 95% of accredited programmes have no impact evaluation. I am really worried about the undue weight that boards are placing on programmes that have not been properly evaluated. The lack of provision of such programmes is effectively keeping people in prison without real evidence that it is the right place for them. May we please have urgent action, Minister, on treatment programmes and their evaluation, as well as real direction, so that we do not over-rely on programmes that have not been fully evaluated?

In the “Prison Population 2022” report, which the Justice Committee published in March, and in the Government response, which they very kindly gave us yesterday, there is a great deal of common ground between the Government and the Justice Committee. I am sure that my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), the Chairman of the Justice Committee, will go into them further, but there are very good practical suggestions in the report from the Howard League and from the Parole Board itself on how to deal with IPP prisoners. I encourage the Minister to take all of them on board. However, I have to say that I, along with others on the Justice Committee, would go further. We think that these prisoners represent such a blight on our justice system that legislative change is the only way forward.

I thank my hon. Friend the Member for Slough (Mr Dhesi) for his contribution in opening this debate.

I want to say something at the very beginning that I hope Members will regard as helpful. All those in prison under an IPP sentence are there because at some point they committed a crime and hurt a victim. We should not forget that in this debate, because there are many people in prison for serious offences that have caused a great harm to people in the community. The question we are considering today is: how do we achieve a balance between punishment of those individuals for their offences and providing a helpful pathway to rehabilitation?

When it was introduced originally, the IPP sentence gave a minimum term, but also set out a series of conditions by which the risk that an individual who has committed an offence poses to society has to be assessed, in order for them to reach a standard that would allow them to be released back into the community.

I am glad that the right hon. Gentleman has zoned in on what should be the two central pillars of our justice system. Does he agree that wider society needs to see rehabilitation—the second pillar that he talked about—as one way to help to reduce the risk of reoffending, so that people can have more confidence in the justice system?

Absolutely. The hon. Gentleman—or my hon. Friend, as I will still call him in this case—makes a key point.

The key issue that I want to raise is this. Many IPP prisoners have passed the minimum tariffs—we have heard today the figure of 2,400 prisoners currently serving over-tariff IPP sentences and now, because of where we are in the timeline, many are serving severely over-tariff IPP sentences. There are many individuals for whom we need to find a pathway, to give them clarity and to enable them to reach a conclusion after they have served their minimum term and paid back to society, but we also need clarity about their rehabilitation and ultimate release.

The right hon. Gentleman is speaking with his characteristic eloquence. Kevin Willis, a constituent of mine, has served 13 years in custody, which is the equivalent of a 26-year determinate sentence, after being sentenced to an IPP with a four-year tariff. As the right hon. Gentleman indicated, Kevin Willis committed a serious crime and deserved to go to prison. However, does the right hon. Gentleman agree that this kind of legal limbo, whereby Kevin has no idea when or even if he will be released, is unconscionable? Also, members of the public will find it hard to understand why some people serve only half the sentence that is announced on the steps of a court, while others seem to serve many multiples of their sentence. That is another problem that affects faith in the justice system.

I agree with the hon. Gentleman, in the sense that we have to assess the risk that an individual potentially presents to society. We have a minimum term; people have passed that minimum term; we now have an element of indeterminate sentencing, whereby risk is assessed and release happens when that risk is deemed to be sufficiently low for the prisoner to be released back into society.

I want to know from the Minister what assessment is being made of the current potential risk from the 2,400 prisoners serving IPP sentences, including 43 women. The reason they are still in prison is either that they have been moved from prison to prison and not been tracked effectively, or the courses to help with their rehabilitation have not been made available, or they pose a risk because of the deterioration of their mental health while in prison or because of other issues, as my hon. Friend the Member for Slough said. What assessment has the Minister made of those prisoners, and how can he prove that there are pathways for each of those individuals? That is the key thing that I want to know from the Minister in this debate.

It seems to me that there are three clear pathways left for individuals with IPP sentences. Either we have a rehabilitation pathway that says, “These individuals need to complete these courses in order to reach a stage where the Parole Board can assess them to be a low risk to society and therefore eligible for release,” or, if there is not a rehabilitation pathway, we might need to consider resentencing, so that there is a definitive end-date to their sentences, or the crime is such that, whatever current pathways are operational through rehabilitation, the end-date, which might be some years hence, needs to be reassessed and might take into account time already served. What we need for each of those 2,400 individuals is clarity about what their sentences will ultimately mean.

In the Justice Committee, we produced a report that indicates that we want to see that clarity, and we have said that we would like to see legislative solutions for both release and recall of indeterminate-sentence prisoners, to ensure sentencing certainty on this issue. Helpfully, the Minister of State, the hon. and learned Member for South Swindon (Robert Buckland), has this week published his response to our report, as has been mentioned. I want to complete my brief remarks by asking a couple of questions about the Government response.

In their response, the Government have said:

“We are committed to providing long-term prisoners with opportunities for rehabilitation, so they can demonstrate they can be released safely back into the community and we welcome the Committee’s acknowledgement of our efforts to improve the progression prospects of IPP prisoners”.

How many assessments have been made of those prisoners and what is the pathway for them? The Minister also said in his response that the Government

“are continuing to prioritise post-tariff prisoners in accessing rehabilitative interventions, including Psychology Services-led reviews, and enhanced case management for those prisoners with a complex set of risks and needs. We have also developed Progression Regimes at four prisons across the country”.

How many prisoners currently on that list of 2,400 does that cover? The Minister has also said that the Government are

“progressing indeterminate prisoners struggling to achieve release via the usual routes.”

With all the things that the Minister says he is doing in response to the Justice Committee’s report, at what date does he estimate that the current number of 2,400 over-tariff IPP prisoners will be in a position to be forwarded to the Parole Board for assessment? [Interruption.]

The Minister looks quizzical, but that is a question that he needs to answer, because if he has an end-date, he needs a programme to get to it. He needs to assess those 2,400 individuals, see what courses they need to undertake, establish the elements of risk in those cases and determine whether those 2,400 individuals will reach a threshold for release. We accepted in our report that there are those within that 2,400 who might never be released because they may still pose a threat to society. Nevertheless, that is still a time-pathway conclusion that the Minister and his Department can reach on an individual.

My simple plea is this: when and how? If resentencing is required to provide clarity, when will that happen? Ultimately, the key thing that I want from this debate is clarity, and that might mean a long time further in prison or a course to help to release somebody in due course, but clarity is needed.

Finally, I go back to where I started. We should not forget the victim of the original crime, and there should be some discussion and some conclusion as part of these pathways about victim management for those against whom the original crimes were committed.

As always, Sir Edward, it is a pleasure to see you in the Chair. I congratulate the hon. Member for Slough (Mr Dhesi) on securing an important debate on an important subject.

I am delighted to see the Minister in his place. He has had a long and distinguished career at the criminal Bar, so he will know, as well as any of us who have seen this type of sentencing in practice, that this is an unconscionable situation, which is the result of a policy in the past that was well-intended but, frankly, an error. That error was corrected, but not corrected retrospectively, hence the decision reached by the High Court and the Supreme Court that they could not interfere with sentences that, at the time they were issued, had been lawfully given, as the then Lord Chief Justice, Lord Thomas, said. However, that does not remove the political and moral conundrum that faces us.

The right hon. Member for Delyn (David Hanson), a fellow member of the Select Committee, very fairly points out, as we accept in our Select Committee report, “Prison population 2022”, that there will indeed be a number—perhaps a significant number, but I suspect not a majority—of IPP prisoners who are unlikely to be safe to be released in any significant period of time and perhaps never. I suspect they are a minority, but there will be some. Nobody has an issue with that, but certainty is important for them and for the victims of their grave crimes, so that they know that that will be the case.

In those circumstances, the defendants probably ought not to have been sentenced to an IPP in the first place, but to a life sentence. If that is the case, the correct thing is to put that right rather than continue with the fiction that they are on an IPP with a tariff that they have long since superseded.

My hon. Friend is absolutely right. His experience at the criminal Bar leads him to the same conclusion as it leads me. Given that the situation is unacceptable for the reasons that have been highlighted by the right hon. Member for Delyn, and highlight in detailed by my hon. Friend the Member for Banbury (Victoria Prentis) and fellow Select Committee member, it is unacceptable that we should leave a situation in which some people are in limbo.

One such case was illustrated in our Select Committee report in evidence from the sister of an IPP prisoner who died after a self-harm incident in prison. That individual

“often found himself in prisons that did not offer the specific type of rehabilitation he needed with no support or guidance on how to move to a prison that offered them. If there ever was a ray of hope with regards to this it was often lost owing to the lack of feedback on progress, the resource being changed or even closed down.”

That leads me to conclude, first, that we need to ensure that the prison regime offers proper rehabilitative and therapeutic offender management courses to those in a position to benefit from them. That requires a steady and stable regime within the prisons, which is not yet always the case in many institutions. Secondly, it implies a greater degree of monitoring of the specific needs of IPP prisoners to make sure that they are moved to establishments where courses are available. Thirdly, it means moving away from the current practice whereby IPP prisoners are very often not allowed to seek transfer to open institutions, which gives the Parole Board the difficulty of not having been able to test their behaviour and therefore the risk of reoffending in open conditions. The board has to take the difficult risk, in public perception terms, of either keeping those prisoners locked up perhaps needlessly or releasing them immediately without their having experienced open conditions. All that needs to be addressed.

The Parole Board gave evidence to us that certain mechanisms currently available to it could be made more use of. I urge the Minister to speak urgently to the chair of the Parole Board about speeding up, for example, the ability to prevent needless recall for technical reasons by, as has been pointed out, suspending the period of supervision after four years of good behaviour on licence—a specific and sensible proposal—and removing the cancellation of the licence after 10 years on licence. In many cases, that would be significantly more than the minimum term that they were sentenced to by quite a multiple. Those are sensible things that could be done.

Also, we have to grasp the nettle that, as Lord Thomas of Cwmgiedd rightly said, Parliament needs to grasp. We must either make resources available so that proper rehabilitation can take place or change the test for release. That would certainly need to be consulted upon, but it is something we need to set out because it has been very highly set at the moment. And/or we could change the statutory provision, as my hon. Friend the Member for Cheltenham (Alex Chalk) said, so that people can be re-sentenced under the current sentencing practice and procedures to a determinate sentence. In the worst cases, that will no doubt be life, or sometimes significant and at other times less significant determinate sentences, but the IPP prisoners, their families and the victims of the offenders will know precisely what the regime is and what the rules are that relate to the release.

That ought not to be too difficult to achieve. I cannot think for one moment that there would be opposition to that in any quarter of this House, were the Government to seek to find a legislative opportunity to introduce that. I earnestly urge my hon. and learned Friend the Minister—I know he is a reformer at heart and recognises the need to move these matters on—to make the case as strongly as he can within Government to find the time to take the fairly modest steps that would rectify an injustice that is a needless blot upon our system.

I thank the hon. Member for Slough (Mr Dhesi) for securing this debate. I also thank the other Members who have made contributions.

