House of Commons
Thursday 14 June 2007
The House met at half-past Ten o’clock
Prayers
[Mr. Speaker in the Chair]
Oral Answers to Questions
Treasury
The Chancellor of the Exchequer was asked—
Employment Trends
There are a record 29 million people in work—more than at any time in our history and 87,000 more than this time last year, making our growth last year 2.8 per cent. To create more jobs, we will maintain economic stability, intensify the new deal and, as we are announcing today, improve adult skills and seek excellent standards in every school in the country.
I am grateful to my right hon. Friend for that answer. As he knows, unemployment in my constituency is 2.4 per cent., but that will rise substantially if the Scottish National party council has its way. It has recently written to more than 5,000 staff, telling them that unless they sign a new contract, they will be dismissed by 30 September. Does my right hon. Friend agree that, far from bullying its staff, the SNP should withdraw the letter, apologise and get back to the negotiating table?
I am grateful to my hon. Friend for telling me that 5,000 jobs could be at risk as a result of the Scottish National party’s policies. We have created 200,000 jobs in Scotland over the past 10 years. Any economic policy or any policy pursued by the Scottish nationalists that puts jobs in Scotland at risk would be taken very seriously by the Scottish people. I hope that the Scottish National party will think again before it puts more jobs at risk in the Scottish economy.
Given that the right hon. Gentleman has now promised to be more open and accountable and govern differently, can we have a factual answer to the question of why long-term youth unemployment has risen by 32,000 in the last quarter and why it is now back to the level he started with in 1997?
That is completely incorrect. Long-term youth unemployment is down 75 per cent. since 1997. The hon. Gentleman himself went on television just before the Budget to congratulate us on our economic stability. Perhaps he should recognise that in his and other constituencies there are 2.5 million more people in work than in 1997. Together with economic stability and the growth in our public services as a result of new investment, that is a record on which he should congratulate us, rather than condemn us.
May I tell the Chancellor that there are more people working in my constituency today than there were 10 years ago when the Conservative party was in power? One sector is very important for the economy of Teesside: steel. Has he had any discussions with Tata management since the recent takeover of Corus by Tata Steel? If he has not, I urge him to talk to Tata Steel and give it any help and support that it wants to ensure that we have a viable, strong steel sector and that we can keep and protect the 3,000 direct jobs and 30,000 indirect jobs in the economy of Teesside.
I am grateful to my hon. Friend for being a champion of both the steel industry and jobs in his constituency. I have talked to Tata management since they bought Corus and they have assured me that they intend to invest in the steel industry in Britain for the future. The whole country faces the issue of building modern manufacturing strength for the future. Whether we are talking about aerospace, pharmaceuticals, information technology or steel, the issue is not manufacturing versus services; the issue is building modern strength in both services and manufacturing. I am sure that that is what we can go on to do.
It is obvious that employment growth, low claimant unemployment and general economic stability are among the Chancellor’s successes. In the same spirit of generosity, and since this is his last outing as Chancellor, will he acknowledge that there have been some mistakes in the past 10 years? They include, among other things, the London Transport public-private partnership, individual learning accounts, U-turns on film tax credits, company incorporation, operating financial reviews, the Treasury’s treatment of Railtrack, dividend tax credits, tax credit overpayments, rampant inflation in the housing market, widening inequalities in—
Order. The question is a bit narrow.
I am grateful to the hon. Member for Twickenham (Dr. Cable) for his customary generosity. If there have been mistakes, it is usually when we have listened to the Liberals. Does he now agree that it was a mistake for the Liberal Democrats to urge us to join the euro immediately and to oppose the new deal and many of the measures that have reduced child and pensioner poverty in this country? I think he would agree that, over the past 10 years, not only has personal wealth increased, but we have taken more people out of poverty—unfortunately, that is not because we listened to the Liberal Democrats.
The hon. Member for Sevenoaks (Mr. Fallon) mentioned youth unemployment. I am sure that the House agrees that we look forward to my right hon. Friend the Chancellor becoming Prime Minister. Will he confirm that he will support and advance the new deal that has been so successful in dealing with youth unemployment throughout the years?
Give him a job!
I am talking about jobs, and the jobs of young people in this country. It is one of the greatest misfortunes of the past 10 years that the Conservative party still insists on opposing the new deal, which has affected 2 million young people, and more than 1 million of them have got jobs. The Conservative party still opposes that opportunity, which should be available to millions of people. At some time, the Conservative party will have to make a choice: will it support opportunities for all people in the country, which requires us to have the new deal, or will it simply support opportunities for the few, as its obsession with grammar schools shows?
May I, too, join in congratulating the Chancellor on the remarkable achievement of surviving 10 years at the Treasury, even if it was twice as long as he wanted? On the question of employment and jobs, may I ask him about the biggest employer in the country, the Secretary of State for Health? This week, the Chancellor is reported to have said of her:
“I have to sit here while she loses me the next election.”
Can we take it, then, that she will soon be joining the record numbers of people who are economically inactive?
Our Government have invested more in the health service, with more results. When we came to power, there were 12 million people treated in accident and emergency; now it is 17 million. When we came to government, in-patient treatment rates were low; they are now high. When we came to government, 120 hospitals needed to be built, and we are building them. As for the shadow Chancellor, it is very difficult to listen to what he says on any one day, because he will usually have changed his mind by the next day, as he did on grammar schools. I understand that he has just given an interview to Glamour magazine. The interview has been issued with a free pair of flip-flops. He should take advice from the leader of his party, who said only a few days ago that we have a successful economy. He said:
“We’re incredibly fortunate, we’ve got the English language, we’ve got a successful economy.”
Why? Because we have a Labour Government.
At least I do not appear in glossy magazines talking about what I listen to on my iPod. My question was about the Health Secretary, and the Chancellor has just hung her out to dry. No wonder he writes books about political courage instead of appearing in them. The fact is that the NHS job losses, the ward closures and the crises are his doing, because it was his NHS plan, his Wanless report, and his money without reform. Does the anger that junior doctors feel about their employment prospects explain why one Downing street aide this week said of the Chancellor:
“I actually think…he’ll be the first prime minister to be carried out of No 10 by the men in white coats”?
Or was he getting at something else?
I have been up against seven shadow Chancellors in the past 10 years, but the hon. Gentleman is the only shadow Chancellor who never asks me about inflation, interest rates or the economy. Every time that there is a question about employment and economic activity, he wants to change the agenda. First of all, on the national health service, it is because we have invested twice as much in the NHS that we do not have the waiting times and waiting list crises that the last Conservative Government had. It is because we have managed the economy well that we are able to invest in public services. If he does not think so, why does he always say to business audiences outside the House—he knows that they have to hear the truth about it—that Labour has had great success on the macro-economy? Why does he have to admit that the Tories left the economy in a mess? [Interruption.] Oh yes. There were interest rates of 15 per cent. under the Conservatives in the 1990s. [Interruption.] Well, who was the political adviser to the Chancellor of the Exchequer in 1992? It was none other than the Leader of the Opposition. The Conservative party stands and falls on its economic record; we stand and succeed on ours.
Will the Chancellor accept that in the real world, a remarkable change has taken place in many regions throughout Britain? Nowhere is that better exemplified than in the coalfields. In the last month, we started a junction on the M1 with £14.5 million that was derived from having a good economy. That means that there will be another 8,000 jobs where there used to be four pits that were closed by the Tories. As for the man from the Opposition, my right hon. Friend the Chancellor should not worry too much about those who were educated at Eton, because they were all educated beyond their intelligence.
My hon. Friend does what the shadow Chancellor does not do—he asks questions about the economy. When it comes to the real economy, jobs are being created. Jobs that were lost, unfortunately, as a result of the policies pursued by the previous Government are now being replaced by new investment. My hon. Friend is one of the great sponsors of the new investment in his region and near his constituency. Now we are seeing, as he said, not only 14,000 jobs but another 8,000 jobs. We are creating more jobs, and moving the country further and faster to full employment, and that is the result of a Labour Government.
Savings Ratio
Households are benefiting from steady economic growth, and they are benefiting from low and stable interest and inflation rates. The level of household savings ratio since 1997 reflects that stability, with households having the confidence to reduce their contingency savings, unlike in the early and mid-1990s.
Will the Minister confirm that the household savings ratio is now one third of what it was in 1997, and is the lowest of any sizeable EU country? Can he explain why?
The UK is not unusual, as the savings ratio has declined in the United States, Australia, Japan and Canada, and is lower in the US than in the United Kingdom. The level of the savings ratio in the UK is broadly similar to the level in the 1960s, when there was also high employment, a stable economy and low inflation, so people had less need for the cushion of security that savings can offer.
The savings ratio for low-income householders and individuals has not moved much in the past 10 years, but a Government initiative—saving gateway phase one—has helped people, because it has provided assets for people on low incomes. The Economic Secretary will appear before the Treasury Committee next week, but will my hon. Friend have a word with him before then to extend saving gateway phase one, which is simple and has been well received, to ensure that people on low incomes increase their assets and play a more active part in the economy?
My right hon. Friend is right to draw attention to the importance of savings, and his Committee has consistently examined the issue. We recently completed the second pilot on the saving gateway, which shows promising signs of success. He will know that twice as many people hold the individual savings accounts that we introduced as their predecessors, personal equity plans and tax-exempt savings accounts. He will know, too, that one in four families and people on low incomes hold ISAs, which is far better than the performance of previous schemes. The savings ratio in the UK hit its peak at the very time that repossessions and negative equity hit their peak, and I can assure him that what we will not do is introduce economic policies that will drive us back to the point in the early 1980s, when an estimated 1.5 million households suffered from negative equity.
My constituent complains to me that when he chides his grown-up children for not making any savings they laugh in his face and call him a mug, because he saved and consequently lost not one but two pensions. He blames the Chancellor. Who does the Minister blame?
Clearly, the hon. Gentleman and I share the view that savings are important, so I am disappointed that he has not got behind the pensions reforms that the Government have introduced, the child trust fund and ISAs—all schemes that we introduced to raise the level of savings, particularly for the young and those on lower incomes.
Given the changes to demography that we are all witnessing, will my hon. Friend give the Treasury’s view of the report by Sir Derek Wanless, requested by the King’s Fund, about the cost of long-term care? Does the Treasury hold talks with the financial services sector about bringing together public and private policies so that we can have a range of financial products in which it makes sense for people to invest when they are young for their care when they are old?
My hon. Friend is an active and articulate advocate for stronger policies and support in that area. Following the Wanless report, and particularly in preparations for the comprehensive spending review, we are looking at precisely those areas.
An article in the Eastern Daily Press yesterday states that one in 10 East Anglian families cannot afford food or medicine, or risk eviction because they are
“too poor to pay rent”.
Research shows that that is due in part to poor financial management and inadequate saving. Does the Minister accept that he needs to do much more to encourage people on low incomes in constituencies such as mine to save money and learn how to manage their finances more effectively?
We need to do a good deal more not just in constituencies such as the hon. Gentleman’s, but right across the country. I hope that he will recognise the potential of the child trust fund, particularly alongside the greater education on financial affairs that we are looking to put in place through the education system. I hope that he and his party will be prepared to weigh in and support the efforts that we are making in that regard.
World Trade
According to the World Bank, full trade liberalisation could bring up to $300 billion of benefits and contribute to reducing world poverty. There must be no going back to protectionism. Reaching a Doha trade deal is a crucial step. Europe and America must urgently make progress on agriculture, and further offers on industrial goods by India and Brazil are needed. That would help both the developed world and developing countries.
Growth in world trade is manifestly crucial to the UK. The most recent statistics show that the UK has taken the lion’s share of foreign direct investment. What can my right hon. Friend do to ensure that regions such as the east of England continue to benefit from that?
I am grateful to my hon. Friend. Foreign direct investment in Britain from the rest of the world has been very high indeed. Of company headquarters located in Britain over the past 10 years, about 400 have been located from the rest of the world as regional or world headquarters to Britain. In France, Germany and Ireland the figure is fewer than 100, so we have done well. Maintaining our rate of growth in exports is crucial, as is maintaining business investment at a high level. It is by these means that we will maintain and extend the industrial and services sector of the economy, and hopefully bring additional jobs to my hon. Friend’s constituency.
Can the Chancellor tell us whether UK trade has been affected at all in recent years by the payment of bribes on defence orders? Can he give us an assurance that since the legislation banned bribes in 2002, there has been no Government connivance by any Department, including his own, in the payment of such bribes?
It was our legislation that banned something that had been a practice under previous Governments, and it was our party that led the way to making that change. On trade—I know the hon. Gentleman wants to know the figures illustrating the growth in trade—exports are growing by 6½ per cent. this year. We expect them to grow by 5¼ to 5¾ per cent. next year. That shows an economy that is far more balanced than in previous years.
My right hon. Friend has already pointed out the crucial nature of achieving a positive end to the trade round in Doha, but as the American congressional mandate runs out in July, how optimistic is he that that great prize can be claimed?
I am grateful to my hon. Friend, who has taken an interest in both the trade deal and in what is happening as a result of trade to developing countries. I believe that there is still a window of opportunity for a trade deal. A meeting of all the major negotiators is to be held next Wednesday, and it is incumbent on all the major parties—that is, Europe, America, India and Brazil—to see what they can do in the next few days to move matters forward. The failure to reach a world trade deal will allow protectionist forces to grow, and I hope there will be all-party support for pushing forward with moves that will make possible a trade deal in the not too distant future.
The Chancellor knows that one of the sectors in Britain that struggled most in world trade is manufacturing. When he took over, the manufacturing trade deficit was £7 billion. Last year it was £59 billion. It is hardly surprising that 1.25 million jobs in manufacturing have been lost in his 10 years at the Treasury. While he is in elegiac mode at the end of his term at the Treasury, can he explain whether that is a deliberate result of his policy, or whether it has been an accidental attack on British manufacturing, for which he would now like to apologise?