I can fully understand the concerns that have been expressed today, and I am someone who firmly believes in the punishment fitting the crime. I have long had an issue with the release of sexual predators back into society. Indeed, there was recently an issue with an offender who had a long history of sexual offences in my constituency, who was repeatedly inappropriate with young children. The community carried out a citizen’s arrest when he was caught in the midst of a lewd act. As a consequence of running away from a person walking by who witnessed the act, the perpetrator was injured. My point is that, had he not been released, it would have been better for the offender, who truly seems unable to keep himself under control, and most certainly better for the young girls who have had their innocence stolen and are unable to undo or unsee the acts that he carried out in front of them. I want to get that story in at the beginning, because I agree with the Members who said that the punishment must fit the crime. I am clearly of that ilk as well.

At the same time, we recognise the pressures on the prison and parole systems. Before they can be released, prisoners serving indefinite sentences have to demonstrate that they have addressed their offending behaviour and are no longer a risk to society.

On 21 June 2011, the day the Legal Aid, Sentencing and Punishment of Offenders Bill was published, the then Prime Minister, David Cameron, gave a press conference and said,

“we’re going to review the existing system urgently with a view to replacing it with an alternative that is clear, tough and better understood by the public.”

So there have been lots of requests for change. On 20 April 2016, the then Justice Secretary, the right hon. Member for Surrey Heath (Michael Gove), wrote to the Chair of the Justice Committee about prison reform. He said that although he had no current plans to change the statutory test for releasing prisoners after completion of the tariff, there were initiatives to help IPP prisoners to make progress towards release. There has therefore been much talk about this during the time that I have been in this House, and I suspect long before that as well.

I can fully understand the reason why such sentences were given, but I also understand that our duty of care to the prisoner means that we need to have rehabilitation in place to ensure that they can get back into the community if they are fit to do so. I am possibly from a generation that believes that there are consequences for actions, and the consequence of a sexual offence should mean curtailment of freedom, especially for those who seem likely to reoffend. We need to remember that it is not about a number on a page or a statistic, but about children: little boys and girls whose innocence has been stolen and who will battle with that loss all of their lives. It is not simply a matter of removing that person from their lives, but of learning to deal with the trauma and to trust again. Although we can never mete out enough punishment for them to get their lives back, we can prevent other children from having to go through what they went through.

When an offender commits a sexual offence, he or she needs to know that their actions will result in their removal from society until it is deemed safe for them to return to society, and even then it will not be without changes. No one can commit such offences and return to their life; it is irrevocably changed. To be honest, I feel little or no sympathy for them. My sympathy is reserved for the victims. We must be able to ensure that those who are likely to offend or present a danger are kept away from the vulnerable and from communities.

Do we need to change the system? Yes, we do. Do we need to make it more effective? Undoubtedly. Do we need to provide help and assistance to those who struggle with urge and impulse control? Definitely. Do we need to have a form of rehabilitation that truly prepares the inmate for the real world? Certainly. Are the vulnerable in the community the ones whom we must serve in any decision to release an IPP offender? Absolutely. There must be a bottom line in any change. I am sure that the Minister who will respond to the debate will consider that, when making any suggestions for change.

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Slough (Mr Dhesi) on securing the debate and making a comprehensive, detailed and powerful argument about the injustices of what are supposedly short-term sentences.

There has been much agreement in the debate, so we await solid answers from the Government about the action they will take on this important issue. As my hon. Friend the Member for Lewisham West and Penge (Ellie Reeves) pointed out, there were 2,403 prisoners still serving IPP sentences, yet to be released, as of March this year, and 90% of them have already served the minimum tariff handed down by the judge at their trial.

We cannot say that enough has been done in the seven years since the change. As the Chair of the Justice Committee, the hon. Member for Bromley and Chislehurst (Robert Neill), put it, the policy has been corrected, but not retrospectively. That means that thousands of people are waiting in limbo, as their ability to imagine a world outside prison, and their chance of rebuilding their lives without reoffending, deteriorate. I was pleased that my right hon. Friend the Member for Delyn (David Hanson) made a point about balance. We should remember that the people in question have, to use his words, committed a crime and hurt a victim. The balance to be struck is between punishment for the offence and providing a pathway to rehabilitation.

The argument against IPP sentencing is clear, and the Government do not seem to disagree with us on that simple question of justice: indefinite custody with no fixed end should be used only for the most serious offences, where the public would be genuinely at risk. We have heard many examples where that was not really the case, and where relatively minor crimes are still being punished disproportionately with what some feel amounts to a life sentence. The Howard League for Penal Reform has said that

“this cohort of prisoners had particular difficulties with anxiety as they saw others who had been convicted of similar crimes after 2008 enter and leave prison while they were detained substantially beyond their tariff date.”

Where people are safe to be released, we should quite clearly not be keeping them in custody to serve their sentence many times over. It is against all the most basic principles of fairness and justice, and the punishment must fit the crime—a point that the hon. Member for Strangford (Jim Shannon) stressed in his speech.

I agree with every word that the hon. Lady is saying. The punishment must fit the crime, but does she agree that the real concern is that the punishments are not what judges handed down in court, when they had all the facts before them, but are increasingly the preserve of the people, within custody, who apply often completely extraneous considerations?

That point is well made and I thank the hon. Gentleman.

The impact on those serving IPP sentences and their families is heartbreaking. We have heard of people who have self-harmed and died by suicide in prison. The shocking fact, mentioned by many of those who spoke, that IPP prisoners are significantly more likely to self-harm than both determinate-sentence prisoners and life-sentence prisoners, goes to show the urgency with which the Government need to tackle the issue. As the hon. Member for Banbury (Victoria Prentis) made clear, IPP prisoners are victims of pretty catastrophic policy making.

A study published for the Griffins Society in 2019 examined the impact on women serving IPP sentences. Six of the nine women interviewed had tried to commit suicide multiple times during the sentence, and five of the nine had had their children taken into care. Those are significant risks for the 43 women still serving IPP sentences today, and their innocent families. I would love to know what action the Government have taken on the matter. What have they done, for instance, in response to the family of Tommy Nicol who, as we have heard, died by suicide while serving an IPP sentence? His sister Donna has called for the sentences of those serving initial tariffs of four years or less to be converted to fixed sentences. It seems that that could be a common-sense way to tackle the ongoing injustice of IPP prisoners. What is the Government’s position on that?

We can talk about the flaws in the original policy of IPP itself. We all agree on that. However, a major reason why many prisoners who have served their time are still waiting in limbo is the chronic mismanagement of the justice system that the Government have presided over. That mismanagement affects everyone involved in our prison system—not just prisoners with IPP sentences.

We have heard about prisoners who have been asked to demonstrate commitment to therapy for mental health issues, to prove that they are fit for release, but who have no access to such therapy in the prison they are in. That is in part due to the sheer numbers of people on waiting lists for those much-needed courses in our overcrowded prisons. I have urged the Government before, and I will urge them again, to take action on the deficit in mental health provision in all parts of society. However, one in three prisoners has mental health issues and the people involved are often more of a risk to society, so surely prison is one area where particular attention is given to mental health provision. Can the Minister tell me what the Government are doing to make mental health a priority in our prisons?

There are other reasons for the situation, specific to IPP prisoners, that would be far easier to fix. We have heard in the debate about prisoners being given access to important courses of the kind I mentioned based on how close they are to their release date, which in the case of an IPP prisoner is indefinite. If we are serious about rehabilitation, those prisoners will need more support on their release from prison. When people emerge from prison to a housing market in crisis, low-paid and insecure work as the only option, and a safety net that has been slashed by austerity over the past decade of Tory rule, it is unsurprising that reoffending rates are so abysmal.

Although the important issue of IPP sentences is, quite rightly, the focus of today’s discussion, we are speaking about it in the context of a wider justice system that is falling apart. Many prisons are operating at significantly over their certified capacity. That overcrowding is just one factor that has led to prisons becoming substantially more violent in recent years.

The deficit in the provision of courses that make recidivism less likely, including training for work and mental health therapy, is in part due to the impossible number of prisoners on the waiting list in any given prison. Those problems are especially acute for the IPP prisoners who are the subject of the debate, but they affect all types of prisoners and, with them, our broader social fabric. That is what will really put public safety at risk—not the release of prisoners who may well be ready to reintegrate into society but who are not given a chance to prove it. What are the Government doing about overcrowding, and how many more Tommy Nicols are we likely to lose while we wait for them to take action?

It is a pleasure to serve under your chairmanship, Sir Edward; as a former member of the legal profession, you will have a particular interest in this important issue. I congratulate the hon. Member for Slough (Mr Dhesi) on securing the debate. I know that he has long had an interest in such issues, and I have debated them with him before in my former capacity as a Law Officer. It is a pleasure now to be able to address the hon. Gentleman and other right hon. and hon. Members as Minister of State for Justice.

We can all agree that the sentence of imprisonment for public protection has long been a source of great concern. I well remember the introduction of that type of sentence, pursuant to the Criminal Justice Act 2003. The provision came into force in 2005, and initially it was used quite often.

The sentence was applicable to and used for a range of offences, including serious assault, threats to kill, arson and a range of other offences that we have heard about today; those are, of course, serious, but I do not think that the courts at the time envisaged what the full consequences would be. Indeed, there is a Court of Appeal authority, from the case of Lang, which, importantly, limited the ways in which IPP sentences could be used. It had an immediate effect on the range of uses of the sentence. There was legislative change in 2008 after another Court of Appeal case in which serious concerns were raised about the system’s ability to cope with the relevant cohort of prisoners. Quite rightly, in 2012 the sentence was abolished by the Government under the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

The IPP population consisted of many dangerous offenders who often had committed serious violent or sexual offences. At the time there was evidence before the courts of troubling escalations of behaviour, prior to the offending that led to an IPP sentence. The policy that underlay the imposition of that regime was twofold—first, the punishment of offenders, but also a specific public protection function was part of the underlying policy introduced by the Labour Government, who for the first time enjoined sentencers to consider future risk. That was unprecedented: the issue had not been approached in such a way, and it introduced a clearly delineated function that was to be exercised in the form of a determination of dangerousness. Judges were asked to make a decision based on the information and evidence before them—either a pre-sentence report, a psychiatric assessment, or the serious nature of the offence itself—and determine whether an offender was dangerous enough to merit an IPP.

That was the law and policy at the time. We rightly now look back on that with concern and the wisdom of 15 years’ experience, and realise that it has led to some of the cases we have heard about today, and many other cases that we have dealt with in our constituency casework. That was the reality of the situation facing the courts then, and although I hear the view expressed by many right hon. and hon. Members about the possibility of changing the law to effectively re-sentence those offenders, we must take some care. It could be done—there is no immutable bar to passing legislation that would have a retrospective effect, but there is a sensitivity in cutting across the original sentence and the finding of the court. It will be difficult for a fresh sentencer to put themselves entirely in the position of the sentencing judge at the time of the offence, which is why I hesitate before accepting the strong views put forward by hon. Members.

The Minister makes an entirely fair point, but he began by acknowledging that there are people in custody who have served time far beyond what the original sentencing judge anticipated. My constituent has served 13 years after an IPP with a four-year tariff. I recognise the difficulties with re-sentencing, but should we not be concerned when people are in custody for far longer than the original sentencing judge had in mind?

My hon. Friend has considerable experience of criminal practice, and he has dealt with many cases of great seriousness. He is right to draw to my attention the specific case of his constituent. We can deal with this problem in other ways, and I will outline those to the House as I develop my remarks. Indeed, I hope specifically to answer the queries that have properly been raised by right hon. and hon. Members.

May I supplement the intervention from my hon. Friend the Member for Cheltenham (Alex Chalk)? The Minister refers to the difficulties of putting oneself in the position of the sentencing judge, but no one is likely to have been better placed to understand those difficulties than the former Lord Chief Justice, when he made his observations in the course of a judgment in the Court of Appeal. We know that there are circumstances—for example, when a sentence is reviewed for other reasons—when the court will, for reasons of good public policy, embark on that difficult exercise. Although this issue must be borne in mind, there is precedent for demonstrating that it is not an insuperable obstacle.

I agree that in the appellant procedure there will often be that check and balance, but this is slightly different. This would be a change in the law and legal framework to alter the position from the one that applied when the offender was sentenced, to the position now. Whether we like it or not that is a departure, and we must be careful to avoid setting inadvertent precedents.

We must be able fully to reflect on the assessment of risk that was made by the learned judge at the time of sentencing. In other words, how does a court properly assess the length of a determinate sentence—that, presumably, is the aim of right hon. and hon. Members—and decide whether or not to take the further step of imposing a life sentence, which might be appropriate in some very serious cases? I do not pretend that these issues are easy, but neither is it a matter that the Government should do nothing about. Other measures we are taking are already yielding significant results, not just in reducing the number of prisoners held under this regime, but by ensuring that more eligible prisoners can be considered as quickly as possible.

My hon. Friend the Member for Bromley and Chislehurst (Robert Neill), Chair of the Justice Committee, mentioned the remarks of the then Lord Chief Justice, Lord Thomas of Cwmgiedd, who spoke not just about changing the statutory provision, but about changing the test for release, which is important. I think he would concede that the test for the release of prisoners held under this sort of regime must be as consistent as possible, bearing in mind the different classes of prisoners who are held in custody either on minimum terms or subject to parole.

We must take great care not to create too many different tests that could mean that one group of prisoners could be treated in a different or more favourable way than another group. I do not say that the argument has no merit, but there are difficulties in creating potential inconsistencies. It is beholden on me, both as a lawyer and now in this position of great responsibility, to ensure that the unforeseen consequences that occurred with this policy making do not repeat themselves thanks to any change we may make.

Let me develop the point about the ways we can best support prisoners to show that they can safely be released—that is the solution that stares us in the face regarding so many people in that position. As the hon. Member for Ashfield (Gloria De Piero) laid out well, ensuring public protection from violent and sexual crime must be paramount, and our continuing efforts to rehabilitate prisoners subject to this regime are bearing fruit. We have seen a dramatic fall in the IPP prison population over the past years, and the figures cited by the hon. Member for Lewisham West and Penge (Ellie Reeves), and others, are correct. It is a dramatic fall, although I accept that there is still a significant cohort, and we must also not forget that a number of IPP prisoners have been recalled—I will come to that in a moment. However, progress is being made in the right direction.

In January 2016, more than three years ago, a joint HM Prison and Probation Service and Parole Board action plan was drawn up to deal with IPPs. Initially it was primarily focused on improving the efficiency of the parole process, because at that time there was a significant backlog in listing oral hearings for IPP and life-sentence prisoners. As a result of receiving additional resources and changing some of its processes, the Parole Board and the public protection casework section of the Ministry of Justice made progress, and their combined effect was to eliminate that backlog. Simply having a more efficient system resulted in a significant improvement to the pace with which IPP prisoners were released. Following those improvements, the plan was expanded to include a greater focus on those prisoners who, even with a much more efficient parole system, needed additional support to reduce their own risk and secure a release decision from the board.

What was done? A central case file review, by senior psychologists, of IPP prisoners who had not made the anticipated progress achieved considerable success. Out of 1,365 completed reviews, 233 prisoners in these most challenging cases achieved release, with a further 401 achieving a progressive move to open conditions. We have put in place enhanced case management for the most complex cases, so that a multidisciplinary team can work together to remove barriers to progression.

The joint IPP action plan has also overseen further improvements to the process and, perhaps most significantly, we have opened three new progression regimes, building on the success and the outstanding reputation of the first such regime, which was established at Warren Hill. Those sites operate a staged regime of increasing freedom and responsibility, allowing evidence to build on offenders’ ability to manage their own risks. The rate of release from a progression regime is higher than the average release rate across all Parole Board hearings, which is something that, I think, all right hon. and hon. Members will welcome.

As comprehensive as the plan and the opportunities it provides to IPP prisoners is, the decision actively to engage with efforts that promote rehabilitation, and so demonstrate that there can be safe release back into the community, must ultimately be for each individual prisoner. In my view, that is why Her Majesty’s Prison and Probation Service change programme, in delivering a new offender management model, is fundamental, not only for IPP prisoners but for all offenders. With increased staffing, and the introduction of the key worker role in all prisons, staff will be better equipped, and given more time, to work with individuals who may not be engaging in the way they need to do to reduce their risk.

We are aware that some prisoners may well have become demoralised, with no fixed date of release and the prospect of a further parole hearing currently not holding much hope for them. Here, the key worker will need to get alongside the prisoner and build hope from the foundation of a strong relationship, encouraging them to grasp the opportunities that are available.

It is not unreasonable to ask at what stage that process will be completed for prisoners currently serving IPP sentences.

The right hon. Gentleman asks that question again, and I take it fairly and squarely. The answer must be that it will be on a case-by-case basis, because each prisoner has an individual story and set of needs, and that does not merit a one-size-fits-all approach. Frankly, the cohort we are now dealing with will probably be the tougher end of the spectrum. I think that the right hon. Gentleman conceded quite properly that there will be a cohort of IPP prisoners who may never be released because of the seriousness of the offences and the risk they still pose—I know he accepts that. Therefore, I cannot give him a figure or a timescale, but I can say that the work that is going on has shown a vast increase in the pace with which we have achieved release and resolution. The model we are now adopting will, I believe, lead to even greater engagement.

As the months go by, the right hon. Gentleman can, of course, hold me to account, and if there is no progress he will rightly ask me the questions and I, independently, will ask civil servants why the initial progress has not been maintained. As a member of the Justice Committee, he will hold me to account for that.

I want to deal with more of the figures we were looking at. We have rightly heard about the overall unreleased IPP population. About 200 of that cohort of 2,400 have yet to serve their minimum tariff. As I said, we have made progress in reducing that population. In 2017-18, the Parole Board progressed to open conditions or released about three out of every four IPP prisoners who appeared before it.

As I was saying, the cohort becomes increasingly challenging, which will require increasingly intensive rehabilitation. Rehabilitating, and assessing the risk presented by, these prisoners, many of whom, sadly, have committed serious sexual offences against children, is particularly challenging. The hon. Member for Strangford (Jim Shannon) opened his remarks by referring to that sort of horrendous offence and the need for public protection. It should be acknowledged that some IPP prisoners may never be released because the risk they pose is just too great for safe management in the community.

We are working to reduce the incidence of self-harm among IPP prisoners as part of our prison safety programme and here, again, the key worker will perform a vital role. Additionally, Her Majesty’s Prison and Probation Service is improving the process for people at risk of suicide or self-harm. We have improved prevention training for nearly 25,000 prison staff and have refreshed our partnership with Samaritans for three years, with £1.5 million in funding to support the excellent listeners scheme, through which prisoners are trained to provide support to their fellow prisoners—peer-to-peer support that we all know works in so many settings.

Working to address broader mental health issues in the IPP population remains important. Since last April, we have a new national partnership agreement for prison health. Mental health services are available in all prisons. Turning for a moment to the issue of women IPP prisoners, I am glad to say that they have a dedicated senior psychologist providing a specific progression pathway, and support from a multidisciplinary team to deal with some of the mental health challenges they face.

The commissioning of mental health services by NHS partners is based on a local assessment of health needs, and the services are provided to prisoners on the basis of individual need, which, when we think about it, has to be right. The one-size-fits-all approach does not work, as we know, when it comes to mental health. Independent professionally trained clinicians carry out assessments, and no one is refused access where there is an assessed need. We are well aware that many of those serving IPP sentences experience mental health difficulties, and part of the action plan aims to ensure access to appropriate treatment. An example that I mentioned earlier is the case file reviews carried out by senior psychologists. Alongside those who have been released or moved to open conditions, 54 of those reviewed have been transferred to secure hospitals, where they can receive the best treatment for their needs.

The issue of recall has properly been raised. With regard to the test of recall, it is important to reiterate that it is stringent when it comes to IPP offenders. They can be recalled only when their behaviour and the nature of the licence breach indicate a causal link to their original offending and that the public are at risk of further serious, violent or sexual offending. That is a different, and more stringent, test for recall than that which exists elsewhere in the system.

Work is being done to ensure that recall is properly focused only where it is necessary to protect the public, and efforts are being made to keep offenders on licence in the community wherever possible. Those efforts include the creation of new guidance for probation officers on licence variations of alternatives to recall, and on best practice in the management of offenders on licence, to improve their compliance and prevent the risk from escalating.

A new power to release IPP prisoners on the papers is being used for those on recall. The Parole Board has introduced a quicker, 48-hour turnaround time to consider licence variation requests from probation, to support continued management on licence in the community. We are investigating the rise in the number of IPP prisoners on recall, to see how that rate can safely be reduced and, citing the hon. Member for Ashfield, to get the balance right between the need to protect the public and the need to rehabilitate offenders.

A number of cases were raised with me. I agree that that of Wayne Bell is concerning and I understand that he is now receiving treatment for his mental health issues in an appropriate setting, which is welcome. The troubling case of Tommy Nicol was properly raised. My predecessor, my right hon. Friend the Member for Penrith and The Border (Rory Stewart), met with Donna Mooney, Mr Nicol’s sister, earlier this year. We remain in contact with her at an official and, I very much hope—although I am a new Minister—a ministerial level. We have another meeting with her planned for the autumn. It is a particularly tragic case, but I assure right hon. and hon. Members that we will continue to work with her to address the concerns that she raises with such dignity and clarity.

My hon. Friend the Member for Banbury (Victoria Prentis), who sadly has been called away, asked about the work led by the University of Southampton. We are very much aware of the work of Professor Harry Annison, who works in partnership with the Prison Reform Trust and has already given us an important insight into the impact on families of their loved ones serving IPP sentences. I am looking forward to seeing the conclusions of the next stage of his work, which is currently being supported by IPP and family leads from Her Majesty’s Prison and Probation Service. With regard to the entire IPP population and the action plan, although I am not able specifically to indicate the number currently subject to that action plan, I assure the House that it is having a wide-ranging effect and will continue to be implemented.