The hon. Gentleman is conveniently forgetting that in two recessions under the Conservative Government, not 1 million but 3 million manufacturing jobs were lost, and that manufacturing went down from 7 million to 4 million during the period of a Conservative Government. He also knows that in every advanced industrial country, a restructuring is taking place—in America, the rest of Europe and Japan—because there is a shift of manufacturing activity to China and Asia. He knows also that Asia is now out-producing Europe.
The question is which economies are going to adjust, modernise, reform and have modern manufacturing strength to enable them, if not to create additional jobs, to have additional wealth as a result of manufacturing industry. I believe that in aerospace and pharmaceuticals, in information and technology and the creative industries, and even in the modernisation of industries such as steel, we are showing that by high levels of investment—and now high levels of training, with apprenticeships and new people coming into these industries with skills—we can compete with the best in the world. I hope that there will be all-party support for building modern manufacturing strength.
Nearly 40 top international companies have their UK headquarters in Swindon, thus creating an economic powerhouse in our part of the south-west. Does my right hon. Friend agree that in the week when it was reported by the World Bank that Russia was on track for high gross domestic product growth and China’s trade surplus with the EU was nearly £160 billion, it is absolutely vital that, as Prime Minister of this country, he continues his strong economic record and work with the global economy?
I am grateful for the work that my hon. Friend does to bring new jobs and new industry to Swindon. As a result of the policies that are being pursued, the growth rate in Swindon has been higher than in the economy as a whole. I can assure her that we will not follow the failed policies of the Conservative party. We will not allow interest rates to get out of control, we will not allow inflation to get out of control, and we will not cut public investment in universities, in the new deal or in apprenticeships, as the Conservatives threaten to do. We will ensure that we have balanced economic growth in this country.
Tax Burden
This year’s Budget Red Book estimated that net taxes and national contributions were 37.2 per cent. of GDP in 2006-07. The Red Book also showed that that will stay below the peaks of the 1980s over the period ahead and well below the average for the EU 15.
This Chancellor likes to remind the House of historical context. Will the Chief Secretary acknowledge that over the past 10 years the Chancellor has introduced more than 100 new stealth taxes, doubling the tax code, raising more than £40 billion in extra tax each year, costing every family more than £1,300 each, and making every taxpayer have to work a week longer to pay for it? Is not he the biggest tax-grabbing Chancellor in history?
I am glad to be able to refute all that. Let me remind the hon. Gentleman that the ratio that I mentioned was lower in the 1970s. In the 1980s, it rocketed, and for most of the 1980s it was at a higher level than it is now. His historical comparison is therefore entirely misplaced.
Does the Chief Secretary agree that if there are 2.7 million more people in work and 700,000 new firms, all paying taxes, tax revenue will rise? Has not this Chancellor cut corporation tax and income tax to some of the lowest levels that we have seen in Britain and shown that 21st century socialism equals cutting taxes, and will he keep it up as Prime Minister?
My right hon. Friend is absolutely right. Not only are there more people in jobs and therefore paying taxes, but their earnings are up as well. Those are the results of economic success and the policies that my right hon. Friend the Chancellor has been pursuing over the past decade.
A recent YouGov poll said that the majority of Labour party members would like a higher tax band for higher rate taxpayers. Does the Minister agree with them, or does he think that they are wrong?
I can reassure the hon. Gentleman that the UK remains lightly taxed by international comparison. We are determined to maintain the approach that we have taken. It would have been helpful if he and his hon. Friends had been more supportive in the Finance Bill Committee of the measures that we have been taking to tackle tax avoidance, because that would have been a valuable step. What is true is that we have taken steps to put right chronic underinvestment in public services and will continue to do so.
On the balance of taxation, does my right hon. Friend agree with Nicholas Ferguson, chairman of private equity firm SVG Capital, who recently said that highly paid private equity executives paying less tax than a cleaning lady could not be right? Has he any measures in mind to assuage Nicholas Ferguson’s conscience—possibly raising the effective 10 per cent. rate that many partners in private equity firms currently pay?
I have seen the recent debate about the matter in the newspapers. My hon. Friend knows that we had a review on the subject in March, well before the recent public debate, and we await its outcome.
In 1997, the UK’s tax burden was lower than Germany’s by 6 per cent. of GDP. Ten years later, that competitive advantage has been lost as our tax burden overtakes Germany’s. That reflects a trend of Organisation for Economic Co-operation and Development countries cutting their tax burden while ours has increased. Given the economic challenges of the 21st century, will the Chief Secretary explain whether that helps or hinders the UK’s long-term competitiveness?
Let me begin by welcoming the hon. Gentleman to the Front Bench. The OECD comparison makes it clear that the UK remains a lightly taxed economy internationally. Enterprise and competitiveness in the UK have benefited hugely from the unprecedented decade of stability in the economy that we have just experienced. That is why the UK enjoyed more foreign direct investment last year than any other country in the world—certainly more than Germany. A brief examination of the economic record of this country and that of Germany in the past decade shows that ours is a great deal stronger.
My right hon. Friend referred to the Finance Bill Committee. I have served on six of the last seven Finance Bill Committees—[Interruption.] As a volunteer. Does my right hon. Friend share my experience that, in those Committees, the Conservative Opposition often made proposals to featherbed the rich and preserve their tax loopholes such as that of family trusts?
My hon. Friend served with distinction on all those Finance Bill Committees. He is right about the approach that Opposition Members have taken far too often.
No. 11 Downing Street
Every external organisation that uses No. 11 Downing street is required to meet in full the additional costs associated with holding the event.
Given that the householder is in the Chamber, one might think that he would want to answer for himself. However, perhaps the Chief Secretary can assist the House. We know that the Smith Institute has enjoyed the Chancellor’s hospitality on no fewer than 160 occasions in the past 10 years. Of the other 66 charities that used No. 11 in that time, which used it most often and on how many occasions?
The hon. Gentleman’s question was about the extent to which organisations had met the costs. As I said in my initial answer, the organisations pay all those additional costs. The 67 to which he refers on the Treasury website contract directly for catering and equipment. It is a similar arrangement to the one that applies in the Jubilee Room, with which hon. Members are familiar. It operates without difficulty.
This is carers week, the highlight of which for carers, young carers and the seven carers organisations that support them was being invited to a reception at No. 11 Downing street, which the Chancellor hosted yesterday. Given the contribution that carers make to the health and social care of this country, does my right hon. Friend agree that, in carers week, that was a most appropriate way in which to recognise what they give to this country?
My hon. Friend is right. My right hon. Friend the Chancellor appreciated the opportunity to address the carers who attended the reception. In every community throughout the country, carers do a fantastic job. The Government should congratulate and thank their representatives, as that reception made possible.
As one of the most costly events to the taxpayer held at No. 11 during the Chancellor’s time there must undoubtedly have been that at which it was decided to sell half of Britain’s gold reserves at rock-bottom prices, will the Chief Secretary inquire of his shy right hon. Friend whether he will be taking his cross of gold with him to No. 10 or will he leave it behind as a grim relic of disaster for his successor?
Let me give the hon. Gentleman a little reassurance that the European Central Bank was not one of the 67 charities that has used No. 11 Downing street over the past 10 years.
Will my right hon. Friend confirm that one of the most expensive events at No. 11 Downing street in recent years was on 16 September 1992, when the then Chancellor lay in a bath singing French popular songs, with future Leaders of the Opposition dancing in attendance? Will he confirm that the cost of that event to the British taxpayer was a minimum of £4,000 million? Was an invoice ever sent to Conservative party headquarters?
I think that my hon. Friend’s calculation is absolutely right. Sadly, the cost of that event was never refunded to the Exchequer and, also sadly, I fear that no Labour Member was present to see it.
Will the Chief Secretary confirm that the Treasury paid more than £11,000 for two seminars organised for its trustees by the Smith Institute, which was a donor to the Chancellor’s leadership campaign? Will he also confirm that it was only two years later, when the Charity Commission started asking questions, that the Treasury noticed that mistake? Will he now guarantee that all direct and indirect support for the Smith Institute from the Government has been properly declared and is in the public domain?
There has been no direct financial support or contribution to the Smith Institute from any Department of Government. I have one confession to make on this topic, however, which may be of interest to the hon. Gentleman. At the No. 11 children’s Christmas party this year, organised with the Booktrust charity, it paid for the invitations, the Christmas decorations and the food and drink—but it is true that the Treasury paid for the Christmas tree.
Banking Services
The Government’s goal is for everyone to be able to manage their money effectively and securely through a transactional bank account. Since the move to direct payment started in 2003, 98 per cent. of Department for Work and Pensions benefits are now paid into accounts, which is up from 28 per cent. in 1997. Of those paid into accounts, 79 per cent. are paid directly into a bank account, including a basic bank account and 19 per cent. into a Post Office card account—only 2 per cent. of payments are made by cheque.
I thank my hon. Friend for that reply. I have been contacted twice by a constituent whose benefits are paid directly into his account, but they have been paid late twice and he has been penalised by the bank for going overdrawn. Will my hon. Friend work with the Department for Work and Pensions to ensure that benefits are paid correctly and on time all the time? Does he share my abhorrence at the banks, which make millions in profits, skimming them off from the poorest members of our society when they go overdrawn, often through no fault of their own?
I know from our conversations that that is a particularly sad case and I am happy to take up the details with my hon. Friend and make contact with my DWP colleagues. Of the 680 million payments made by the DWP in 2006, only 21,000—0.0003 per cent.—were reported as either late or missing. In the minority of cases where that does happen, the DWP, if found to be in error, refunds in full any penalty charges that may result to the individual concerned. I also agree with my hon. Friend that when the banks are presented with the facts of this sort of case, they should act in a sensitive manner with respect to those individuals.
It seems clear that the big banks are not really interested in providing basic accounts. Is it therefore time to consider an enhanced role for the credit unions, or even the creation of a community banking network similar to that in the United States and in Europe, to provide that kind of banking service?
I do not think it fair to say that the banks are not interested. Since 2004, we have reduced the number of adults without a bank account from 2.8 million to 2 million. Part of the reason that we have been able to do that is the growth in the number of basic bank accounts being offered by the banks to lower income customers. The hon. Gentleman is absolutely right, however, that if we are to meet our goal of getting everybody a bank account, we need to do more, and to do it in new ways. That is why we are encouraging credit unions, in particular, to move into the current account banking market. There are now nine credit unions offering current accounts, including the White Rose credit union in Wakefield, the constituency of my hon. Friend the Member for Wakefield (Mary Creagh). We want to see more of that. We are also working with the banks to ensure that they help us to spread current account banking to more credit unions. That could be an effective way of spreading the habit of banking to the 2 million people in this country who still do not have a bank account.
One of the critical needs that everyone has is the ability to gain access to the money in their bank account free of charge. Following the initiative of the Treasury Committee in proposing an extension of free access cash machines to areas that currently lack them, I have proposed two in my constituency, in Midway and Hartshorne. Will the Minister tell us what progress has been made in extending the network of free access cash machines?
We are making really good progress. I would particularly like to pay tribute to the Chairman of the Treasury Committee, my right hon. Friend the Member for West Dunbartonshire (John McFall), for the personal leadership that he has shown in this area. I am hoping to be able to update the House next week on the progress that we have made. More than 400 new free ATMs in low-income areas have now been provided or are in the planning stage. That is two thirds of the way towards our goal, but there is still further to go. I urge Members on both sides of the House with low-income areas in their constituencies without a free ATM to contact either myself or my right hon. Friend the Member for West Dunbartonshire. We will contact the ATM organisers and the banks to try to ensure that we meet our goal of getting a free cash machine in every low-income community in the country.
In his opening response, the Economic Secretary to the Treasury said that he wanted everyone to have the facility to enable them properly to manage their money. Might it not help people to do that if Her Majesty’s Revenue and Customs managed its money properly, so that 300,000 people were not facing reclaims for child tax benefits?
It is important that we work with HMRC to extend the habit of financial literacy in our country. I commend to the hon. Gentleman the work that HMRC is doing on the child trust fund. There are now 2.6 million families with a child trust fund and, this September, the first tranche of schoolchildren to have such a fund will be starting school at the age of five. We are hoping to use that as an opportunity to expand financial literacy. We need to do everything that we can to help everyone who is challenged by money, including people who have difficulties with overpayments, and I am happy to work with HMRC to ensure that that can happen.
Does the Minister agree that we need to see more co-operation between the credit unions and the Post Office?
I agree with my hon. Friend. I recently met him and a group of other Welsh MPs to discuss the matter. At the moment, there are individual arrangements between credit unions and particular sub-postmasters, and we would like more of those arrangements to be established. As we discussed in our meeting, it is possible to access 25 different bank accounts at a post office, including 17 basic bank accounts, but if we can do more to get the credit unions to offer current accounts through the post office network, it would be a real step forward towards financial inclusion and genuine choice for the people in our country.
Inflation Rate
RPIX inflation averaged 3.7 per cent. in the first quarter of 2007, largely as a result of high energy prices and high food prices. It was down to 3.3 per cent. last month and independent forecasts expect inflation to be back at its target level by the end of the year. I hope that the hon. Gentleman will recognise that since the Bank of England gained its independence in 1997, the UK has had the best inflation performance for almost a century.
Alliance Trust recently reported that the poorest households in the UK face an inflation rate as much as a third higher than the average. That comes hot on the heels of Institute for Fiscal Studies research indicating a real increase in poverty in this country in the past year. Does the Minister share the concerns expressed by some of his colleagues running for the deputy leadership of the Labour party about the rising inequality under this Government?
One of the best and most important things for families, particularly those on lower incomes who aspire to be able to afford their own homes, are low and stable interest rates, which come with low and stable inflation. That is one of the reasons that this country now has 1.8 million more homeowners than in 1997, and it is the reason that we will not return to the sort of policies that we saw under the previous Government and that are advocated by the current Opposition. During the 18 years that they were last in power, average interest rates, for the entire period, were about 10 per cent.
Last year, disposable incomes rose at the slowest rate for nearly a quarter of a century, and yesterday the Office for National Statistics announced that, for the sixth month in a row, regular pay failed to keep up with inflation, so living standards fell again. The Council of Mortgage Lenders has now reported that homeowners are suffering the highest mortgage burden for 15 years. Does the Minister agree that life is getting much tougher for thousands of hard-working people after the Chancellor’s 10 years in office? People are already struggling with 101 stealth tax rises, and many of them are also hit by the chaos in the tax credit system.
The hardest burdens for many families to bear are interest rates that run out of control, which they experienced under the previous Government, and inflation running out of control, which they also experienced under the previous Government. In contrast, the consumer prices index of inflation remains low by historical standards, at 2.5 per cent.—incidentally, it fell by 0.6 per cent. last month. Consistent with the Treasury’s forecast in the Budget, and with the Bank of England’s May inflation report, independent forecasters expect inflation to return to its target level by the end of the year.
Financial Inclusion
As my hon. Friend is aware from my recent visit to his constituency, the financial inclusion fund is providing money advice in outreach locations, including Sure Start and other family and children’s centres, as well as in many credit unions around the country. Early evidence shows that outreach provision has been effective in bringing information on money matters and financial services to financially excluded consumers, particularly women.
The evidence from my constituency is that families previously torn apart by unemployment and drug addiction are increasingly strengthened and empowered by the Government’s financial inclusion policies, not least tax credits. As those policies and the children’s centres—which families can now use to raise aspirations—are undoubtedly the Government’s two greatest achievements, should not we bring the two together, not only to allow families increasingly to benefit, but to expose the fact that the Conservative party would remove both of them?
I completely agree with my hon. Friend. All around the country, Sure Start children’s centres are doing a great job in providing financial advice to lower-income consumers. Only a few weeks ago, in Ilkeston, I saw a credit union in a Sure Start centre that provided both debt advice and a much better way of saving for low-income families than the rip-off, Farepak-type savings schemes that we heard about last year. I agree with my hon. Friend that we should do everything that we can to defend Sure Start in our communities and to resist any attempt to cut back its budgets, which I fear would be the inevitable consequence of the third fiscal rule, which those on the Tory Front Bench continue to promote in order to pay for the tax cuts that they promised.
While the Economic Secretary is looking for outreach locations from which to promote financial inclusion, will he revise his opinion of the role of post offices in that matter? In his recent report, he described the Post Office card account as a barrier to financial inclusion, whereas it should be seen as a gateway to it. Will he work to ensure that the new contract for the Post Office card account goes to post offices, so that people in rural areas, especially, can continue to benefit from the financial inclusion that those vital public services offer?
The hon. Gentleman should know that we intend to spend £1.7 billion over the coming years to preserve the post office network and to ensure that thousands of post offices around the country continue to provide the services to which he referred. However, while we will continue with the Post Office card account after 2010, it is not a properly functioning account and does not provide the services that should be available to the lowest-income consumers. I would much rather people move on to either basic bank accounts or proper credit union accounts. However, we need to preserve the network to ensure that we can support the people in his constituency and in constituencies around the country who need to access reliable and local services.
The biggest barrier to financial inclusion is the very low level of understanding of basic financial services, yet there is very little in the way of teaching in our school system to increase that. What steps has my hon. Friend taken to discuss that matter with the Department for Education and Skills, and when can we look forward to having more pilots on developing such teaching in schools?
My hon. Friend is right that we need to ensure that we strengthen the way in which our schools curriculum can support financial education. In our report in January, we set out the steps that we will take, and I met ministerial colleagues in the DFES to take that forward. A particular opportunity for financial education will come from the child trust fund. In two years’ time, when every seven-year-old in our country gets an extra top-up into their child trust fund account of £250, or £500 for those from lower-income families, we will ensure that we take the opportunity to embed the proper teaching of financial education and financial literacy into our system, using the child trust fund as a real way to communicate that message to both young people and their parents.
Child Trust Funds
The child trust fund is available to all families in our country. So far, we have opened 2.6 million accounts, of which 75 per cent. have been opened directly by parents. We published constituency information in January and will be able to publish information on low-income families later in the year.
Given that it is more than two years since the child trust fund was launched, and that it is vital that the children of low-income families are the first to benefit from them, is it not disappointing that the Treasury still has no idea whether children from low-income families are indeed benefiting, and that the only general figures available to the Treasury indicate that one in four children do not take up that child trust fund? The Treasury should be doing more to ensure that those funds benefit low-income families.
The hon. Gentleman should know that every child is benefiting. Even in a minority of cases when an account is not opened by the parent, an account is opened by HMRC within the year to ensure that nobody loses out. We published the constituency information in January. I can tell him, as I am sure he knows, that 76 per cent. of families in his constituency actively opened the account. He is right to say that the take-up rate is higher in higher-income constituencies, and that the take-up rate is lower in lower-income constituencies. We need to redouble our efforts to increase take-up. As part of that, we have collected the information, which we will publish as soon as we can, to show exactly what the figures are. The reason we had a child trust fund week at the beginning of the year was to ensure that we raised awareness of the child trust fund among all families, including those on lower incomes.
I congratulate my hon. Friend, and my right hon. Friend the Chancellor in particular, on behalf of my son-in-law and daughter, who has just given birth to a bouncing baby boy—[Hon. Members: “Hear, hear.”] I thank hon. Members for that. May I point out that the 2 million people who do not have bank accounts are the same people who will not have the privileges that my grandson will have?
My hon. Friend is absolutely right. As I have said, there is a correlation between low-income families not having bank accounts and their not opening child trust funds. That is exactly why we need to ensure that low-income families can benefit from opportunities such as those that my hon. Friend’s grandchild will have. I congratulate him, on behalf of the whole House, on the very happy event that has just befallen him.
I call Mr. Selous. [Interruption.] Order. The hon. Member for Falmouth and Camborne (Julia Goldsworthy) should not show her displeasure when she is not called. It offends the Speaker.
Employment (Young People)
A total of 3.6 million 18 to 24-year-olds are now in employment, 11 per cent. more than in 1997. More young people are in higher education than ever before, and the number of young people claiming jobseeker’s allowance for more than six months has fallen by 70 per cent. since 1997, to just over 50,000.
Yesterday’s labour market statistics showed an increase in unemployment among 18 to 24-year-olds to 518,000, and a 20 per cent. increase in long-term unemployment among that group. Does the Chief Secretary agree that employers have a right to expect young jobseekers to be able to read and count, and that it is truly appalling that, according to the CBI, a third of employers have to teach those skills to new job entrants?
The hon. Gentleman omitted to mention that yesterday’s unemployment figures showed another sharp fall. The claimant count has been less than 1 million for six years—it was never less than 1 million under the 18 years of a Tory Government—and now it is below 900,000. Yesterday’s figures also showed that we have the highest employment rate among the G8 countries. Moreover, as I said earlier, more young people are in employment, and the proportion of 18 to 24-year-olds who are not in education, employment or training has fallen over the past 10 years.
There is more to be done on skills, but I hope that the hon. Gentleman welcomes the recommendations of the Leitch report, published before Christmas. We will make further announcements about that today, and our response in the form of an implementation plan will be published in a few weeks’ time.
The trend in general unemployment in central Ayrshire dropped significantly again this month, but there is one slight problem—the deficit in public service jobs. What progress has the Chief Secretary made in the context of the Lyons report and the dispersal of civil service jobs, with a view to giving more employment prospects to 18 to 24-year-olds?
I am very pleased with the progress that is being made in my hon. Friend’s constituency. As he will know, our target for the period up to April 2008 is for 20,000 jobs to move from London and the south-east to the regions. There have now been transfers to every region and country in the United Kingdom, and we are well on track towards our target. However, if there are specific opportunities for relocations in my hon. Friend’s area and if he draws them to my attention, I will ensure that the Office of Government Commerce, which is managing the programme, is made aware of them. We want to make certain that full advantage is taken of such opportunities.
Inflation Rate
As I explained to the hon. Member for Hornchurch (James Brokenshire), inflation has fallen in the past month. The consensus among independent forecasters is that it will be back on target by the end of the year.
Outside the retail prices index, energy inflation is hitting pensioners hard, especially those in Shropshire. What discussions has the Financial Secretary has with his colleagues in the Department of Trade and Industry, and directly with the utility companies, about the speedy passing on of any reduction in wholesale prices so that retail customers, particularly pensioners, need not suffer?
We monitor such matters closely. We are obviously concerned about the position of pensioners, especially poorer pensioners. Pricing and price changes are the responsibility of Ofgem—the Office of Gas and Electricity Markets—the independent regulator that we established for the purpose.
Not only has inflation in the United Kingdom been lower and more stable under the present Government than under past Governments, it has been lower and more stable than inflation in other major economies during the period in question, despite difficulties caused by increases in world oil prices. This Government have an outstanding record on inflation and macro-economic management. That is why there are 1.8 million more homeowners and 2.6 million more jobs in the British economy than in 1997.
What I remember about the first quarter of 1997 is that there was no Monetary Policy Committee and the Chancellor at that time artificially held down interest rates in a desperate and fruitless attempt to win the 1997 election. Did that not distort the economy, and does it not make the comparison asked for in the question meaningless? Is not the only real comparison the fact that the Conservatives failed and we have had 10 years of success?
That is precisely the principal comparison. Under this Government we have had low and stable interest rates, low and stable inflation and historically high levels of employment, and that has led to greater wealth in this country.
Business of the House
Will the Leader of the House give the forthcoming business?
Only one more to go, Jack.
No.
The business of the House for next week is as follows:
Monday 18 June—Remaining stages of the Mental Health Bill [Lords]—day one.
Tuesday 19 June—Conclusion of remaining stages of the Mental Health Bill [Lords]. It is also expected that a statement will be made on the Fulton and Hall reports into the hostage situation in Iran.
Wednesday 20 June—There will be a debate on European affairs on a motion for the Adjournment of the House.
Thursday 21 June—There will be a debate on armed forces personnel on a motion for the Adjournment of the House.
Friday 22 June—The House will not be sitting.
The provisional business for the week commencing 25 June will be:
Monday 25 June—Remaining stages of the Finance Bill—day one.
Tuesday 26 June—Conclusion of remaining stages of the Finance Bill.
Wednesday 27 June—Remaining stages of the Tribunals, Courts and Enforcement Bill [Lords].
Thursday 28 June—If necessary, consideration of Lords amendments, followed by remaining stages of the Concessionary Bus Travel Bill [Lords].
Friday 29 June—Private Members’ Bills.
I thank the Leader of the House for giving us the future business.
Today is Falkland Islands liberation day, marking the 25th anniversary of the liberation of the islands. I am sure that the Leader of the House will join me in encouraging all members to sign early-day motion 1685, tabled by my right hon. Friend the Leader of the Opposition to mark the courage of Her Majesty’s armed forces and to acknowledge the sacrifice of the 255 men who fell.
[That this House notes that 14th June is Falkland Islands Liberation Day; recalls the enormous courage and determination of Her Majesty's armed forces in liberating the Islands; pays tribute to the inspirational leadership of Prime Minister Margaret Thatcher who, with the support of Parliament, helped restore the Islanders' democratic way of life; remains resolutely dedicated to strengthening the historic ties between Britain and the Falkland Islands; reaffirms Britain's sovereignty over the Falkland Islands and her commitment to defend their right to choose their own future; and acknowledges with deep gratitude the sacrifice of 255 men who gave their lives for this cause.]
The motion is a reminder of the debt we owe all our armed forces for the service they have given, and continue to give, to our country.
The humanitarian situation in Gaza is grave, as fighting continues between Hamas and Fatah. Reports suggest that Hamas is now in control of almost the whole Gaza strip. That obviously has serious consequences for the middle east peace process. May we, therefore, have a debate on the situation in Gaza and on the peace process?
This week, Mahmod Mahmod and Ari Mahmod were convicted of the murder of Banaz Mahmod, a 20-year-old woman who fell in love with the wrong man. The human rights lawyer, Usha Sood, says that
“honour crimes are being perpetrated in the hundreds every year”.
The police say that there are as many as 12 honour killings in the UK each year. Miss Mahmod was clearly let down by the authorities, who failed to protect her from her father, despite several warnings. May we have a debate on how we can prevent these despicable crimes?
According to a study published today, hundreds of thousands of elderly people are suffering physical and psychological abuse, neglect and theft. The care services Minister has committed to new guidelines for handling cases of abuse. With an ageing population, the fear is that this terrible problem will become increasingly prevalent, so may we have a debate on how to protect vulnerable elderly people?
Ahead of the EU intergovernmental conference, the French President says that he has agreed
“the framework for a simplified treaty”
with the Prime Minister, and the German Chancellor says that the treaty will have the same “legal substance” as the failed constitution. Surely any treaty on the transfer of powers to the EU must be put to the country in a referendum, so may we have a debate on the circumstances required for a referendum?
I reiterate my request for a debate on home information packs. This week, the Secretary of State for Communities and Local Government and the Minister for Housing and Planning have got into another fine mess. Now, taxpayers’ money is being spent on subsidising the first home information packs, the Home Information Organisation is threatening to sue for billions of pounds, and the Government tell us that they have not even been able to find a legal definition of a bedroom, so may we have a debate on home information packs?