I have lived with the IPP regime for much of my professional and political life. I am profoundly grateful to the hon. Member for Slough for having raised this issue today, allowing us to debate it in a calm and considered way that reflects the genuine concerns of the families of people who are subject to that regime, but also understands the enduring and important function that the justice system plays in protecting the public from serious and violent offences. I believe that the best approach is for us to continue our successful efforts to help those offenders rehabilitate, and redouble those efforts whenever necessary and whenever an offender wishes to engage. That will provide the best chance for those prisoners to become once again law-abiding members of the very communities that we are seeking to protect.

I thank the right hon. and hon. Members who have taken time to engage in this important debate. I think you would agree, Sir Edward, that there has been consensus and agreement on so many issues, between the shadow Minister, my good friend the hon. Member for Ashfield (Gloria De Piero), members of Select Committees including the Select Committee on Justice, and that Committee’s Chair, the hon. Member for Bromley and Chislehurst (Robert Neill).

However, I fear that the Minister has responded with a great deal of hesitation and caution, which does not befit the urgency of the action that is required. Although we should not forget the victim, the punishment must fit the crime. We cannot ignore the glaring official statistics on excessive sentences, the mental health problems of prisoners, or the need for a rehabilitation pathway. We cannot leave people in limbo. Sentences need to be determinate, not indefinite. Although we have corrected the policy, we have not done so retrospectively, and the current situation—as other right hon. and hon. Members have pointed out—is simply unconscionable and unacceptable. That is why I urge the Minister to take urgent action to resolve this unsatisfactory situation.

Question put and agreed to.

Resolved,

That this House has considered imprisonment for public protection.

Sitting suspended.

Cambridgeshire and Peterborough CCG: Funding Pressures

[Mr Philip Hollobone in the Chair]

I beg to move,

That this House has considered Cambridgeshire and Peterborough CCG funding pressures.

I start by thanking the Backbench Business Committee for granting me this short debate and you, Mr Hollobone, for chairing it. I also thank the Minister for his time.

I represent South Cambridgeshire, which is a largely rural constituency, although it also contains part of Cambridge, which is the fastest growing city in the UK: it grew on average by 7% every single year from 2010 to 2015, and since then has continued growing beyond the national average. There is no doubt that the economy, which is spun out of Cambridge University, is world class. It is equally no surprise, therefore, that the Government are keen to connect us with Oxford, another world-leading, rapidly growing city. Beyond the exceptional levels of growth that we are already experiencing, the Oxford-to-Cambridge expressway and rail line will create a further 1 million homes, so how can it be that the health funding allocated to our clinical commissioning group is based on an assumption that we are growing more slowly than the rest of the UK?

The NHS funding formula has determined that our population is growing at 0.1% below the England average, when in reality growth across the whole county has been 0.6% above the England average over the past four years. That difference matters. In population terms, the Office for National Statistics, from which the NHS draws its calculations, predicts that our population will be 988,000 by 2021, while our known and planned housing growth means our population will in fact be 1,022,000. That is known housing growth, before we even consider the additional housing that will come from the Oxford-to-Cambridge project.

I must tell the Minister that that is not all. The money we receive per head of population is also significantly lower than it should be. In fact, all our neighbouring CCGs are better funded than we are. In Cambridgeshire and Peterborough, we receive £1,125 per capita, as compared with £1,244 in Bedfordshire, £1,288 in West Suffolk and a staggering £1,497 in Norfolk. How does the Minister consider that to be fair, when we have one of the greatest and fastest growing ageing populations and severe areas of deprivation in Fenland and some of the Cambridge city wards? Those issues of unfair per capita funding and incorrect growth forecasting have the compound effect of making us the third-lowest funded CCG in the country.

On top of that, we have been given a £55-million savings target for this year alone, which amounts to 4.5% of our entire budget. We have an allocation uplift of 5.67%, or £66.7 million, but we are already committed to nationally mandated costs of £70 million, so the numbers just do not add up. In simple terms, despite our growth, we have less money to fund health services for the people of Cambridgeshire and Peterborough in 2019-20 than we did in 2018-19, and that is set to get worse.

The hon. Lady is making a very important speech. I would like to underline that final fact. It feels very much like the situation with our schools, where the Government tell us that we have more money, but teachers and headteachers tell us that we do not. I would like to underline her crucial point: we have less money to fund health services in 2019-20 than in 2018-19. I hope the Minister will be able to explain why.

The hon. Gentleman, who is my neighbour, is absolutely right. Everyone knows that Cambridge and the surrounding region are growing, yet somehow we are expected to manage on less and less money every year.

Let us bring some colour and real life to the situation. The provision of in vitro fertilisation, of any number of cycles, is totally under question. Hearing aids for those with moderate hearing loss, and community diagnostics, such as ultrasound services, might go, as might vasectomies. The CCG has to reduce its spend on services outside of hospitals by £33 million this year. That means, speaking plainly, significant cuts to community care—everything we are trying to do to stop people from being admitted into hospital, which we know is the most expensive form of care. Every single one of our major out-of-hospital care services is under review.

The Minister will be familiar with a CCG’s “distance from target”, which is how far away a CCG is from what the NHS would consider the fair funding position to be. I can tell him that that will deteriorate yet further to 3.71% by 2019-20 from an already unacceptable gap of 3.5% in 2018-19. That position is simply unsustainable. The goalposts are being moved further and further away. In monetary terms, it means that we are underfunded by £43 million this year. If nothing changes, over the next five years we will be underfunded by £200 million. Our CCG has just agreed the 2019-20 financial plan with NHS England. That agreed plan will show a deficit of £192 million. That just cannot continue. I cannot believe for one minute that the Minister would be content with such a depleted health service.

What are the Minister’s views on what he can do specifically to correct the flawed growth forecasting? How will he address our significantly lower funding per capita? Will he tell me why the problems have not been addressed in the five-year funding allocation? I would appreciate a commitment to an early review of the funding allocation and extra intermediate emergency funding. At this rate, we are going to be cutting just about everything. If that funding is not available, I sincerely ask the Minister to explain exactly how my CCG and its providers are expected to close that deficit gap. Without cutting more health services for my constituents in South Cambridgeshire and for people across the whole Cambridgeshire and Peterborough area, I do not see how the CCG can make ends meet.

It is a pleasure, as ever, to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for South Cambridgeshire (Heidi Allen) for bringing forward this debate. I know there are not many Members in the Chamber, but that should not in any way undermine or take away from the importance of this debate, which is clearly of great interest to her. She spoke powerfully about the problems that the CCG has had.

I recognise right at the outset that Cambridgeshire and Peterborough CCG has faced a number of difficult, interlocking and historical factors. The historically low funding settlement is obviously taking time to rise to target—there is a commitment to rise to target over time, which I will come on to in greater depth in a moment—and that has combined, as she rightly points out, with the fast rate of population growth across the area, which has put additional demands on the CCG.

I and the Government recognise that the CCG receives less per person than its neighbouring CCGs. As the hon. Lady rightly pointed out, it gets £119 per person less than its neighbouring CCG in Bedfordshire. Although it is moving towards target—as she rightly points out, it is 3.7% below target this year—that figure reflects some of the historical funding patterns. It does not reflect the allocation formula change that the NHS is working to resolve.

The hon. Lady and the hon. Member for Cambridge (Daniel Zeichner) pointed out the growth levels. She is right that Cambridge and Peterborough have seen substantial population growth in recent years, and that growth has been 0.6% above the England average over the past four years. Inevitably, that growth—plus the potential growth from the Oxford-to-Cambridge expressway, which will put more housing along the corridor—will clearly cause additional pressures.

The hon. Lady asked for a commitment from me. I can say that NHS England is committed to bringing all CCGs up to target as soon as possible, while also ensuring that all CCGs receive some additional funding this year. As a result, the CCG has received an additional 2.5% per capita growth in 2018-19, and will receive a further 5% per capita growth in 2019-20. That will bring the CCG funding up to £1.1 billion for 2019, which is below target but moving up. As I think the hon. Lady said, it was previously some 5% away from the target; it is now 3.7% away from the target. Our commitment is to bring all CCGs up to the target as soon as possible.

The hon. Lady will not be surprised to hear me say that it is, of course, a matter for NHS England to allocate funding to CCGs, and that process has been evolving. It might be helpful if I briefly set out how that happens. NHS England must ensure that funding is equitable and fair, taking into account the three main drivers of healthcare demand: population growth, deprivation and an ageing population. As a point of principle, CCG allocations are based on equal access for equal need and reducing health inequalities.

As the hon. Lady pointed out, a complex national formula supports the allocation of resources, and historically that has caused some distortions. That formula is developed by the Advisory Committee on Resource Allocation, known as ACRA, which is an independent body of experts, supported by the population projections of the Office for National Statistics.

The hon. Lady cited some population predictions, which I think come from the Cambridge Research Group as opposed to the Office for National Statistics. She will therefore understand that, although I accept that those numbers are shared locally, Ministers and the NHS have to rely on the independent and academically rigorous body. Otherwise, it could easily be perceived that we were using a local think-tank’s population growth estimates to privilege one group over another.

Thank you, Mr Hollobone. Forgive me—I have not led a Westminster Hall debate before. I accept all that the Minister has said, and it is a difficult matter, but the statistics are flawed. The Minister said that he accepts that the growth is 0.6% above the England average; the Office for National Statistics is working on its being 0.1% below. Something is therefore going a little astray.

I am sorry—either I did not make myself clear, or the hon. Lady misheard me. I said that the population growth was 0.6% above the England average over the last four years. The number that she cited of the growth being below the average is from ONS predictions for the next two or three years.

Forgive me if I am mistaken, but I thought I heard the Minister agree that the growth was in fact 0.6% above the England average. If it is, why on earth are we working on the ONS figures that it is 0.1% below the England average?

This is prejudging the tennis season, in that we can go backwards and forwards, but let me say for the record that if I misled the hon. Lady I apologise wholeheartedly. I agreed that the population growth of the Cambridge and Peterborough CCG area has been 0.6% above the England average over the last four years; I did not intend to suggest that it is expected to be 0.6% above the England average for the next one, two or three years. I think the ONS number that she cited is one that we recognise; however, as I said, the numbers that she produced from the Cambridge Research Group are different from those of the ONS.

This year, ACRA has recommended a wide-ranging set of changes to the formula, to ensure fairness across the country. In the case of Cambridgeshire and Peterborough CCG, that has led to an increase in NHS England’s estimate of what the fair share of resources should be. That is mainly due to the mental health and learning disability service estimate and the market forces factor.

Changes have also been made to the way population data is used. ACRA now uses the annual average registered list for the most recent year, rather than the size of the list at the time of allocations, to allocate resources on a per capita basis. That change will inevitably benefit Cambridgeshire and Peterborough CCG because it will reflect more recent population growth. The change is obviously also intended better to reflect cyclical patterns in areas with large numbers of seasonal workers or large student populations.

ACRA also now uses specific data regarding age and gender population projections produced by the ONS, so that if population growth in an area is disproportionately in a younger or older population, which will obviously affect the relative need, that will now be reflected in the new way that NHS England calculates the allocations. As I said earlier, the formula changes will more accurately reflect population growth, deprivation and the structure of the population over the next few years.