Finally, the Chancellor’s camp says that he is going to scrap the Department of Trade and Industry and create a Department for energy—but we have heard that before. Two years ago, the Government changed the DTI’s name to the Department for Productivity, Energy and Industry, but they changed it back again within days—I see the Deputy Leader of the House smiling—when they realised what the initials spelled out. I am too much of a lady to mention it in this House—[Hon. Members: “Go on!”] I am sure that hon. Members can work it out for themselves. The Lord Chancellor’s Department became the Department for Constitutional Affairs, and is now the Ministry of Justice. The Department for Transport became the DETR, then the DTLR, and now it is the Department for Transport again. But after all those changes, voters have seen no improvement in delivery. How much has that cost? In total, this Government have blown £2 million of taxpayers’ money on shuffling the Whitehall pack, so may we have a debate on this Government’s obsession with spin and presentation?
I endorse what the right hon. Lady says about the Falkland Islands. All of us, whether we were Members of Parliament or not, remember the dreadful events that led, in the end, to the liberation of the Falklands, and the terrible loss of life among British soldiers and personnel and, I may say, among Argentine personnel, most of whom were conscripts. As I have said before, those of us who were Members of Parliament recognise the steadfast courage and leadership shown by Margaret Thatcher. I salute that again, but above all I salute the courage and bravery of those who fell and of all who fought in that military action.
The situation in Gaza is indeed grave. Violence, whoever is causing it, provides no answer to the deep-seated problems in the occupied territories; nor does it provide any future. There is a heavy responsibility on Hamas and Fatah, and on the Government of Israel, to recognise, in their own separate ways, their responsibilities to work towards the only peaceful prospect for that area: a political process leading to negotiations and the fulfilment of United Nations resolutions. I will certainly bear in mind what the right hon. Lady says about the need for a debate and, I might add, a statement before that.
I note what the right hon. Lady says about honour killings. The term is a misnomer as there is no honour in those crimes, which are despicable, as are all murders and crimes that take place within families, regardless of the ethnic background of the people involved. It is our responsibility to ensure that the police, and the communities, do all that they can to ensure that such crimes do not take place.
The report published today on vulnerable elderly people is of profound importance. I am glad that it was sponsored by the Government, as it contains much food for thought about how we recognise the signs that vulnerable elderly people are being abused, and about what better measures we can take to detect those who abuse elderly people in the guise of family carers. The problem is very difficult to get at, but I hope that the report will generate a great deal of discussion and, in time, action too.
Unusually, the right hon. Lady is getting a bit ahead of herself with the EU treaty proposals. Nothing has yet been agreed. I am afraid that I was not privy to the discussions between President Sarkozy and the Prime Minister, but my right hon. Friend has set out his interpretation of them already. It is absolutely right for any British Prime Minister to engage in discussions with his opposite numbers in Europe. In the unlikely event—and it is becoming more and more unlikely—that the right hon. Member for Witney (Mr. Cameron) ended up as Prime Minister, I hope that he would do the same; otherwise he would be selling this country short. By the way, he would be assisted in his attempts to persuade Angela Merkel and Nicolas Sarkozy of his point of view if he decided to keep the Conservatives in the centre-right European People’s party, instead of attaching his party to a far-right rump currently occupied only by the very far-right conservatives in the Czech Republic.
If previous experience is anything to go by, I am sure that the Conservative party will find plenty of opportunities to debate a referendum on the EU constitution, but the real question is whether there would be any significant transfer of power from the UK to Brussels as a result of any treaty. When the matter was discussed before and after the 2005 election, I spelled out endlessly that much in the constitution works to Britain’s advantage. I suggest that the whole House examine the proposals on their merits, and not anticipate decisions that have not been taken yet.
The right hon. Lady asked about HIPs. In her statement in May, my right hon. Friend the Secretary of State for Communities and Local Government made it clear that HIPs for larger houses of four or more bedrooms will come into force on 1 August, and that they will be phased in for other properties after that. Moreover, I do not think that there will be any difficulty in determining whether a bedroom is a bedroom.
The right hon. Lady’s final question was about the changes of name of Government Departments. The Conservatives made changes to how Departments were organised—some of them perfectly sensible—but we are proud of the delivery that those Departments have been able to achieve since 1997. For example, Britain has, in many ways, enjoyed its best economic record since records began, and there are now 2 million more people in work and 760,000 fewer unemployed. Investment is at record levels, education standards are at record highs and we have had record improvements in the health service.
I am surprised that the shadow Leader of the House did not continue the leadership theme begun by the Leader of the Opposition yesterday. Perhaps the Conservatives have learned a lesson about that, because I was hoping to have an opportunity to give a wider audience to the blessed Simon Heffer of The Daily Telegraph—
He is a right-wing extremist nutter!
I think that the jury is out on that.
I am warming very much to what Simon Heffer says. The Daily Telegraph is the official organ of the Conservative party, and only yesterday he wrote:
“Where there should be policies, there are stunts. Where competence is required, there has been blithering obtuseness. And, all too often, such open wounds extend and join up with each other.”
How does the Leader of the House intend to ensure that correspondence from MPs on behalf of their constituents is not subject to public disclosure if the Freedom of Information (Amendment) Bill fails to make progress in the other place?
We are taking every step, in consultation with the Ministry of Justice and with a great deal of consideration by the House of Commons Commission and the Department of Finance and Administration in this place to ensure that it is made absolutely clear to public authorities that where they receive requests for the disclosure of correspondence that involves Members of Parliament, first, in every case the Member of Parliament must be consulted and, secondly, it is probable that in almost every case such correspondence is covered either by the exemptions, which are absolute in respect of confidentiality, or by data protection or by many of the other qualified exemptions within the Freedom of Information Act 2000. Detailed guidance has been drafted. I went through it again last night. Opposition Front-Bench spokesmen are also being consulted. It should lead to a better situation than we faced before. I underline that Members of Parliament, for very good reasons, are not public authorities and therefore are not subject to freedom of information legislation. That was agreed without argument eight years ago.
That guidance will be very welcome in explaining the position to authorities that do not understand the existing law.
May we have a debate on the decision of the National Institute for Health and Clinical Excellence to restrict access to lucentis and macugen for wet age-related macular degeneration? I recognise that NICE does a very necessary and difficult job, but often the methodology it employs seems better for assessing life-prolonging therapies than for those that enhance the quality of life. As a former optician, I am only too well aware of the awful devastation that can result from AMD. I hope that the House will discuss the matter.
Last week, I asked the Leader of the House about the Ministry of Defence’s involvement in the al-Yamamah affair. It is ironic that the United States Congress is taking more interest in the matter than the House of Commons. The Attorney-General has now written to my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell) saying that the decision to withhold vital information from the Organisation for Economic Co-operation and Development was taken by officials rather than by accountable Ministers—decisions that were politically inept and clearly unsustainable. I renew my request for a statement on the matter.
May I ask the Leader of the House to find time for a debate and the passing into law of the Corruption Bill, which finished its remaining stages in the House of Lords yesterday and would at least enable us to rectify the law?
May we have a debate on the draft Community Drivers’ Hours and Recording Equipment Regulations 2007? There were several unanswered questions in the Delegated Legislation Committee yesterday. The regulations remove the exemptions for rural bus services with a route of more than 31.6 miles. I know that the Leader of the House not only knows the south-west well but knows public transport well. He will know that if he were to catch the 632 service from Taunton to Yeovil via Martock, he would be all right because the route would be 30.3 miles, but if he caught the 54 service from Taunton to Yeovil via Long Sutton, he would not be all right because the route would be 31.8 miles. Is this not nonsense, and should we not revisit the regulations?
In respect of the first point, the hon. Gentleman comes to this issue with a great deal of professional expertise. All of us understand that age-related macular degeneration is a distressing condition for patients and their carers. We are committed to supporting the national health service to deliver improved eye-care services for patients. All primary care trusts are funding photodynamic therapy as a treatment for what is called wet AMD. I underline that what NICE has said is not its final guidance; the guidance has been issued for consultation and the Department of Health will respond in due course. I will make sure that the chief executive of NICE is aware of the hon. Gentleman’s view from his position of expertise.
On BAE, far from the matter not being discussed, it has been discussed at every recent business question time that I can recall, and at Prime Minister’s questions. The suggestion—the insinuation—by the leader of the Liberal Democrats that my noble Friend the Attorney-General ordered investigators to withhold information from the OECD is completely wrong. Instead of wriggling, the Liberal Democrat leader should apologise for making completely unsubstantiated allegations.
Secondly, if the Liberal Democrats are serious, as I think some of them are, about ending their 90 years in opposition and going into government—as a charitable sort of fellow, I have always seen it as part of my role to assist them along that path in whatever way I can—they need to think about the considerations that my right hon. Friend the Prime Minister had to take into account in making his judgment. The simple fact is that security and co-operation with the Saudis, which is absolutely fundamental not just to the middle east but to our safety in this country, would not merely have been threatened; it would have been undermined had we continued with an inquiry that, on the merits of the case, many of us believe would have proved abortive. There is no point in the hon. Member for Somerton and Frome (Mr. Heath) trying to pretend that it is not an issue—it is an issue for everybody in the House. The Conservatives, to their great credit, understand that, and I am just sorry that the Liberal Democrats try to avoid it altogether.
The third issue that the hon. Gentleman raised was the draft Community Drivers’ Hours and Recording Equipment Regulations 2007, which were, as he said, subject to considerable discussion in a Delegated Legislation Committee. I do not want the House to get the wrong idea; I know the south-west very well, I was just confused last week—unusually, let me say for the record. I am tempted to try the 632 and the 54, but I have always had a conscientious objection to getting on a bus with a Liberal Democrat, so I shall have to avoid that.
If indeed the Freedom of Information (Amendment) Bill is dead and, I hope, buried for ever, my right hon. Friend should be aware that if there is a genuine problem over the disclosure of MPs’ correspondence, I should support a measure that will deal with it. It is a pity that the problem was not dealt with at the beginning, rather than trying to exempt Parliament from freedom of information provisions. Perhaps the Data Protection Act 1998 should be considered with regard to MPs’ correspondence.
I am grateful to my hon. Friend for his conciliatory words. As the right hon. Member for Maidenhead (Mrs. May) knows, as soon as the issue was raised with me—by two Opposition Members who represent Kent constituencies—I took it up. I held meetings with them and the Information Commissioner, which involved the other parties, too, to try to sort through things. However, the difficulty that had arisen—not caused by the House or the then Department for Constitutional Affairs—was that public authorities were getting ready to issue correspondence without so much as a by your leave from Members of Parliament, still less any consideration of the exemptions that might apply. As there was not a word of argument about the fact that Members of Parliament, as Members of Parliament, should not be classified as public authorities for the purpose of the Act, such an action would have been very serious indeed and would have destroyed the relationship between Members and their constituents, which is fundamental to the way in which we operate on their behalf. That is the issue. If we can arrive by other means at the end that everybody sought, we shall all celebrate.
Has the Leader of the House seen the latest report from the Procedure Committee on corrections to the Official Report? Is he aware that a number of Ministers who inadvertently mislead the House still adhere to the obscure and unsatisfactory practice of putting a correction letter in the Library, which of course nobody sees? Does he know that the Procedure Committee is suggesting an innovation—that errors made in the Official Report should be corrected in the Official Report by way of a corrections page, published when necessary, for the benefit of Members, the public and the press? May we have a debate on the report next week? If not, will the right hon. Gentleman assure members of the Procedure Committee that he will take steps to implement its excellent recommendation as soon as possible?
The answer to the right hon. Gentleman’s key question is yes. I welcome the Procedure Committee’s report. He will know that I followed up the representations first made in the House about nine months ago by the hon. Member for South-West Bedfordshire (Andrew Selous) and others, and indeed spoke to the right hon. Member for East Yorkshire (Mr. Knight) about the suggestion. It is not satisfactory for Ministers either that corrections to the record are scattered through Hansard or are to be found in the Library by those who can scurry through letters in the Library.
The Government welcome the Procedure Committee’s sensible proposals that there should be a dedicated section of Hansard for corrections by Ministers in respect of any proceedings, oral or written, in the House, cross-referenced with the original error. I shall table a motion later today to allow the House to approve the Committee’s report with a view to its coming into force at the beginning of the next Session.
I do not know whether I am on or off message, but may I join the Prime Minister in calling for a wide-ranging debate on the relationship between politics and the media? It has long concerned me that good policies, such as home condition surveys, can be abandoned or bad policies adopted simply to placate the media. There should be more straightforwardness and transparency in the way we make our policy.
I warn my hon. Friend that he is in danger of getting the Chief Whip’s prize for loyalty—
For this week.
My hon. Friend the Member for Pendle (Mr. Prentice) raises a serious problem and I am glad he approves of what my right hon. Friend the Prime Minister said yesterday. The issue is serious not only for politicians on both sides of the House but for the press. I know from many serious political journalists that they, too, share the frustration felt throughout the Chamber and by many others about the way in which serious reporting of Parliament and politics is squeezed out in the ever-competitive scurry that leads to the dumbing down of newspapers.
Will it be possible to make time for a ministerial statement on the effectiveness of the child trust fund? Today, a Treasury Minister said that information would be made available about participation in the scheme by different socio-economic groups, but a Freedom of Information Act request shows that research already carried out states that
“those who open an account are considerably more likely than those who haven’t to be older (30+) and from higher social classes”.
Given that the research has already been undertaken, will the Leader of the House ask the Treasury to make a statement as soon as possible so that we can discuss the value for money and effectiveness of the policy?
I will certainly take that up with Treasury Ministers. There is always a problem in that the more articulate are readier to take up benefits, but that does not undermine the principle behind them. We have to ensure that everybody understands they are available and makes use of them.
This is a great month for engineers and engineering in the UK. We celebrate the 100th birthday of Frank Whittle, the inventor of the jet engine and, crucially, the Olympic Delivery Authority announced yesterday that its first construction project has been delivered on time and on budget under the stewardship of Howard Shiplee. When can we make time in the House to discuss the role of engineers and engineering and their contribution to our British economy?
I pay tribute to what the ODA has been able to do—I am chairman of the Cabinet Committee on the Olympics, and have therefore watched progress. We must make sure that progress continues, but projects could not be delivered without the fine service and great skill of British engineers. I shall certainly bear what my hon. Friend says in mind.
Although the police in our country face daily perils, for which I salute them, the tasks and hazards involved in making arrests and detentions in, say, Brixton pale in comparison with the tasks and hazards faced by our armed servicemen trying to arrest insurgents and terrorists in, say, Basra. It is desirable that there should be different legal jurisdictions for those activities, reflecting the very different circumstances. May I take it that that is still the Government’s view? If it is, what are they going to do about the House of Lords ruling that has applied the Human Rights Act 1998—on top of the tri-service discipline legislation and the International Criminal Court—to all the legal problems faced by our armed servicemen, thus putting them in an increasingly impossible position? I invite the Leader of the House to allow a debate on this subject. Is there any chance that a Minister will give a statement to the House at an early date?
The hon. Gentleman raises an important issue. My right hon. Friend the Secretary of State for Defence and the Law Officers are studying the judgment with care. As I understand it, the judgment indicated that the Human Rights Act applied in respect of British-run detention facilities in Basra, and not elsewhere. The House of Lords did not make a judgment on the merits of the particular proceedings initiated on behalf of Baha Mousa, who died while in British custody. That has to be the subject of a separate trial. We will consider the matter very carefully.
May I ask for a debate on pricing policies at UK departure points? I bring to my right hon. Friend’s attention early-day motion 1599, which has the support of all parties in the House.
[That this House expresses its concern that the British travelling public are treated as captive audiences at the UK's ports, airports and railway stations in terms of charging for goods and services; and calls on the Office of Fair Trading to investigate the pricing policies at these departure points on behalf of British consumers.]
The motion calls on the Office of Fair Trading to investigate why the British travelling public are seen as a captive audience when they enter an airport, an aircraft, or a train. Surely the travelling public have a right to know why they are being charged inflated prices at departure points throughout the UK.
My hon. Friend raises an important issue for retailers, as well as for Government. I will pass his concerns on to my right hon. Friend the Secretary of State for Trade and Industry.
Will the Leader of the House allow a debate in the near future on the hospital conditions at Selly Oak? It was my sad privilege last Saturday to visit Corporal Nick Davis from Newark, who lost his right leg and buttock in an incident in Afghanistan. Conditions of security were curious, but the staff were absolutely first class and our wounded heroes conducted themselves wonderfully. That is curiously at odds with the words of the hon. Member for Birmingham, Selly Oak (Lynne Jones), who said:
“The soldiers seem to want a little empire consisting of their own designated staff and facilities, a fiefdom.”
Will the Leader of the House join me in distancing himself from those disgraceful words?
I understand the concerns that the hon. Gentleman raises, and I pay tribute to all the staff at Selly Oak hospital, as well as saluting the courage of the very brave men and women who find themselves there. There will be a debate next Thursday on defence personnel, which will be a good opportunity for him to raise his concerns.
When can we debate early-day motion 1690 about the refusal yesterday by the Government to support a proposal to have a commemorative stamp on veterans day to mark the sacrifices of those who have been lost in Iraq?
[That this House notes the Government's refusal to support the proposal to issue commemorative stamps displaying the work of war artist Stephen McQueen on Veterans' Day, because that day's events are celebratory; and believes that the work, Queen and Country, which depicts photographs of 98 British soldiers killed in Iraq, printed in a stamp format, should be used for a commemorative issue on Remembrance Day to respect the wishes of the artist and the loved ones of the fallen soldiers and to provide a powerful reminder of the true cost of war.]
The stamp would be based on the work “Queen and Country” by the war artist Steve McQueen, which shows the portraits of 98 of those who have fallen in Iraq. If that cannot be done on veterans day—for understandable reasons, because the day is designed as a celebration of the work and sacrifices of soldiers—why can we not have a commemorative stamp on Remembrance day to remind us of the true cost of war?
I understand the basis of my hon. Friend’s proposal. There will be an opportunity for him, too, to raise that matter more extensively today week in the debate on defence personnel. That will be an ideal opportunity.
The Chancellor has been talking a lot recently about reforming the House and making Members of Parliament more accountable. Surely a good place to start would be by looking at the Scottish Member of Parliament and his role in the House. May I helpfully suggest that we try to resolve the issue consensually? Perhaps we could consider an all-party initiative to report to the House and make some recommendations.
I know that the hon. Gentleman, who is entitled to his view, wishes to see Scotland wholly detached from the United Kingdom. I do not think for a second that he has the support of the Scottish people for doing that. The role of Scottish Members of Parliament is the same as that of English, Welsh and Northern Ireland Members of Parliament. We are happy to have a debate with him at any stage about the nature of devolution, but he knows that this House is sovereign in respect of the whole United Kingdom, and that is why Members of Parliament, wherever they come from, deserve equal rights.
Has my right hon. Friend had any success in finding a date on which the Foreign Secretary can be here for a long-awaited debate on Zimbabwe? That is particularly important in the light of the view expressed by Chancellor Merkel last week that Mugabe should be invited to any summit between the European Union and the African Union.
As I made clear last week, we continue to seek to identify a date when the debate will take place. I have promised—and I continue to do so—that, God willing, it will take place before the summer recess. I recognise its importance and the impatience of my hon. Friend—and Opposition Members as well—when it comes to the urgent need to debate this issue.
As the right hon. Gentleman has such a proud record of ensuring that the flag of our country is flown on the parliamentary estate, may I draw his attention to early-day motion 1653, and ask him to raise the matter urgently with the Secretary of State for Culture, Media and Sport to ensure that this Saturday, for trooping the colour, the flag of the Falklands Islands, and those of all Her Majesty’s overseas territories and Crown dependencies, are flown from Horseguards parade?
[That this House looks forward to the 2007 Trooping the Colour ceremony on Saturday 16th June to mark the Official Birthday of Her Majesty Queen Elizabeth II; notes with pride that the flags of all the nations of the Commonwealth are already displayed in and around Horse Guards Parade in preparation for this great occasion; and calls on the Government to ensure that the flags of all Her Majesty's Realms and Territories are also flown in time for the ceremony, including Her Majesty's Crown Dependencies of The Isle of Man, The Bailiwick of Jersey and the Bailiwick of Guernsey and Her Majesty's Overseas Territories of Anguilla, Bermuda, British Antarctic Territory, British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Falkland Islands, Gibraltar, Montserrat, Pitcairn, Henderson, Ducie and Ocno Islands, St. Helena, Ascension Island, Tristan da Cuhna, South Georgia and the South Sandwich Islands and the Turks and Caicos Island.]
Does the right hon. Gentleman agree that it is bizarre that the flag of a republic such as Mozambique is flown, but the flags of British territories are not?
The hon. Gentleman raises a good point. I am not quite sure that I will be able to deliver that as quickly as he wants, but I will take it up.
On Saturday, the Cardiff-based Actors Workshop will be putting on extracts of a play called “The Lady of Burma” to mark the 62nd birthday of Aung San Suu Kyi, who is in her 12th year of house arrest in Burma. When may we have a debate to discuss what more the Government can do to end that deplorable situation?
Like the whole House, I pay tribute to Aung San Suu Kyi for her courage and forbearance in the face of a most terrible regime in Burma. We will certainly look for an opportunity to do what my hon. Friend seeks.
May we have an early debate in Government time on the two reports by Sir Hayden Phillips on party funding, neither of which has been debated in the House despite their importance to every hon. Member? If the right hon. Gentleman cannot promise a debate, will he give an assurance that, before his possible transfer elsewhere in Whitehall, he plans to bring to a successful conclusion the inter-party talks that he is chairing?
We did have a full discussion on the day of the publication of the Hayden Phillips report, on an oral statement that I made to the House. The right hon. Gentleman—he is normally well informed, and I am sure that he is well informed on this matter—knows very well that part of what was agreed between the parties was that Sir Hayden Phillips, not I, should chair cross-party talks on the issue, and those cross-party talks continue. I am sorry that, as I am not clairvoyant, I cannot predict when they will end.
Following the welcome statement on child sex offenders made yesterday by the Home Secretary, which has received universal support, may we have an early debate on child protection issues so that we can not just examine the excellent record of the Labour Government in the past 10 years in this area, but look seriously at the real challenges that we face in the future if we are to make our children even safer?
I pay tribute to my hon. Friend for his expertise and the way in which he has pursued the issue. We will certainly look for an opportunity to hold a debate.
In response to the question asked by the shadow Leader of the House about elder abuse, the Leader of the House said that he hoped that the report published today would stimulate discussion, and perhaps lead to action later. Given that the report shows that more than 342,000 older people are the victims of neglect, theft and even sexual assault, surely it is not a question of discussion; it is time for action. May we have a statement from the Department of Health setting out that action, and assuring us that it will go beyond simply reissuing the guidance that has so far failed? We should instead place on a statutory footing the measures that are necessary to safeguard vulnerable adults.
Of course there is a serious problem, but if my right hon. Friend the Secretary of State for Health had come before the House today and said, “A report has just been published; this is what we’re going to do”, the Liberal Democrats would have been the first to complain that we had not had a chance to digest the report and come to sensible conclusions on it. They need to get serious. Of course the issue is urgent, but the report is the first objective scientific assessment of the prevalence of abuse against the elderly. The prerequisite for effective action, which is what we all want, is to consider the report carefully, although as quickly as possible.
Next week is national markets week, and the all-party markets industry group is encouraging Members of Parliament to visit their local market to show their support. Will my right hon. Friend make time for a debate next week on the importance of markets in providing employment, strengthening communities, promoting healthy eating, protecting the environment and regenerating town centres?
I shall do my best—and I might add that I use Blackburn market, which is one of the best in the north-west, especially its very fine fish market.
Given the right hon. Gentleman’s remarks about the Union, will he arrange an early debate on the size of the Scottish block vote, so that we can consider the unfairness of English taxpayers having to pay for the cost of scrapping graduate tax, even though English students will not be eligible for that relief at Scottish universities?
That issue was settled in the devolution legislation, and I would like to hear from the hon. Gentleman whether the Conservatives now propose to go back on that. He should also be told that in the House, the English block vote completely outweighs the Scottish, Welsh and Northern Irish block votes by a margin of about 5:1, yet the House completely controls the size of the block grant that goes to Scotland. Devolution means difference, and I celebrate that, even if he does not. The truth is that there is no evidence that differences in fee regimes encourage more English students to study in Scotland, or deter significant numbers of Scottish students from studying in England. University applications in England are up 6 per cent. to the highest rate ever, and the proportion of applicants from lower socio-economic groups is up, too.
For the third week in a row, my right hon. Friend has failed to grant the House a debate on the future of grammar schools, so I shall change tack: will he allow us a debate on the future of secondary modern schools, and does he think that the 102,160 pupils who attend secondary modern schools deserve at least an explanation from the right hon. Member for Witney (Mr. Cameron)?
I do. I am sorry; I usually try to help my hon. Friend, and the House, but we continue to look for an opportunity to debate grammar school policy, as it is a really important matter. What people used to forget when they celebrated grammar schools is that 20 per cent. of children went to grammar schools, and 80 per cent. were labelled failures and went to secondary moderns. I am sorry that the hon. Member for Congleton (Ann Winterton) is not here, but as I agree with her, I hope that you, Mr. Speaker, will allow me to put on record what she told The House Magazine:
“The whole issue of grammar schools has been handled very badly indeed.”
I agree with that—and I say to the hon. Member for Buckingham (John Bercow) that she is not a “right-wing nutter” at all, but a Member of the House. I hope that there will be an opportunity for her to explain her views in more detail in the near future.
May we have a debate on the relocation of 70 Crown post offices to branches of WH Smith? In my constituency, consultation has started on proposals to move the Kirkintilloch post office, and I have no doubt that other areas face a similar situation. Given that the issue is causing a great deal of concern, is it not time that we had a debate in the House specifically on that major change to the post office network?
We have had plenty of debates on the subject, and my right hon. Friend the Secretary of State for Trade and Industry has been assiduous in coming before the House to explain the position, which is not one that any of us wished for. May I offer a bit of helpful advice to the Liberal Democrats? They have to think about the fact that in the past 10 years there has been increased use of the internet. It is now in 55 per cent. of homes, and people now use it when they used to go to the post office. Unfortunately, that has changed the market in which the Post Office has to operate. We have put £2 billion into subsidising the Post Office and helping it to deal with transitional problems.
May we have a debate on the disproportionate effect that debt has on the poor, especially with regard to companies such as BrightHouse, which specifically targets the poor and charges them extortionate rates of interest? The price of the goods is marked up to begin with, too. The poor sometimes feel that they have nowhere else to go, but they do: there are credit unions. Wearsidefirst is one such credit union in Sunderland; it offers hope and an alternative to millions of the poorest and most vulnerable consumers in the country.
I commend my hon. Friend for raising that important issue. I had a terrible case along those lines in my constituency advice service just last Friday, in which usurious rates of interest were being demanded from a poor lady. My hon. Friend is right, but I cannot make a promise about a debate, although we will certainly look for an opportunity.
The Department for Transport’s high-level output specification for the passenger railways is due to be published in July, and it will focus on reliability, safety and capacity. Naturally, those are important issues for every Member of the House, and Ministers have rightly declined to comment on them while the report is in preparation. Next month, will the Leader of the House provide time for a debate on the implementation of the document, before the recommendations can get buried in the long grass of the summer recess?
I shall certainly look for that opportunity. I might add that I have been encouraging my right hon. Friend the Secretary of State for Transport to include in the high-level analysis a recognition of the case for the doubling of the track between Blackburn and Bolton.