I appreciate the sincerity, and my CCG knows that NHS England intends to improve the formula to make it more representative. However, a question remains, and it is the same question that the hon. Member for Cambridge (Daniel Zeichner) referred to regarding education: what happens in the meantime? Our CCG is talking about significantly cutting community services. That will affect elderly care in the community. That will stop vasectomies. It may take IVF treatment away altogether, as we are at just one round at the moment. Although I appreciate that NHS England is an enormous machine and improving the health formula will take some time, what do I say to my constituents whose health services are being cut while we wait?

I will say two things to the hon. Lady. First, the reflection of the formula and the increase in the money is coming through this year and next year. We have spoken about the additional per capita funding that is coming through.

There is a complicated set of issues surrounding national health service funding, but the CCG is telling us that it will have less money to spend in 2019-20 than in 2018-19. I really just want confirmation from the Minister that that is his understanding too.

All I have are the percentage increases in additional per capita funding for 2018-19 and 2019-20. I will seek inspiration to confirm the absolute totals, and if that inspiration reaches me while I am still on my feet, obviously I will relay it to the hon. Gentleman. If not, I am happy to confirm that I will write to him.

My point is that the NHS England allocation is based on the ACRA assessment and on the change in the funding formula. The hon. Member for South Cambridgeshire and the hon. Member for Cambridge rightly point out that, historically, the funding of their CCG has not been equivalent to that of local areas. That historical funding disparity is being improved, and is moving back towards the target of funding for CCGs over the next two or three years. I pointed out that last year there was a funding increase of 2.7%, and there will be one of more than 5% this year.

While the Minister’s inspiration is working diligently on the back row behind him, may I ask to be included in that? If we do not have time now, perhaps the Minister could come back to us. He is right that some additional funding has been provided to the CCG, but more than that amount is in mandated national programmes over which it has no control, so how much extra will the CCG receive for core services—not for something that has been put on it from a national point of view?

The hon. Lady will know that some of those core mandated services are providing core services as well. I am happy for the hon. Member for Cambridge to correct me, but my understanding is that an additional £8.5 million will go into the CCG. If he wishes to write to me with his figures, I will happily source those numbers for him. However, I have just received inspiration from somewhere, for which I am very grateful, and I can confirm that that is the number.

We could probably swap numbers for the remaining 11 minutes of the debate, but I am told that the CCG has additional nationally mandated commitments that exceed the extra money that it is getting, which is the nub of the problem. The overall problem, however, is that the Prime Minister has been going around telling people that a huge amount of money is coming into the national health service, but locally it appears that we have less. That is obviously difficult for local people to understand.

The Prime Minister has rightly been telling people that there is a huge commitment to put more money into the NHS. Throughout the debate, I have recognised that the moneys that the CCG historically received were below the target for CCGs. I have stated that more money is now coming into the CCG and that NHS England is committed to moving all CCGs to target. Although he may say that is a historical issue, I hope he would also recognise the fact that the Government are putting more money into the national health service and that that money is coming to his area.

That brings me to the point I wanted to make about wider funding. The Government are making a commitment and backing the NHS with an extra £20 billion a year by 2023, which will be reflected in the resources available to CCGs.

I note, however, that my reading of what is happening to the CCG is that it has already spent a lot of the money that is coming through, so it will mean not more money, but dealing with past debt. Again, could the Minister confirm that that is in fact the case?

That will partially be a decision for the CCG. I do not recognise exactly what the hon. Gentleman has said; I have said that an additional amount of money is going in. I accept that there are nationally mandated core services that need to be provided by the CCG. I stress again, as I have throughout the debate, that I accept that the CCG has historically been underfunded against population growth and against other local CCGs, as he and the hon. Member for South Cambridgeshire have pointed out.

I have reflected in my remarks that the change in the formula will allow the population growth that has happened in the previous four years to be more accurately reflected. If the hon. Lady’s growth projections prove more accurate than those of the ONS, I have indicated how, through the formula change, that will come through more quickly in the funding that is received by the CCG. Those are the key points. I am happy to write to her and the hon. Member for Cambridge to confirm the financial position as I and the Department understand it, so we are clear. We could spend another joyous eight minutes swapping numbers, but perhaps we will not do that now.

Suffice it to say that the long-term plan also sets out how the NHS will use those resources more effectively. It is clear that there is a huge increase in the commitment to primary care and that the formula change will reflect that more accurately for CCGs. I have no doubt that, if the formula increase does not come through in the way that the hon. Gentleman and the hon. Member for South Cambridgeshire expect, or that I expect, they will continue to make the case to me and will bring me back for another debate. I thank the hon. Lady for securing the debate and I hope she agrees that we have discussed the funding formula.

Question put and agreed to.

House Building Targets

I beg to move,

That this House has considered house building targets.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful to have been granted this important debate. I do not think anyone in the Chamber will disagree that we need more houses; I suspect that there will be violent agreement that we need homes and communities, not just blocks, because that will have an impact on how society develops, and we are aware of the close link between the provision of homes and the mental health of those who live in them. Given that, there is clearly a role for targets to ensure that we build more such homes, but they need to be the right targets followed by the right incentives and disincentives to ensure that we get the right behaviour.

The main house building target with which we are all familiar is the numbers target set by central Government. The National Audit Office has looked at that number and it is not entirely clear that it is valid. I am sure that the Minister will respond with exactly why that figure has been picked and whether he agrees with the NAO’s conclusions.

There is a similar challenge with the local government number, which is generally based on each 10-year census, the last of which was in 2014. There is room for some flexibility around affordability, but that is about it. In the same way, then, those local government targets also need to be properly validated, and we need evidence, so it would be appropriate for local authorities to be required to collect more information about that housing need and to look at brownfield sites and empty properties that are not being used.

Local authorities also need to be given more flexibility and enforcement power to bring uninhabitable sites into habitable use. Although, clearly, there are powers, the challenge is that most local authorities choose not to use them, because they do not have the finances or resources for a long, drawn-out process. That is not the right approach, however, and we need to consider how to make it simpler and easier for local authorities to use their powers. The real need has to be established, not just estimated.

If we are to look at the totality of the housing we need, we must also consider the challenge of land banking. Local authorities need new powers to prevent that behaviour. We could do that in a number of ways, such as by looking at the rules that allow a developer to comply with the legislation enforced at the time he purchased, not the time he develops, when it is often more stringent. One small thing would be to say, “You must comply with the rules as they are today.” We could also consider some form of compulsory notice, or, in extremis, compulsory purchase, to make sure that those plots of land are brought into supply.

The targets based largely on numbers are not enough. There are probably four areas that we need to look at, for which there are some targets and plans that are, however, not strong enough. Those four areas are affordability, environmental impact, infrastructure and community benefit. On affordability, I do not think that any hon. Member present disagrees that 80% of the market frankly does not represent anything affordable. The problem is that the link is with the market price of the house, not the average salary. I appreciate that if we make that link, there will be a huge funding gap that will have to be met from somewhere; I will come on to how I might do that in a minute.

We need new national and local targets for affordability, and we need to ensure that they cannot be diluted. Many developers, having said that they will develop x% in accordance with the local council’s rules and regulations, come back and say, “Oh dear, I cannot develop that number of affordable homes. They must all be executive homes”, and because the council is so needy of the community infrastructure levy and the new homes bonus, by and large, it caves in. That cannot be right.

The hon. Lady is making a very interesting speech. On the point about whether a developer can develop the proportion of social housing units, does she agree that developers should be required to publicly produce their affordability assessments in order that we can all have a look at those figures?

That sounds to me like an excellent proposition—I agree.

With absolutely the best interests at heart, the Government have introduced very good schemes, such as Help to Buy and so on, and I believe there are more on the way, but the challenge we have is that if a local authority complies and creates enough housing stock as part of those schemes, that squeezes the amount that can be available for truly affordable housing. Where I am in Devon, that has been a huge challenge for Teignbridge District Council. Once the percentages of affordable homes are agreed, they should be pretty much immovable, except in extremis. It should not be in the gift of the developer to change that.

How are we going to pay for all of this? I think we all accept that the fundamental link between salaries and the cost of a property has been broken and needs to be fixed. We need to look at how to share more fairly the benefit and the burden of the windfall that comes, first, as a chunk taken by the owner and, secondly, as a chunk taken by the developer. How might we do that?

Owners already pay a tax, so they do have to make some contribution. In addition, they should be required to set aside a fund for infrastructure provision, which is one of the biggest challenges for any housing development. That would be important. That money should be provided up front.

At the moment, the owner getting paid generally depends on the developer getting planning permission. It should be conditional not just on that but on the delivery of the infrastructure and, potentially, the affordable housing. There has to be some way of tying the owner to a greater responsibility for delivering the homes.

What can we do with regard to the developer? The developer is generally already required to make a contribution to the infrastructure, but, by and large, it is not an up-front contribution. We need to make changes so that it is. We need to look at putting infrastructure in place before we build even one house. There will be some occasions when, for practical reasons, the houses have to be built before the roads are, but the principle is important.

We then need to ensure that the developer is held to account on developing the types of homes that the council needs. Whether an area needs flats or two-bedroom homes or three-bedroom homes, or whatever, will be in the council’s local plan, with more information in the neighbourhood plan. Often, the developer brings an argument that they cannot provide what is required—that they need to provide executive homes, because that is all they can afford to produce. That is not the right answer. The council ought to have the power to ensure that, when it grants planning permission, it is to provide the houses or flats that we actually need. There might be a question about whether a developer would then continue to develop. If that were a national policy, rule or regulation, they would continue to develop, on the assumption that they want to stay in business.

What about the council? In this whole process, they do not have the relevant power or resource. By and large, they cannot say to a developer, “No, you are not providing the sort of houses we need.” They need the CIL money, they need the new homes bonus and they know that if they lose an appeal brought by a developer, they will have to pay the costs. That rule needs to be changed. Councils need to be free not to give planning permission where they feel it appropriate, without having over their heads the real burden of paying fees if they are then proved wrong.

On brownfield sites and empty properties, councils need to be given the power to enforce. That means ensuring that they are properly funded to do so and that the legislation has the teeth to make that happen. Without that, those who own brownfield sites or have vacant properties will not be willing to do much about them.

I want to touch on the environmental impact. This is a huge issue; it has had a significant impact in my constituency. There is a much fought-over development in Newton Abbot, called NA3. It is currently being reviewed by the Government, because the local authority did not make a decision in sufficient time. The developer has effectively said that they want it to be looked at in more detail, and that process is ongoing as we speak. I will not refer to the details exactly, as the matter is currently in train, but the way the system works means that no account has been taken of the real number of houses we need, nor of the real value of that particular piece of land, which offers much in environmental support and opportunity for the area as a whole.

Another example is Kingsteignton, one of the smallest towns in the country. It started out as a very small village and just got developed and developed. The character of that village has largely been destroyed and it has become a small commuter town—a dormitory suburb of Exeter. It was never developed to be a town, so there is no physical centre such as a cluster of shops that people can go to, to give a heart to that community.