My right hon. Friend will know that I have raised the issue of violent video games on a number of occasions. Will he join me in condemning Sony for the publication of a new video game that depicts scenes of Manchester cathedral, without the permission of the Church authorities, in a game that is very violent and bloody? Will he join the Prime Minister in stating clearly that there is a responsibility beyond profit on those who produce such games? Can we ask Sony at least to withdraw the game and pay compensation to a Church charity, and may we have a debate on that important matter?
My right hon. Friend is right about the issue, and there has been totally unacceptable practice on Sony’s part. It has a moral duty to withdraw the game and make reparation to a Church charity, but it ought also to have some enlightened self-interest about the damage that it is doing to what was a reputable brand.
I welcome the fact that we are to debate defence next Thursday; that will give the House greater opportunity to celebrate the courage, bravery and professionalism of our armed forces, especially those serving in Iraq and Afghanistan. Can we make sure that the Secretary of State for Defence comes before the House with evidence about why we pay only £1.51 a day to feed our soldiers in the UK, and £2.63 to feed servicemen abroad? That money is not enough to feed our soldiers in the field, which is why so many servicemen’s families are sending high-protein products out to soldiers in the field, as the Government are not feeding them correctly.
I know about the hon. Gentleman’s experience in the forces; he was a member of the Grenadier Guards for some years. The Ministry of Defence is clear that the allowance for UK-based forces is significantly above that for dogs, and so it should be. That is the information with which I have been provided—[Interruption.] Army dogs. Army dogs have to be fed, too—[Interruption]—as the hon. Member for Buckingham will understand.
I didn’t say a word!
Okay. That is unusual, because the hon. Gentleman normally provides a running commentary on everything I say. The hon. Member for Hemel Hempstead (Mike Penning) was certainly talking about Army dogs in the Daily Mail yesterday. [Interruption.] If I missed the point of what he was saying, I am sorry, but I thought that he was continuing what he said in the Daily Mail yesterday—[Interruption.] Well, I could be forgiven for thinking that he was.
We are all concerned about the fact that our troops need to be properly fed. We may have different anecdotal evidence, but I know a number of people who have served in Iraq—
I have been there.
I have, too. Although those people were concerned about many things, they were not concerned about the food. None the less, the hon. Gentleman can raise that subject next week in the debate.
In 17 days’ time, we shall see the banning of smoking in public places, which is an enormous leap forward in the prevention of smoking-related disease. However, there is still an awful lot to do. In the 48 minutes that business questions have lasted so far, 12 of our citizens have died of lung disease. Today, in the middle of “breathe easy” week, which was organised by the admirable British Lung Foundation, will the Leader of the House announce that we will have a debate in the House on lung disease? There is a shortage of respiratory specialists and community support, and death rates have remained stubbornly high for a generation, so there is an awful lot more to do. I am sure that, as a Government, we will take further steps to tackle that continuing problem.
My hon. Friend is right to raise that important issue. We have done a very great deal. My right hon. Friend the Secretary of State for Health has been in the vanguard of ensuring that the ban is introduced, which has already led to change in public attitudes and to much greater consideration by those who smoke of the importance of no longer smoking. We will certainly look for an opportunity for a debate.
The Leader of the House will have noted in today’s Financial Times a report that the Chancellor’s chief fund raiser, Sir Ronnie Cohen, who is also a leading figure in the private equity world, believes that the Government should change a tax loophole by getting rid of the taper on capital gains tax. Should not the Chancellor come to the House next week to let us know what he is doing on that issue—or would it be better for us to wait until the end of the month for the Leader of the House to do so himself?
The Chancellor has just appeared before the House for a whole hour. It is a very important issue, and I understand that the Treasury Select Committee is considering it.
Could we have an urgent debate on the Chicago convention on international civil aviation, because the only way in which we can reconcile repeated ministerial statements that the Government have no evidence of detainees being rendered through the United Kingdom with the evidence collected by the Council of Europe and the European Parliament—the most recent instance was on 2 June at Mildenhall—of prisoners being rendered through the UK is by reference to a loophole in the convention whereby the US Government are not obliged to inform the UK Government if they are rendering prisoners through UK territory? That is a stain on us.
indicated dissent.
It is: if prisoners are rendered through UK or European airspace, that is a stain on us. I have to tell the Leader of the House that one of the things that have lost the war for the United States is Guantanamo Bay and the issue of civil rights, so can we have an early debate on the Chicago convention?
The reason why I shook my head is that I made it clear in a statement in December 2005 that Ministry of Defence records, which were examined with the greatest care, showed that there was absolutely no evidence of any cases of rendition having taken place through our airspace or our airports—none whatever. Despite extensive inquiries by the European Parliament and others, they have not been able to produce any evidence whatever. I shook my head because, uncharacteristically, the hon. Gentleman was giving force to wholly unsubstantiated allegations. It is my belief, on the basis of the most substantial examination, that apart from the two cases, of which I informed the House, and which took place in 1998 in entirely justifiable circumstances and are on the public record, there has been no rendition through the United Kingdom. If he thinks about it for a second he may realise that if there had been, there might have been a scintilla of evidence from somebody somewhere at a British airport saying that they had spotted something. There has been no such evidence, nor do I believe that the United States would have broken clear understandings with us and done this without our knowledge.
Could we please have a full-day debate in Government time on the Floor of the House on the role of the Back Bencher and the use of non-legislative time, given that both those important topics fall within the scope of current inquiries by the Select Committee on Modernisation of the House of Commons, so ably chaired by the Leader of the House himself, and the fact that we need to decide how to improve the means of scrutiny and the opportunities for representation? Will he take it from me that it would be cruel beyond endurance, both for him and for the House, if he were denied the opportunity to listen and respond to a full-day debate on those matters before he moves to pastures equally lush?
I know of no pasture as lush as that of Leader of the House. If anyone aspires to the position, may I tell them it is a great job? We will leave to one side what will happen, or will not happen, in future—you never know. The hon. Gentleman gave evidence to the Modernisation Committee, on which I commend him. We have concluded our report, and it should be published shortly. I hope and believe that there will indeed be a full debate, as he proposed. Improving the role of the Back Bencher and the use of non-legislative time is of profound importance to the House.
A constituent of mine was set upon by a group of thugs in a vicious assault, and ended up in hospital for more than a week. The Northamptonshire police did a very good job, and arrested the alleged culprits. The Crown Prosecution Service did its job, and the case went to the magistrates court. However, when it reached the Crown court, the defence lawyer pointed out that there was an error on a form—a court clerk had misrecorded something that the judge had said—and the case was dismissed. The Northamptonshire Evening Telegraph—a fine paper in my constituency—has taken up that case under the banner “Rough Justice”. Can we have a statement or a debate to clarify the reason why clerical errors apparently allow justice not to be done?
The hon. Gentleman will forgive me if I do not comment specifically, as I know no more about that case than what he has told us, but it sounds as if it is a serious matter. Discretion rests with courts to deal with non-material errors without having to require acquittal in certain circumstances. I will pass on his concerns to my right hon. Friends the Attorney-General and the Secretary of State for Justice. If the hon. Gentleman can provide me with more information, I will follow this up.
Can we go back to the issue of Crown post offices? We should have a full-scale debate in Government time on the closure programme. Is the Leader of the House aware of the anger and dismay in King’s Lynn about the fact that services housed in a great historic building are to be moved to a nondescript counter in WH Smith? Despite what he said the other day about the public not using those services, people use that building regularly, so what can he do to help hon. Members on both sides of the House to make the Post Office and the Department of Trade and Industry see sense?
Of course I understand the concerns that arise when those changes take place, but the Post Office and my right hon. Friend the Secretary of State for Trade and Industry face a dilemma that must be shared with the House. How is it possible to maintain the viability of the Post Office when the internet has led to a significant reduction in personal mail as a result of e-mail, and in over-the-counter transactions at post offices because people can now, for example, renew their road fund tax on the internet, rather than going to a post office? That dilemma affects all of us. I understand the anxieties expressed by the hon. Gentleman’s constituents—as he knows, I am familiar with the main post office in King’s Lynn—and I shall certainly pass on his concerns to my right hon. Friend.
I want to take the Leader of the House back to the question raised by my hon. Friend the Member for North Essex (Mr. Jenkin) about the House of Lords judgment. It is interesting that the Ministry of Defence was quoted in today’s press as saying that the ruling changed nothing, and that it was a helpful clarification. That raises the question why the MOD appealed the matter to the House of Lords in the first place. I listened carefully to the response from the Leader of the House, who said that the Law Officers and the Secretary of State for Defence were reviewing the judgment carefully. I do not think I heard him say—it would be helpful if he could clarify this for the House—whether, once they have completed that consideration, the Law Officers, the Secretary of State or both will make an oral statement to the House to set out the current legal position of our service personnel when operating abroad.
My understanding is that it was not the Ministry of Defence, but the family, who appealed to the House of Lords. That is how the case ended up there. I will pass on the hon. Gentleman’s concerns and alert my right hon. Friend to the fact that the hon. Gentleman is likely to raise the matter in the debate that takes place a week today.
May we have an urgent statement from the Minister for Industry and the Regions about the proposed closure at the end of this month of the Kettering Business Venture Trust, and the role of the East Midlands development agency in its demise? KBVT has been helping local businesses start up over the past 22 years, creating thousands of jobs in and around the Kettering constituency. When 43,000 new jobs are required in north Northamptonshire in order to comply with the Government’s sustainable communities plan, the loss of KBVT comes at entirely the wrong time. The Government should step in urgently and save this worthwhile local enterprise agency.
The hon. Gentleman will appreciate that I have no briefing on the subject, as it is a question without notice. I understand the concerns that he expresses and I will make them known to my right hon. Friend the Secretary of State for Trade and Industry.
Points of Order
On a point of order, Mr. Speaker. During business questions I named the hon. Member for Birmingham, Selly Oak (Lynne Jones) without having informed her office beforehand. I have been in the House long enough now to realise that that was a mistake, and I apologise to the House.
I thank the hon. Gentleman for his apology. I would add that he also did not take the trouble to contact me to check whether the comments attributed to me, which were taken directly from a Sunday tabloid, were accurate. I wish to inform the House that the comments attributed to me in no way reflected the lengthy conversation that I had with the reporter involved. I am just as concerned as any Member of the House to ensure that our armed forces receive excellent medical treatment, which they are receiving at the Royal Centre for Defence Medicine at Selly Oak. They are receiving treatment at the cutting edge of what is available, healing wounds that in the past would never have been able to receive treatment. I hope that the inquiry by the Defence Committee will reflect—
Order. If I may stop the hon. Lady, she has put the record straight.
On a point of order, Mr. Speaker. As a humble Back Bencher, may I seek your assistance and advice? With the aid of the Table Office, I have for some time been trying to find out how much the Ministry of Defence spends on feeding Ministry of Defence dogs. With the aid of the Table Office, I received an answer on 5 March which stated:
“The information requested is not held centrally and would vary depending on the breed . . . of the dog.”—[Official Report, 5 March 2007; Vol. 457, c. 1648W.]
We tried again, with the aid of the Table Office, and on 23 March I was told that I could not be given the answer as the cost would be disproportionate. Last night a very good journalist from the Daily Mail phoned the Ministry of Defence to ask the question, and 15 minutes later received an answer—an answer that we do not believe, but the journalist was given an answer. Is it not disrespectful to the House if we do not get answers to questions, but journalists do in 15 minutes?
Order. Just before the Leader of the House answers, may I say that it is disrespectful to the House and disrespectful to a former Grenadier guardsman that such answers should be given. I hope we can find out how much it costs to feed Army dogs.
The hon. Gentleman raises an important issue. I have some information, though not all of it. I am happy to provide him with the information that I have, and I will also follow up the point that he raises. Let me make this clear, and I am sure I speak for my right hon. Friend the Secretary of State for Defence: if information can be made available to the press, it ought to be made available to the House.
DIGITAL SWITCHOVER (DISCLOSURE OF INFORMATION) BILL (PROGRAMME) (NO.2)
Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(7) (Programme motions),
That the following provisions shall apply to the Digital Switchover (Disclosure of Information) Bill for the purpose of supplementing the Order of 18th December 2006 (Digital Switchover (Disclosure of Information) Bill (Programme)):
Consideration of Lords Amendment
1. Proceedings on consideration of the Lords Amendment shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement at this day’s sitting.
Subsequent stages
2. Any further Message from the Lords may be considered forthwith without any Question being put.
3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement. —[Liz Blackman.]
Question agreed to.
Orders of the Day
Digital Switchover (Disclosure of Information) Bill
Lords amendment considered.
Clause 5
interpretation
Lords amendment: No. 1.
I beg to move, That this House agrees with the Lords in the said amendment.
On Report the House agreed to an amendment to extend the Bill to information held by local authorities on registered blind and partially sighted people. The amendment was in response to representations made by the Digital Switchover Consumer Experts Group and to amendments tabled by Opposition Members in Committee.
The definition of “local authority” in the amendment needs further clarity to avoid ambiguity, as it could be read as excluding metropolitan district councils in England. The amendment clarifies that. It may also be helpful if I give further clarification on the progress of the scheme. On 30 April, we and the BBC reached agreement on the terms of the help scheme and—
Order. I must point out to the Minister that this is a debate on the amendment, rather than a general debate.
I am grateful for your advice, Madam Deputy Speaker.
On a point of order, Madam Deputy Speaker. Without in any way seeking to challenge your ruling, it would be helpful to the House if the Minister could, en passant, refer to the progress that is being made.
The ruling that I have given the Minister applies to all other Members as well. The debate is on the amendment.
Therefore, Madam Deputy Speaker, with your expert guidance, and in the interests of brevity, and complying totally with your implicit and explicit wishes, I commend the amendment to the House.