There are a number of things that might be done to address these issues. I start with carbon impact, which is slightly dislocated from my previous point. There used to be carbon impact targets. As I understand it—the Minister may correct me—they were abolished in 2014 or 2015. It seems to me that everyone feels very strongly, and rightly so, that if we are to do our bit, we need to ensure that new housing is developed with the lowest carbon impact possible. That is not the case at the moment. Many constituents say to me, “Why are solar panels not mandated nowadays on new developments?” Not to mandate them on industrial developments certainly seems to me to be madness. That needs to be re-examined, and I hope that with the new focus on environmental matters, the Government will do that.

If the Government are really serious about trying to ensure that there are beneficial rather than adverse environmental impacts, they need to look at investing in and supporting investment in new technology to enable us to build new, high-quality, environmentally friendly houses and homes.

My other concern is about the green lungs. In communities that have been further built out, we have tried to retain small areas of parkland and so on, so that people feel the area is a home, and they have somewhere they can take their children and their dogs and so on. In a large conurbation like London, that is difficult, and we are where we are, but there needs to be a greater focus in planning on retaining the green lungs going forwards. I am concerned that we now seem to be continually reducing the footprint that a property has, and reducing the amount of land/garden. Mental health is also a big issue today, and greenness and space are very important to mental health. The link between planning, housing and mental health does not need me to prove it. It is already there for all to see.

The Government should be looking at a new strategy. Alongside looking to develop new towns—I know there are some already—they should be looking at new villages. I appreciate the appeal of new towns with their greater population, but our villages are one of the beautiful things about our green England, and Scotland, Wales and Northern Ireland. Why is it that we cannot have a new villages strategy? They might be the template for environmental pilots. If the Minister in any way accepts any of that, the national policy planning framework will need to be reviewed and fundamentally overhauled.

Let me now look at the issue of infrastructure. I have talked a bit about the funding and when the money comes forward, but I am still amazed that, although there is an obligation to put in a telephone line and connect to water and electricity, there is no obligation—unless the Minister says it has changed—to put in broadband. It seems to me that planning should not be given unless the developer makes a commitment to put in broadband, by which I mean a broadband connection to BT—not because I love BT, but because it provides the physical infrastructure. In some areas where in theory there has been a commitment to provide broadband, it has been access to Virgin or one of the other suppliers. As they do not have control over the physical network and infrastructure, the reality is that the community cannot get broadband. I am hopeful that the Minister is looking at some of the challenges.

Infrastructure is not just about electricity or broadband but about having enough schools and health provision. One of the things that has continued to surprise me is that some very important consultees are not statutory consultees. One of those is health. Although the Minister’s predecessor would say to me, “But they can be consulted, and usually they are,” my response has always been, “Well, that’s true, Minister, but the reality is that if there is no statutory obligation to do it thoroughly and properly, you will probably not do it to the degree that it needs to be done.” I am certainly aware that there are many areas in my part of Devon where we do not have adequate provision for health services, which is a real issue.

Part of the infrastructure is normally funded through the council. One of the things that has been a barrier to councils is their inability to borrow against future receipts of CIL moneys or the new homes bonus. If we could change that—at one point, one of the Minister’s predecessors started looking at it—it would make a significant difference. Although the CIL and NHB moneys go to the council, there is no obligation for them to use that money in the local area where the development takes place. I appreciate that where there is a neighbourhood plan—I am certainly a great fan of them—it is a win-win for that neighbourhood, because they get an element of the money to use in their own area. Although that is a good start, I do not believe that it is adequate.

Let me now turn to the final area where I think we should have different thinking, new targets and a new approach: the community. How does the community benefit from all this? Looking back in history, the concept of planning and planning approval was introduced because it was believed that landowners had too much power to build anywhere—rightly so, because they own the land—and it was therefore thought more appropriate for there to be some control, hence the planning process.

It seems that there is a stakeholder missing from this agenda: the community. I have talked about providing homes and ensure that we have stable and mentally healthy communities, but we will not do that unless the community is involved. I know that there is a requirement in the NPPF to look at environmental and community issues, but there are no real teeth to it. It seems that the concept of community interest is very limited and needs to be reviewed. At the moment, we generally look at the impact of any plan put forward on productivity—rightly so—but we do not look at the impact of that development on the community’s quality of life, which is important. If we are so focused on the need for healthy communities and on reducing our mental health issues, that is critical. If we are to achieve this, the NPPF will need to be changed.

In trying to put the community at the heart of all this, we need to look at a viable villages initiative. I have referred to the issue before. One of the challenges is that most of the large developers will not develop small villages. The small developers find it more expensive because they do not have economies of scale, and many have gone out of business. Without support from the Government, we will not change that. Unless we look specifically at how we will ensure that existing villages remain viable, so that there are still enough children to attend the schools and enough people to go and drink in the pubs, we will find that our villages die. Wherever they are in the country, that will be a loss. We need to look at how we do that, be it through simplifying the planning permission or through Government grants and support for small builders. I am sure that the Minister is better placed than I am to address that.

I have an old chestnut: engagement with the community. I have raised this with just about every Minister who preceded the current Minister, whom I shall also ask to consider it. For all the reasons I have expressed, I believe that the community should have a right of appeal in the planning process. The Minister’s predecessors have always said to me, “You can’t, because you’ll create a nimby world where anybody who doesn’t like something simply puts up their hand.” I would say no. Indeed, a piece by the National Federation of Builders that was based on an article I wrote said, “You can’t do this.” I am sure its concern was that, should we get the community involved in nimbyism, it would simply block development.

If we were to manage the process properly and say that only a town or parish council could appeal, and if appeals had to be made on planning grounds, it would minimise the room for manoeuvre and for nimbyism to creep in. I recommend to the Minister that he look at this again. The intention is not to take power away from district councils; it is to get a better, joined-up system that works for communities, councils, central Government and all of us who want more houses in the right places. We want communities, not just blocks of flats.

I thank the Minister for his patience. Owing to the actions of a number of Governments over the years, our planning system is now broken. Although I commend the Minister’s predecessors for working hard to change that—much of what went into the NPPF and the new plans was good—it remains broken. It cannot just be a numbers game, which is what we focus on now. The system must take into account some of the other issues that have been raised. We have to look at how we will link house prices to wages, and I have made some proposals on how we do that. We absolutely need to address this key issue, so that people on average wages in Devon can actually afford to buy a house in a sensible timeframe, rather than having to rely on the bank of mum and dad and/or wait until they are 40. As Maslow said in his hierarchy of needs, a home is the most important thing for human survival.

It seems to me that the community must and should have a voice. I hope that the Minister will take my suggestions, and that he will look at them and digest them. I very much hope that he will stand up and say that many of these are good ideas. Indeed, it would be even better if the Minister were able to tell me that the present Government were already looking at them. I shall now sit down and look forward to hearing the Minister’s and other contributors’ thoughts on this very thorny issue.

Order. The debate can last until 5.30 pm. I am obliged to call the Front Benchers no later than 5.7 pm. The guideline limits are five minutes for the SNP, five minutes for Her Majesty’s Opposition and 10 minutes for the Minister, and then Anne Marie Morris gets two or three minutes at the end to sum up the debate. Four Back Benchers are seeking to contribute, so I am afraid that there will have to be a time limit of four and a half minutes, to make sure that everybody gets in.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I want to focus my remarks on land banking. Hull is a growing, successful city that is attracting significant investment and undergoing positive change. The council has already granted numerous housing, commercial, industrial and educational permissions, the majority of which have been implemented.

In my hon. Friend’s constituency, Goodwin Community Housing is a great example of brownfield sites being used to build modern, modular, low-carbon housing. Does she agree that we need to see that model of housing develop if we are to meet our housing targets using brownfield sites?

I completely agree, and I look forward to going to see those properties on Friday.

We have a problem with landlords not implementing their permissions in full, and with one landowner in particular. The problem is not just that sites are not being developed, but that landlords are failing to manage their responsibilities for them. There are patches of land across the city—I will talk about the details in a moment—that are being left to go to ruin, and landlords are not taking full responsibly for health and safety.

The Lord Line building is a site of personal significance to the people of Hull, as it is one of the last buildings relating to Hull’s fishing heritage. It is the site of the dock where the fishing boats used to come in and out of when we were the capital city of the UK for the fishing trade, but it has been left to go to ruin. Youths go in there for reasons that I do not want to elaborate on here. We can see from the discarded needles, the bricks thrown from the top of the building, and the fire engines that attend the site regularly that it is not being properly safeguarded or protected. There will end up being a tragedy there, because people keep going to that building and it is not being looked after.

The owner of that land also owned the former Rank Hovis Clarence Mill on St Peter Street. They pledged to clear the building and promised a Radisson Blu hotel in its place. The demolition and clearing work still had not started by 2015, and in 2017 the permission expired and was not renewed. They bought the Heaven & Hell nightclub in March 2011. They said that they were going to put a £15 million development called Manor Cube on the site, and stated that the building work on the hotel would be completed by July 2013, but by that time no work had been completed.

The Lord Line building has been left to go to rack and ruin, causing great upset in the fishing community in Hull. The company—Manor Properties—seems to have a habit of promising pie-in-the-sky, wonderful, big dreams to the people of Hull, while letting the areas go to ruin.

There are a few points where I feel the Minister can tighten up the existing legislation to prevent this from happening again. We could have enhanced compulsory purchase orders where a site is allocated and consent is not implemented in full. Those powers could enable the local authority to acquire the site at 50% of its market value, provided that it commences development within 12 months of acquisition and at least 50% of the development is completed within three years. I know that the council would develop that land, but it does not have the power to purchase it. If a section 15 notice has to be served due to a lack of maintenance and dereliction on a site, allowing it to be acquired at 40% of its market value could also help the development.

The Minister should also focus public sector funding on unlocking those sites by providing additional grants and loans. The rules are set up to prevent the council from being able to compulsorily purchase the sites, but when people come into my city on the A63, they see this abandoned building on the way in. That is not the advertisement that I want for my city. People walking around the centre see patches of land that have been left or underdeveloped. The Minister could change that by just tightening up a few bits of legislation.

Removing VAT for any conversion works undertaken to properties’ heritage action zones would also help us. The Minister should change the rules about what constitutes a material start, to prevent landowners from undertaking minor works.

When I first came to the House in 2008, I began work on a paper called “Open Source Planning”, which set out an important distinction and led to the abolition of the top-down targets that had existed under the Labour Government. It took a little while to get rid of them, but we have not replaced them. The Chancellor’s target of 300,000 houses is an aspirational or soft target, because it cannot be achieved on its own without consequential changes to the planning system. We have already made a large number of changes, and there are more on the way.

The main target that we should be aiming for is one based on housing need. Under previous Administrations, it was left to individual councils to come up with the figure for housing need and methodology to calculate it. That was incredibly expensive for councils and led to an enormous number of court cases, as developers challenged them. I was very pleased when the Government asked me to sit on the Local Plans Expert Group and come up with a new methodology. We were the first to introduce a methodology based on Office for National Statistics figures. Although there are some problems with it, which I am sure the Minister is aware of, it is a very useful starting point.