The House will now, unfortunately, not be treated to the full-length disquisition on the merits of the Bill that I had prepared, as I shall speak only to the amendment.
As the Minister might have said if he had decided to speak at greater length about the amendment, it is an important technical drafting amendment. As the House is aware, clause 1(3) allows local authorities to give visual impairment information to the BBC or to the Secretary of State in order to allow assistance to be given to the visually impaired for digital switchover. As we understand it, in many areas it is a county council that holds this information, so it is the body covered by the definition of a local authority. In some areas, however, it is a district council that holds the information on those with visual impairment. The Bill needs to take account of that. Clause 5(1)(ii) referred to
“a district council for an area in relation to which it has the functions of a county council”.
In his opening remarks the Minister was not clear about the need for this technical change, so perhaps I could illuminate the House in case any hon. Members wish to tease out some of the technical details. The original amendment tabled by the Government would have adequately covered the definition for shire areas with two-tier systems. However, the problem arose because although some metropolitan district councils are the relevant authority, it could be argued that they do not have the functions of county councils. The definition was therefore changed to:
“a district council, other than a council for a district in a county for which there is a county council”.
That is a very important technical change. [Interruption.] I think that the hon. Member for Bath (Mr. Foster) used the word “boring”. I disagree with him on that; I would say that it is interesting, although it could be made more so. I could discuss Roman governance systems, as I did at length in Committee, but that might make it too interesting.
This is a very important change, because there may have been confusion with metropolitan district councils—that is, virtually all unitary authorities not covered—if they were deemed not to have the functions of a county council. In order to help hon. Members to understand the technical and important nature of the amendment, the Minister could have pointed out that a similar amendment was made in the Public Bill Committee to the Local Government and Public Involvement in Health Bill, and that this technical change will bring the definition of a local authority into line with the corresponding provisions of that Bill. I think that that is correct, but I would be grateful for his guidance.
You have made the important ruling, Madam Deputy Speaker, that we cannot discuss—nor should we—the other issues to do with digital switchover, so focusing solely on this technical amendment I should like to ask the Minister a number of questions.
I understand and accept the ruling from the Chair, but we would all like to know what the Minister was about to tell us when it was decided that he would be out of order. Will my hon. Friend urge him to impart that information in another way, perhaps by placing a letter in the Library or by making a written statement to the House at a later date?
I hear what my right hon. Friend says. In Committee, we pressed the Minister to put into the Bill a mechanism whereby the Government could report back regularly to the House.
The Minister promised—I do not know whether this is in the spirit of the earlier remarks by the Leader of the House—to take me to Whitehaven to see digital switchover in action, but that promise has not been fulfilled. I await a trip to Whitehaven with him to see what is happening on the ground. Having placed in the House copies of the agreement with the BBC, it is important that he writes to the shadow Secretary of State for Culture, Media and Sport or places in the Library a letter bringing us up to date with digital switchover.
I hope that the hon. Gentleman is not just going to leave it at the shadow Secretary of State, as all Members present are clearly showing an interest in this matter. The amendment will change the range of people who will be identified for assistance through the targeted help scheme. Although the ruling by Madam Speaker means that we cannot hear about progress for all those people, does he agree that it would be helpful to hear what progress is being made in providing help to the new group of people who will be covered as a result of the new definition in the amendment?
The hon. Gentleman makes the excellent move of promoting Madam Deputy Speaker to Madam Speaker, no doubt in order to incur her good will when he rises to speak on the amendment. May I also congratulate him on his bravery in wearing the Olympic logo—
Order. I am sure that the hon. Gentleman knows that he is straying wide of the amendment; he does not need me to correct him.
I am grateful, Madam Deputy Speaker.
To give credit where it is due, the hon. Member for Bath first raised the issue of local authorities when we discussed the Bill previously. As an expert on this, he rightly points out that the definition of a local authority widens the range of people to whom assistance will be given. Perhaps the Minister could elucidate on that.
My hon. Friend is doing an excellent job in explaining the amendment given that the Minister was unable to do so. Does the change in definition give rise to a danger that it will exclude other authorities such as unitary authorities or other types of authority that may come into existence in future? Should it not be slightly broader to enable such authorities to be incorporated without yet another amendment?
My hon. Friend makes an excellent point. That was one of the three questions that I was going to ask the Minister. Is he confident that the amendment’s definition of a local authority will withstand any future reorganisation of local government? As my hon. Friend is well aware, the Government have put forward a White Paper on local authority reorganisation. In my own county of Oxfordshire, we have had a long debate about reorganisation prompted by the Government, forcing us to spend money that could have been much better spent on council services. That particularly applies to Labour-controlled Oxford city council, which profligately spent hundreds of thousands of pounds on considering becoming a unitary authority.
Order. Once again, may I remind the hon. Gentleman of the narrowness of this debate.
I am grateful for your guidance, Madam Deputy Speaker.
My question to the Minister is simply this: is he confident that, should the Government ever get round to their long-awaited local authority reorganisation, this definition will stand the test of time, or will we be forced to amend the Bill again to accommodate new definitions of a local authority?
I would like a little more information about how many people will be affected by the change. Do we have a list of the relevant local authorities? Many Members may not know that the amendment could affect their constituents. That information should be in the public domain.
My hon. Friend is absolutely right. When the Minister writes to me about digital switchover, it might be helpful if he writes to all hon. Members detailing specifically which councils covered by the amendment have the relevant information, so that when their constituents contact them with concerns about switchover they know which council they should contact in order to assist them.
Clearly this will be a key issue. Many Members will have visually impaired constituents coming to them wanting assistance. It is therefore important that the information should be widely disseminated, specifically in the Library. I hope that when the debate is over a little more information will come into the public domain.
My hon. Friend is right to say that it is a crucial matter. I do not have the statistics to hand about the average number of visually impaired people per constituency, but it will be a significant number, and by definition they will require assistance from their local authority. It is therefore essential that hon. Members are fully informed about the amendment’s implications for their local authority.
Let me turn to another aspect, which is covered in the explanatory notes on the Lords amendment. Paragraph 8 states:
“The amendment is not expected to have any financial effects.”
Any hon. Member with even a modicum of common sense would realise that that cannot be an accurate statement. The amendment brings into the scope of the Bill a wide range of local authorities, particularly metropolitan district councils, which might not have expected to be included before it was passed. It will clearly have financial implications for them in terms of their providing information on financial assistance to the visually impaired. Yet the explanatory notes state baldly that it is not expected to have any financial effects.
If a district council that picks up this responsibility does not already hold the data and is not in a position to assist because it was not expecting to, there must be some form of financial implication for it, even if it is allocating to one person the job of looking into these matters and discovering where the subscribers or non-subscribers might be.
My hon. Friend is right. When the Under-Secretary was questioned about the matter in Committee, he skirted around the cost implications. Indeed, he implied that local authorities could absorb the cost in their normal functions. That cannot be the case. Digital switchover has been described as the largest civil project in this country for 30 or 40 years. Bringing local authorities within the scope of the Bill by accepting the amendment, which would bring metropolitan district authorities within its scope, has serious financial implications. I hope that the Under-Secretary will deal with that when he responds to my remarks and those of the hon. Member for Bath, who is the expert on the matter after drawing it to the House’s attention.
Is my hon. Friend satisfied with the amendment? It appears to me that it might be defective because, as I read the amendment and the Bill, the amendment relates only to councils in England. What happens in the case of a local government reorganisation in Scotland? Surely the amendment should cover all parts of the United Kingdom.
My right hon. Friend is a vastly experienced Member and, I suspect, a much better lawyer than me, although I trained and qualified for the Bar many years ago. I confess that I was hitherto unaware of his point. Clause 5(1)(c) states that local authority means
“in relation to Scotland, a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994 (c. 39)”.
Given that I am not an expert in local government matters in Scotland, I take my right hon. Friend’s point about possible local authority reorganisation there.
During the Bill’s progress, the Under-Secretary has generously invited hon. Members on occasions to Whitehaven, the first area that will be affected. Does the narrow amendment affect Whitehaven? If we are to visit that area, should we visit other areas to which the narrow amendment applies to ascertain whether it will have a material effect on constituents there?
My hon. Friend makes an excellent point about the effect of the amendment on the progress of digital switchover. As colleagues obviously know, we continue to debate the measure, which has not yet received Royal Assent, but digital switchover continues. We were unable to hear about its progress today, but it is interesting that no legal powers yet exist for Whitehaven district council to share information on the visually impaired. It would be interesting to know how digital switchover is progressing given that Whitehaven does not have requisite powers.
The hon. Gentleman makes an important point. If we agree to the amendment, although it means that the information will legitimately be obtained from Whitehaven council, the people of Whitehaven will not be told that they are eligible and provided with support; they will have to write to say that they believe themselves to be eligible. Does he agree that, if the amendment is accepted, it should still be possible to identify the people who are in need of help and ensure that they receive it in time?
I hope that that is the case. The hon. Gentleman makes an excellent point about the need for speed in ensuring that the people of Whitehaven, who are the pioneers of digital switchover, are adequately taken care of. However, I stray from the narrow amendment and I must refocus on it.
As I said to the Under-Secretary, my chief concern is whether the amendment is sufficiently robust to accommodate the future changes to local authority structures that the Government undertake. Cost implications are my second concern, given that the explanatory notes state that there are none.
My right hon. Friend the Member for East Yorkshire (Mr. Knight) mentioned Scottish local government reorganisation.
We could, by bouncing the amendment back, give the Lords or the Government the opportunity to review it in the light of the fact that it might be better to deal with those matters in a statutory instrument rather than in the Bill. It may therefore be worth considering rejecting the amendment.
I must tell my hon. Friend that we have decided to accept the amendment because it affects an interpretation clause. As I said when I explained— perhaps more fully than the Under-Secretary—the reasons for the technical amendment, we need to ensure that metropolitan district councils are covered by the Bill. However, my hon. Friend’s point is well made in the light of my constant attempts and those of the hon. Member for Bath to ensure that the House gives digital switchover sufficient scrutiny.
How does the amendment relate to the publication of the digital switchover help scheme? The Department for Culture, Media and Sport published it on 4 May 2007 and it details the agreement between the BBC and the Department on digital switchover. The Under-Secretary has probably memorised the document and he knows that it refers to a policy review group, which includes the Department for Culture, Media and Sport, the BBC Trust, the executive board of the BBC, the Department for Work and Pensions and Digital UK. The hon. Member for Bath encouraged the Under-Secretary to include local authorities because of their knowledge of the data about visually impaired people, and he has presented an amendment that specifically relates to metropolitan district councils, yet local authorities are not included in the policy review group for the digital switchover help scheme. That is an astonishing omission.
I have listened to my hon. Friend’s remarks with great interest. However, it again strikes me that, if a local council already holds the data, a cost will be incurred in transferring them to a district council. Perhaps district councils will get inquiries and phone calls from the visually impaired and have to pass them on. All those matters take resources and I am not entirely satisfied that the statement that there will be no cost implications is accurate.
My hon. Friend makes an excellent point, which enables me, in summing up, to reiterate the important matters that my hon. Friends and I have raised. We want to know whether the amendment is sufficiently robust to withstand future changes to the structure of local authorities. My excellent hon. Friend the Member for Windsor (Adam Afriyie) has repeatedly made the point about cost implications. He is always a steward of the taxpayer’s funds. He rightly points out that, in an era of sky high council tax rises, the amendment will have cost implications. I stress again the need to include local authorities in the policy review group. I do not forget the point of my right hon. Friend the Member for East Yorkshire about local reorganisation in Scotland. We hope to hear more about that from the Under-Secretary.
I remind all my colleagues to keep their diaries free. The Under-Secretary will hire a minibus and we will go to Whitehaven to see digital switchover in action.
I apologise for the early promotion that I gave you in my intervention, Madam Deputy Speaker.
I am delighted to follow the hon. Member for Wantage (Mr. Vaizey) and I thank him for his praise for me as the expert on the matter that we are considering. He and I share the view with many hon. Members that digital switchover is important and will bring huge benefits to everyone in this country, and we were anxious to support the Bill to ensure that the most vulnerable in our society also benefited from the changes that digital switchover will bring. We were therefore surprised during the Bill’s passage that the Government had missed out a large number of disadvantaged people because they had failed to consider the data available to local councils. We now know from a parliamentary answer of 26 April this year that some 50,000 people will be assisted because the Government have decided to include within the legislation the obtaining of information from local councils as well as from Government Departments.
The amendment is important to ensuring that we get right the definition of those councils from which that information can be obtained. I am grateful to the Minister for recognising that that suggestion came from the Liberal Democrat Benches and I am grateful that the Government brought forward an amendment in the other place to ensure that it takes place. Having acknowledged my acceptance of what the Government are doing, I, too, like the hon. Member for Wantage, wish to ask the Minister questions—four very specifically about the amendment.
The first question is specifically about Whitehaven, which has been referred to on a number of occasions. Different people will have different views on whether Whitehaven is leading the way or is a guinea pig, or whether what is happening there is a trial. The Minister has told us on a number of occasions that it is not a trial for the main scheme, but that it is none the less an experiment from which we will learn.
May I remind the hon. Gentleman that when we referred to Whitehaven as a guinea pig, the Minister became extremely upset? I would therefore urge the hon. Gentleman to refer to Whitehaven as a pioneer.
That is why I chose my words carefully, pointing out that there was some concern about the definition. As I suggested in an intervention on the hon. Member for Wantage, the new definition ensures that Whitehaven council will be able to provide the information. Perhaps the Minister will confirm that I am right. If that is the case, will the Minister explain why in the rest of the country people who have been identified from the information from local councils as well as from Government Departments will be informed that they have been identified and then offered the targeted help scheme, but in Whitehaven the reverse will happen, whereby people who believe themselves to be eligible will have to apply and have their eligibility checked out?