Unfortunately, many other deals—for example, growth deals—have subsequently come into play and overridden those figures. The councils concerned have come up with other figures to replace the need figure that is based on, for example, strategic housing market assessment surveys that are quite old. We and councils must have an overriding desire to go back and take those figures out to the public to discuss what is being done and ensure that there is public buy-in.

My hon. Friend the Member for Newton Abbot (Anne Marie Morris) mentioned the NPPF. I am very pleased to have been involved in the original version of it. All we tried to do with it was to boil it down from thousands of pages to 50 to make it accessible to everyone.

The best targets are those in neighbourhood plans. They have been developed by the community, and the figures from the district council that they have been built on are merely the minimum figures. The community can add to them whenever it wishes. Neighbourhood plans are very good at protecting the open and green spaces that the community wishes to include. There is a great need to protect the people who spend a couple of years producing a neighbourhood plan, which is why I introduced a private Member’s Bill to take away the right of appeal if a developer has definitely gone against a neighbourhood plan.

I do not think the system is broken. We have gone out of our way to try to fix it. I would point to the fact that the viability calculations that developers have to produce are public. They are available and have to be discussed, and local councils should have access to them. I agree with what my hon. Friend said about carbon impact, but I believe—

Thank you, Mr Hollobone; it is a pleasure to serve under your chairship. I congratulate the hon. Member for Newton Abbot (Anne Marie Morris) on securing this particularly important debate.

Since 2010, housebuilding has fallen to its lowest level since the 1920s. Rough sleeping has risen every year, rents have shot up faster than incomes, there are almost 200,000 fewer homeowners and new affordable housebuilding is at a 24-year low. Meanwhile, average house prices are at a record high of almost eight times the average income, yet we wonder why home ownership is at its lowest level in Britain since 1985.

In reality, although 1.2 million people are on housing waiting lists across our country, this Government delivered just 6,464 social homes in 2017-18. That is simply diabolical when compared with the 150,000 social homes delivered every year in the mid-1960s. The evidence is clear: it has been done before and can be done again.

The housing crisis is about the reality behind those statistics. I am tired of the endless reports, countless debates, fruitless words and lack of action. The Government have a house building target of 300,000 new homes per year, but they simply cannot keep willing the completion of more homes without finding the means to provide them. Here are some of those means.

North Lanarkshire Council is the biggest homeowner in Scotland. Some £160 million has been invested in 1,000 houses, on top of 800 new houses. North Lanarkshire is leading the way in Scotland. More of that can be done by the Scottish and UK Governments.

I thank my hon. Friend for his intervention.

First, it is time to burst the myth that the green belt is green and start using the non-green sites for the homes that our children so desperately need in London alone. There are garage sites, waste plants and deserted scrublands all posing as green-belt land. Would we rather use them for homes that our young people can afford to buy, or are we happy for scrappy plots of land and non-green-belt land to remain wrongly designated as green belt just because of the potential furore that de-designation may cause?

Secondly, the Government should introduce planning policy guidance so that all new building on public sector sites is considered for social housing in the first instance. Thirdly, is it not time to end the taboo and encourage the building of modular homes? They are cheap, efficient, quick to build and can last for up to 120 years.

Fourthly, why are the Government not introducing more punitive action for the 200,000 homes currently lying empty across our country? Fifthly, how about increasing the surcharge for the 10% of people who own a second property before so many even own their first? Sixthly, the Government should introduce punitive or preventive action for land bankers. After all, if the Government started unlocking their own land bank, the private sector would rush to follow.

Seventhly, what about reducing the proportion needed to buy into shared ownership, from 25% to 5%? Eighthly, could the Government not incentivise more building of specialised accommodation for the elderly, thereby releasing some of the current housing stock? Ninthly, it is time to prioritise locally, especially in the capital. Londoners should have first option on local properties before they are sold off internationally and likely to remain empty.

Finally, how about directing pension funds into residential investment? As my hon. Friend the Member for Croydon Central (Sarah Jones) will know, Legal & General bought 167 homes in Croydon and leased them back to the local council over 40 years, for homeless families. Those are just some suggestions. In the name of all the families who we see every week at our advice surgeries, let’s get building!

I am delighted to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Newton Abbot (Anne Marie Morris) for introducing the debate. The Minister will no doubt know what I am going to talk about because we have talked about it privately, but I will put it on the public record. He has been very helpful in his response, but I hope that he will be a little more helpful.

Stroud District Council wants to build more affordable houses and is prepared to accept a bigger housing number overall. It is particularly proud of its reputation for social housing. The problem is that, as it currently stands, the methodology makes it difficult for us to meet the numbers that we are now required to meet, which are well above the numbers in the plan that we negotiated a few years ago.

The current methodology starts with the average level of household growth projected over 10 years, which it then adjusts based on a relative balance between median house prices and earnings, with a larger adjustment for areas with higher ratios. It then caps the level of adjustment to 40% above the housing requirements adopted in the post- national planning policy framework local plans. That sounds a bit like gobbledegook, but it basically means that, in the case of Stroud in Gloucestershire, we now face an increase on our local plan from 448 a year up to 635 a year, which is a 39.3% increase. Tewkesbury and the Forest of Dean also face large increases but, quite bizarrely, Gloucester and Cheltenham face a decrease. They have always been somewhat in parallel with Stroud, so it seems bizarre that we have come up with a methodology that affects us in that way.

One thing that the Minister could look at is the five-year migration flow, which seems to make a dramatic difference. We accept the uplift in terms of the household projections because we have a larger population, but the affordability ratio has taken us from 503 to 635 a year, and that matters, because that makes things more difficult, rather than easier. The numbers mean bigger sites. Some of our good, smaller sites are not being brought forward.

There is also the issue—as the Minister knows well—of the viability assessment. I went to a meeting of the all-party parliamentary group for housing and planning. I was pleased to hear the Minister’s officials say that they are looking carefully at that and intend to make it much more transparent, including publishing section 106s, which would be a very good thing, because we have always had our suspicions about what happens to those behind the scenes.

The additional problem is that we are still included within the same rent allowance area as Gloucester, which means that, because rents are higher in Stroud, people are faced with a top-up. I know that the Minister will not have the chance in this short debate, but I would appreciate it if he looked carefully at disaggregating rent level areas again, because otherwise it makes it punitive for those who want to rent in Stroud but cannot afford to pay the top-up.

In conclusion, we need to produce more housing. Everyone is pushing the Minister towards more housing. The Government have the laudable aim of building between 270,000 and 300,000 new homes. We will do our part in Stroud, but we cannot rely just on the larger sites. We have two bids in for the garden communities—I do not know if the Minister will address where those bids have got to—but I suspect that we do not have the capability or the capacity to deliver one of them, let alone both, because of the numbers required.

My plea to the Minister is to look at how the calculation has been arrived at, to give us more realism, so that we can play our part but do not end up with a huge shortfall, which will end up being hammered at the next local plan stage. That would seem unfair, given that we have tended to meet our level of housing in the past and would like to do so in future.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful to the hon. Member for Newton Abbot (Anne Marie Morris) for introducing this debate. She covered a range of issues and challenges, including mental health, the environment and local infrastructure.

We also heard from the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), who covered the issue of land banking. The hon. Member for Henley (John Howell) covered housing need and a change to a methodology based on ONS figures. The hon. Member for Mitcham and Morden (Siobhain McDonagh) covered a range of issues, including the cost of housing and average wages, and a whole range of ideas for how we can build more houses. Her key message was “Let’s get building”, with which I wholeheartedly agree. The hon. Member for Stroud (Dr Drew) also raised issues with the current methodology and the need to provide more housing. I think we can all agree, no matter where we are in the country, that we need more houses.

Ensuring that everyone has a safe, warm and affordable home is central to a fairer and more prosperous society. People want to live in the communities to which they are affiliated or that offer employment, which often means that they might not want to live in a nearby town a few miles down the road.

Housing and planning are both devolved to Scotland. Sometimes in these debates, I feel like an international observer, but today so much is in common that there is a lot there and perhaps a few things that we can all learn from one another. In Scotland, the SNP is on track to deliver an ambitious target of 50,000 affordable homes in the lifetime of the current Scottish Parliament—which will expire in 2021—backed by a £3.3 billion investment. It is incredible to remember that when the SNP came to power in Scotland, the previous Administration had built just six council houses across the entire country.

By contrast, under the SNP, 20,255 new build homes had been completed across all sectors in the year ending in December 2018, which is an increase of 15%, or 2,669 homes, on the previous year. In the year to the end of March 2019—these figures only came out today, so I had to rewrite my script rapidly this morning at short notice—there were 1,413 council house completions. The total number of social sector completions, including housing associations, was 5,582, which is a 22% increase on the previous year. We need to build far more, but we are going in the right direction and a lot of lessons can be learned from that. The latest statistics show that the Scottish Government have now delivered almost 90,000 affordable homes since 2007. In the year to the end of March 2019, affordable housing supply completions totalled 9,535, up 12%, with 11,130 affordable housing approvals over the same period. We are going the right way.

The Scottish Government are providing more than £756 million for affordable housing this year, and that will increase by £70 million next year. Councils have been given long-term planning assumptions to March 2021. The Scottish Government will continue to lead the way on affordable housing supply in Scotland. In the four years to 2018, 50% more affordable housing units per head of population have been delivered than in England. That is something that we can be proud of, although we still need to build far more houses.

The Scottish Government are taking a range of other actions to bring empty properties back into use. This is an important area. I was shocked to read about the number of long-term empty homes in England, which is now estimated to be more than 216,000. Estimates put the figure in Scotland at about 37,000, but those figures are from different sources so I cannot compare them directly. The SNP supports the Scottish Empty Homes Partnership and a network of dedicated empty homes officers across Scotland. Since 2010, the partnership has been instrumental in bringing more than 2,800 empty homes back into use. There is obviously far more we can do and we are committed to that programme, so we will double support for the partnership from £212,500 in 2018 to more than £400,000 in 2021. We can all learn a lot from one another’s practice in housing.

It is a pleasure to serve under your chairmanship, Mr Hollobone.

I welcome the debate and congratulate the hon. Member for Newton Abbot (Anne Marie Morris) on securing it and on saying a lot of sensible things on which a lot of us can agree. I would like to say a big thank you to the hon. Member for Henley (John Howell) for managing to reduce the quantity of reading on the NPPF that the rest of us have to do. Even though the Opposition think that we can beef it up, we certainly want fewer pages and less red tape. I congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on her barnstorming 10-point plan for housing, which would provide the homes we need and was powerful to hear.

There is much agreement in the Chamber. We are not building enough homes, those that we do build are not often affordable, the right infrastructure is not necessarily in place and no single policy can solve that. We have big structural problems with our housing system, caused by years of Government neglect and market failure.

As my hon. Friend said, we have to remember what we are doing this for. Rough sleeping has more than doubled since 2010, 120,000 children are in temporary accommodation, home ownership is down, with 1 million fewer young home-owning households than in 2010, and we have an insecure private rented sector. In the private rented sector, homes are often in poor condition and 1.3 million children live in poverty. About a quarter of those children would not be in poverty if they had access to social housing. The cost of private rents is driving families into poverty.

The record on house building since 2010 has contributed to the crisis. House building is still well below the levels needed, and it has not recovered to where it was before the global financial crisis. Half of local authorities are set to miss their targets for new homes, while developers get away with paying less for infrastructure. House prices and developer profits have been inflated artificially by Help to Buy, while the supply of genuinely affordable homes has plummeted. The past two years have seen the lowest levels of homes for social rent built since the second world war—as my hon. Friend said, about 6,500 socially rented homes.

There have been flaws in how the Government have managed house building targets and in their approach to planning more broadly. As the hon. Member for Newton Abbot said, the methodology for calculating local house building targets is flawed, and the National Audit Office confirmed that the system is not working well. The NAO also noted that reducing the target for certain regions could hamper local authority plans to regenerate and to stimulate economic growth.

Too often, councils are losing their grip over planning policy. Too many are still without the up-to-date local plan and five-year land supply that they need to avoid developers overruling them and building the wrong types of homes. The gap between homes granted planning permission and homes built is at its widest on record and, as my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) said, land banking is a huge problem that we need to tackle. After years of cuts to local authority funding, many councils simply do not have the capacity and the expertise to negotiate effectively with developers to deliver the homes we need. Local authority spending on planning and development has halved since 2010, and the NAO has questioned whether councils have the necessary commercial skills.

Labour’s approach to house building is fundamentally different. We believe we should be more ambitious, not less. We need more homes, which need to be genuinely affordable. As the hon. Member for Newton Abbot said, we need to define in some way what we mean by “affordable”. Labour would redefine in legislation what “affordable” is, linking it to earnings as well as house prices. Our green paper on affordable housing, “Housing for the Many”, sets out our plans to build 1 million genuinely affordable homes over 10 years, including the biggest council house building programme in nearly 40 years. We must return councils to their rightful place as major builders of homes, and we have been clear that we would restore the national grant investment to the £4 billion a year it was at the end of the last Labour Government.

Our campaigning has had some wins. We are glad that the Government agreed to lift the housing revenue account cap and to close the viability loophole, which gave developers a get-out clause on affordable housing. However, the decision to back Labour and lift the cap on council borrowing to build council homes means little if Ministers will not suspend the right to buy, support the half of councils without a housing revenue account to set one up, or provide much more central Government funding to councils.

I look forward to the Minister’s response to the debate. Will he push for a major building programme of affordable housing as part of the next spending review, set new affordable housing targets and respond to Labour’s call for new powers to end land banking through housing delivery contracts?

It is a great pleasure, as always, to appear under your accurate and well controlled chairmanship, Mr Hollobone. A number of Members have raised myriad issues, literally two or three dozen different, particular and technical ones, which my team will attempt to respond to in writing. I will cover some of the major ones.

I congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on securing this important debate. House building is at the heart of so much of Government priority at the moment and has been a big part of my life over the past 12 months or so. We will see how much longer that lasts. A number of specific situations have been raised by Members, but I hope that they appreciate my position in the planning system and the quasi-judicial position of the Secretary of State. It would be inappropriate for me to comment on particular issues and local plans, such as Teignbridge, but I can talk more broadly about some of the issues.

Before I do that, I will say that I have found over the past 12 months a slightly debilitating attitude in some of our debates, which speaks of the problems we have in the housing market—there are certainly ones that need to be addressed—as if they suddenly arrived in 2010 and there had not been a general failure of Governments over a number of decades to build the houses that we need. Under the last Labour Government, the peak in house building was 223,000 a year. We hit broadly the same figure last year, after 10 years of recovery in a housing market that had been decimated in the financial crash. An inability and unwillingness to acknowledge that does a disservice to the general public. Presenting a series of silver bullet solutions to a very complicated and difficult problem does not illustrate to the public that all parties across the House are joined shoulder to shoulder to build the homes that the next generation needs.

I am pleased that there is general cross-party agreement that a target of 300,000 homes or thereabouts—1 million homes over 10 years, which is about 100,000—

Affordable homes as well. That is critical. It would be helpful if, from time to time, the hon. Member for Croydon Central (Sarah Jones) acknowledged, as she did in the latter part of her speech, some of the things that the Government have done to get us towards 222,000 homes and to move beyond that in the months to come.

On the major subject of the debate, local housing need, we introduced a standardised approach to assessing housing need locally, as my hon. Friend the Member for Henley (John Howell) mentioned. We published that in July last year in the national planning policy framework, after extensive consultation to speed up and reduce the cost of plan making, to make that process more transparent and accessible.

In practice, all councils should make a realistic assessment of the number of homes that their communities need and they should use the standard method as the starting point, not the end point in the process. That starting point is used to identify the minimum number of homes needed every year. What the standard method does not do, however, is provide a maximum number of homes needed, nor does it provide a target that must be planned for. Development should not progress at any cost, and local circumstances should be taken into account. We need to make sure that constraints are considered and that we find the right places for homes, having regard to those constraints.

We need to ensure that the right infrastructure is in place, as my hon. Friend the Member for Newton Abbot said, and that we underpin all development with good design principles. Local authorities are best placed to do that; through the production of development plans they should set out how to meet the needs of their communities. It is vital that local authorities plan sustainable communities, as my hon. Friend also mentioned, delivering homes that people want to live in. As part of that, we need the right types of infrastructure ready to support the delivery of new homes. Identifying the infrastructure needed to support growth will be an important aspect of local plan making. It is only by identifying what is required that it can be planned for and delivered.

To support that delivery, we are providing grants to local areas. Through the £5.5 billion housing infrastructure fund, we will help to deliver the infrastructure that is needed. I am pleased that Teignbridge District Council will benefit from the fund, having successfully bid for £4.9 million of marginal viability funding, to unlock 315 homes by investing in the Dawlish link bridge. I am also delighted that in the wider Devon area, the successful south-west Exeter bid for forward funding will provide over £55 million to unlock 2,500 new homes, delivering road improvements, suitable alternative natural green space, GP surgery facilities and strengthened utilities provision. That money is going towards ensuring that planned new development is supported by the infrastructure that the community needs.

The planning system should be genuinely plan-led, with up-to-date plans providing a framework for addressing environmental, social and economic priorities for an area. Local plans are prepared in consultation with communities and play a key role in delivering necessary development and infrastructure in the right places. Community participation is vital in that. The best plans are those in which communities have been effectively engaged throughout the process. Having an up-to-date plan in place is essential to plan for housing, providing clarity to communities and developers about where homes and supporting development should be built and where not, so that development is planned for rather than being the result of speculative planning applications.

Through the revised national planning policy framework, we have made significant reforms to make it easier and quicker to get a plan in place. We have introduced flexibility in plan making, with a new, more flexible plan-making framework and an expectation that plans are kept up to date through review at least every five years. That ensures that local people have the opportunity to engage with the local plan process regularly, and that a plan stays relevant to the community it is prepared for. In addition, neighbourhood planning gives communities direct power to develop a shared vision for the future of their area, and to shape development and growth. I am very pleased to have a neighbourhood planning champion in the debate—my hon. Friend the Member for Henley.

Communities can decide the location of new homes, employment, shops and services, protect local green spaces and heritage and set policies on the design of new buildings. Producing a neighbourhood plan can bring the wider community together in the creation of that shared vision, through the consultation and engagement process. Over 2,600 groups have started the neighbourhood planning process since 2012, in areas that cover 14 million people. I welcome the fact that four neighbourhood plans have been made in the constituency of my hon. Friend the Member for Newton Abbot, and I acknowledge the contribution that those plans make to community involvement in the process.

My hon. Friend went through a list—I think I wrote down 11 specific points—of issues that she wanted to raise. I want to address one or two of them, but I will respond to the rest in writing. There were a number of misapprehensions, if I may say so—that may be my fault because I have not communicated to her some of the things we are doing. She talked about the requirement for new villages. Could we plan for new garden villages? We do have a garden villages programmes and are supporting 23 garden villages. We put a prospectus out for more in December last year, expecting to get back a few dozen, but we got 100 applications back. There is a lot of hunger and ambition in local authorities to do exactly that.

On broadband, I agree with my hon. Friend that we want it to spread across the community. It is certainly part of planning guidance that those kinds of facilities should be provided. While not mandatory, local authorities can, through their local plan, encourage developers to put that kind of facility in place. A number of hon. Members mentioned viability, section 106 and transparency; we are moving to make sure that section 106 agreements are published, not only so we can see what our local authority is producing for a local community but to compare the performance of our local authority to its neighbours. Some local authorities do well on section 106 negotiation and others not so well, so to be able to see across the piece is key. Viabilities should be open, transparent and publically available, so that local people can see what is being done in their name.

My hon. Friend mentioned support for small developers; she is right that in the crash of 2007-08, about 50% of small developers were wiped out. They used to produce over half of new homes in this country; obviously, that number has fallen significantly. Part of the challenge of getting up to that 300,000 number will be stimulating a whole new generation of developers—both new ones and expanded existing ones. We are putting significant funding and assistance behind helping them to do so. We have a large fund of £1 billion with Barclays, seed funded by Government and with Barclays putting in the rest, specifically to support small developers.

There was a lot of emphasis on our increasing capacity by using modern technology and construction methods. Modular homes are the way to go. Again, we are putting significant amounts of money behind stimulating that market and the adoption of new building techniques. I have challenged large and small developers not to be the Kodak of house building and to ignore technology at their peril, such that they might be rendered obsolete. It is coming: we reckon there are something like 30 factories across the UK that produce modular homes. There is much more that we can do and we are keen to stimulate that.

The hon. Member for Mitcham and Morden (Siobhain McDonagh) raised a number of points, many of which we are actually taking up. We have made second home owning more expensive, we are attracting institutional funding into housing and, as she knows, we have given local authorities the ability to change green belt boundaries if they wish, subject to a high bar.

I want to finish by thanking everybody for participating in what has been a detailed debate for just an hour. While we will respond to the points raised, I urge hon. Members please to refrain from imagining that there is some simple solution to the housing crisis in this country. It is a complicated landscape, but we are applying as much energy and industry as we can to building the hundreds of thousands, nay millions of houses that the next generation needs.

I thank all the contributors to this debate; there are some things on which we are in violent agreement. I thank the Minister for his reply, particularly the further reply that we are all expecting to the points that we made. However, the question of validating numbers is still unanswered. I ask the Minister to look at how they can be validated because—as other hon. Members have said—sometimes, local authorities are asked to do the impossible. We all want to provide the houses, but we do not have the means to do it. I would like the Minister to focus on giving local authorities more power to do what he says they are authorised to do. Without the money, they cannot enforce and deliver the things that the Minister would like.

We still have not addressed the link between house prices and wages; I would like the Minister to look at that as a matter of urgency. He did not have a chance to respond on the environmental issues; I am pleased to hear about the new villages programme, but we need to look at need. It is not just a bottom-up issue, of “this is what we need;” it is also a top-down issue, as my hon. Friend the Member for Henley pointed out. Some communities will simply not be able to absorb that need. The Government need an overall strategy to put that together. I thank the Minister for taking that on board and I thank all Members for their contributions.

Motion lapsed, and sitting adjourned without Question put (Standing Order No. 10(14)).