If the amendment is passed, we will know the procedure in the rest of the country when digital roll-out takes place for gathering information and from whom that information would come, but would it not still be possible within the time scales to use the same procedure in Whitehaven? Given the importance of the issue—I should point out that, on the Government’s own estimates, we are talking about 8,600 people—I hope that we will receive a positive response to that question.
The amendment refers to the obtaining of information from a particular category of councils. We know that many other councils and Government Departments are to provide the information, but, bearing in mind your earlier ruling, Madam Deputy Speaker, has the Minister changed his mind about whether information gathered from that category of councils is to be made available to the BBC? In Committee, we were clearly told that the BBC would have access to this information. Indeed, I moved an amendment to exclude the BBC from the groups of people who would have access to the information, but it was denied by the Government. However, I read that in other place—
Order. Whatever the hon. Gentleman may or may not have done in Committee, we are now discussing this amendment, which, as I have already ruled, is very narrow in its definition.
I am grateful, Madam Deputy Speaker. I am seeking to ascertain whether the information that as a result of the amendment will be obtained from a particular class of local authority will be made available to the BBC. That is my point about this information The reason I ask that—[Interruption.] I hear the Minister saying yes, but in the other place, Lord Davies of Oldham said:
“We envisage that the BBC will not need access to the data disclosed in this Bill.”—[Official Report, House of Lords, 22 March 2007; Vol. 690, c. 247.]
That is clearly a contradiction. I hope that the Minister will be able to explain why we were told in the other place that the BBC will not have access, but he has just said from a sedentary position that it will have access.
My third question relates to the data that will be obtained from this category of council. Does the Minister envisage any end point at which it will be deemed that such information will no longer be made available? The Minister will be aware that much debate took place in Committee about a proposed sunset clause—a provision that I believed was crucial. The Government have not agreed to a sunset clause for data from all the other sources of information, but will the Minister consider one at least in respect of the data that will be collected from this category of council?
Finally, and I hope very helpfully to the Minister, this category of council and the data that will obtained from it will enable a group of people who might otherwise not have been assisted to benefit from the targeted help scheme. I am sure that that group of people—if, because of your ruling, Madam Deputy Speaker, no other—who might be assisted by the new definition would be interested to know about the progress of the targeted help scheme. Will the Minister provide an update of progress on the assistance that that group of people might be able to get? I look forward to hearing the answers to those four questions.
I pressed my hon. Friend the Member for Wantage (Mr. Vaizey) on the point about costs related to the amendment. If a local council has access to the data on the visually impaired and those who may benefit from the scheme in the Bill, that information will have to be passed on. The local council will have to respond to individuals who may be claiming their entitlement or, conversely, depending on how the land lies in the Bill proper, the council will have a duty to initiate contact with those individuals.
As a result of the amendment, those councils will now include district councils, which until now may not have expected to be included as a data-gatherer or passer-on of that data. The councils that need to transfer the data may not have been aware that they had that extra function to perform. It thus strikes me, without a shade of doubt, that there are cost implications for the council collecting the data, and even just for the transfer of data that has already been collected to the district council or authority and thereon to the BBC or the Government, and vice-versa.
I reiterate to the Minister that I have some concerns about point 8 of the explanatory notes, which states:
“The amendment is not expected to have any financial effects.”
That simply cannot be true in this context. I recognise, of course, that explanatory notes do not constitute the Bill and I also recognise that those outside the House should not draw too much from them, but I draw the Minister’s attention to the problem. May I ask him to explain in very specific terms why this transfer of data and function that already exists will have no cost implications whatever? That just seems incredibly unlikely.
I am faced with a difficult choice, Madam Deputy Speaker. Hon. Members have tested your ruling to destruction. Your generosity in holding back from reminding them of your ruling has resulted in their taking advantage of their position. My choice is whether to do the same, but owing to my long-term interest in currying favour with you, I will not test your patience. I shall therefore simply summarise the matter, not least because there is a real danger of hon. Members losing themselves in the detail to the extent that they cannot see the wood for the trees.
This is a very narrow amendment, whose purpose is to provide clarity. The hon. Member for Wantage (Mr. Vaizey) did anything but provide clarity in his remarks, but I shall provide that clarity by telling the House that the purpose of the amendment is to remove the ambiguity that arose when it was thought that a certain group of councils might not be part of the scheme. We want to ensure that that is not the case.
Questions about local authorities that might be involved in the future take us into the wonderful realms of the hypothetical, but they waste the time of the House. The Government’s purpose in the Bill, and in this amendment, is to ensure that the help scheme and the access to the necessary data can be provided.
Will the Minister give way?
No, I will not. The hon. Gentleman has had nearly an hour in which to wax lyrical about all this—
The hon. Gentleman must be patient. He has spent hours entertaining the Chamber—
Twenty-two minutes.
He has spent 22 minutes on something that, frankly, should have been dispensed with in two.
There is a separate definition of “local authority” in Wales and Scotland, but we have ascertained that the necessary information can be made available in Wales and Scotland; we are satisfied that that is the case.
The only substantial point that has been made in the debate was made by the hon. Member for Windsor (Adam Afriyie), who rightly raised the concern about the cost to local authorities. Had he been part of the incredibly enjoyable debate that we have been conducting on the Bill over the past few months, he would know that this issue has been fairly raised by the hon. Members for Wantage, for Bath (Mr. Foster) and others.
Our view, which has been formed on the basis of consultation with the charities involved in this process as well as with the local authorities, is that there will be no disproportionate costs involved. We were more concerned about the costs to organisations such as Sense and the Royal National Institute of Blind People. Had there been a possibility of disproportionate costs, we would have ensured that it was dealt with. It is part of our ongoing dialogue with local authorities, the RNIB, Sense and the other organisations involved to ensure that any inconvenience or costs involved do not get in the way of the delivery of the scheme. There is no evidence of that happening, but Digital UK stands ready to deal with any problems that might arise.
We are doing this in the interest of not adding unnecessary regulation or bureaucracy. There was a time when the Conservatives argued in favour of deregulation and less bureaucracy, but they now seem to be led by the hon. Member for Wantage, who constantly wishes to add all sorts of totally unnecessary new regulations and costs.
Lords amendment agreed to.
Rating (Empty Properties) Bill
Considered in Committee.
[Sylvia Heal in the Chair]
Clause 1
Unoccupied hereditaments: chargeable amount
I beg to move amendment No. 6, page 1, line 2, at beginning insert—
‘(1) In section 45(1)(c) of the Local Government Finance Act 1988 (c. 41) (unoccupied hereditaments: liability) after “year” insert—
“(ca) none of the conditions in subsection (1A) applies”.
(2) After section 45(1) of that Act insert—
“(1A) The conditions are that—
(a) the whole hereditament has, subject to subsection (1B), been unoccupied for a continuous period not exceeding three months;
(b) its owner is prohibited by law from occupying it or allowing it to be occupied;
(c) it is kept vacant by reason of action taken by or on behalf of the Crown or any local or public authority with a view to prohibiting the occupation of the hereditament or to acquiring it;
(d) it is the subject of a building preservation notice as defined by section 3 of the Planning (Listed Buildings and Conservation Areas) Act 1990 or is included in a list compiled under section 1 of that Act;
(e) it is included in the Schedule of monuments compiled under section 1 of the Ancient Monuments and Archaeological Areas Act 1979 (c. 46);
(f) it is a qualifying industrial hereditament;
(g) its rateable value is less than £2,200;
(h) the owner is entitled to possession only in his capacity as the personal representative of a deceased person;
(i) there subsists in respect of the owner’s estate a bankruptcy order within the meaning of Parts VIII to XI of the Insolvency Act 1986 (c. 45);
(j) the owner is entitled to possession of the hereditament in his capacity as trustee under a deed of arrangement to which the Deeds of Arrangement Act 1914 (c. 47) applies;
(k) the owner is a company which is subject to a winding-up order made under the Insolvency Act 1986 or which is being wound up voluntarily under that Act;
(l) the owner is entitled to possession of the hereditament in his capacity as liquidator by virtue of an order made under section 112 or section 145 of the Insolvency Act 1986.
(1B) Where a hereditament which has been unoccupied becomes occupied on any day and becomes unoccupied again on the expiration of a period of less than six weeks beginning with that day, then for the purposes of ascertaining whether the hereditament has been continuously unoccupied for the period mentioned in subsection (1A)(a) it shall be treated as having been unoccupied on that day and throughout the period.
(1C) For the purpose of subsection (1A)(a), a hereditament which has not previously been occupied shall be treated as becoming unoccupied—
(a) on the day determined under paragraph 8 of Schedule 1 to the General Rate Act 1967, or
(b) on the day determined under Schedule 4A to the Act, or
(c) where neither (a) nor (b) applies, on the day for which the hereditament is first shown in a local rating list,
whichever day first occurs.
(1D) In subsection (1A)(f)—
“qualifying industrial hereditament” means any hereditament other than a retail hereditament in relation to which all buildings comprised in the hereditament are—
(a) constructed or adapted for use in the course of a trade or business, and
(b) constructed or adapted for use for one or more of the following purposes, or one or more such purposes and one or more purposes ancillary thereto—
(i) the manufacture, repair or adaptation of goods or materials, or the subjection of goods or materials to any process;
(ii) storage (including the storage or handling of goods in the course of their distribution);
(iii) the working or processing of minerals;
(iv) the generation of electricity; and
“retail hereditament” means any hereditament where any building or part of a building comprised in the hereditament is constructed or adapted for the purpose of the retail provision of—
(a) goods, or
(b) services, other than storage for distribution services, on or from the hereditament.”.’.
What joy we are going to have debating this Bill this afternoon! It is my pleasure to move amendment No. 6 and, first, I declare an interest: my entry in the Register of Members’ Interests shows that I am a director of a property company and a building company and a fellow of the Chartered Institute of Building. When the amendments were tabled, an “R” should have appeared after my name to signify those interests. Could those with a pen please append an “R” in brackets after “Mr. Robert Syms”? I apologise to the Committee for that omission. The Bill has proceeded fairly quickly; it had its Second Reading only last Thursday, amendments had to be tabled earlier this week and we are dealing with the Committee stage less than a week later. I am sorry that my registered interests were omitted in all that haste.
The Government committed themselves to making this change in the March 2007 Budget, as a result of the Barker review of land and planning that was produced in December 2006. There are different views about the benefits or advantages presented by Kate Barker. The Government also asked the Lyons inquiry to look into this matter, and when it published its report at the same time as the Budget, it broadly supported the measure.
Today, we are trying to amend this extremely short Bill. Essentially, it has only one clause—we have seen many examples of one-clause Bills—and that is a cause for concern for many of those affected by it. We tabled amendment No. 6 because the implications of the Bill are far-reaching. According to the Government papers explaining the Bill, it is expected that the changes will raise £1 billion—no small amount. Indeed, business rates in their entirety raise half as much as the total corporation tax take, so this is very big money in terms of what the Treasury raises. We are not talking about small change. The exemptions that the Committee must consider are very important.
Before my hon. Friend turns to the exemptions, may I take him up on his good point about the amount of money that the provisions are likely to raise? Is he satisfied that those who represent the people and companies affected by the provisions were properly consulted before this Committee stage? It seems to me that the Government are rushing this measure through.
My right hon. Friend makes a good point.
Amendment No. 6 deals with exemptions, which would affect the amount of money raised by the provisions. Money will therefore be a key part of the debate on the amendment. There is no doubt that the Bill has been introduced relatively quickly. As I said earlier, the Barker review, the Lyons inquiry and the Budget all contributed to it, but there has not been full and proper consultation. That is regrettable. As we go on to explore amendment No. 6 in more detail, we shall see that the Bill will affect a wide range of individuals. A consultation process would have benefited the Government and, certainly, the Opposition. It would also have created much more awareness of the legislative agenda in Parliament. Sometimes people do not appreciate what measures are going through the House until they become law, and they do not therefore have the opportunity to influence Government and Opposition Members when we are framing legislation.
The amendment is about exemptions. It is a pity that there has not been widespread consultation, because it means that we might not have sufficient information on the bits and pieces that we are debating today and cannot fully appreciate how strongly people feel about these topics. As I said in my opening remarks, £1 billion is a lot of money, and has a big impact on businesses and our constituents. It is therefore a pity that the consultation has not been fuller.
Although the Bill is short, with essentially one clause, its schedules also cause concern, especially given that the Government are going to change some of the ways in which property has historically been valued. With regard to paragraph 4 of schedule 1, concern has been expressed that people might do things to their property to try to avoid the business rate. As a result, the CBI, the British Property Federation and the Royal Institution of Chartered Surveyors have raised concerns about definitions and how that aspect of the Bill will be implemented.
As we are dealing with a fairly short Bill in a short time span and without full consultation, many questions remain unanswered. The Minister has a great opportunity today to set out more fully how the provisions will operate, especially paragraph 4 of schedule 1. Will properties that have been flooded, burned down or bombed be affected by the definitions? If a firm moves out of a property, and a roof or wall must be taken down to extract machinery to move it elsewhere or to put it up for sale, will that be caught by the scope of paragraph 4? That point will be of great concern to people up and down the land.
RICS has said:
“The Government attempts to deal with the deliberate vandalising of property by introducing Paragraph 4 Schedule 1 of the Bill which disregards changes in the state of a property. RCIS is concerned that this clause fundamentally changes the basis for rating valuations, rather than simply preventing deliberate vandalism of empty property. It is a long established principle that rating valuation is based on the actual property to be rated and the property must be valued as it is.”
I hope that the Minister will acknowledge the need to sort out those concerns. Within the narrow scope of the amendments and the limited time for debate, we have an opportunity today to explore some of the issues and get things on the record from him.
RICS continued:
“This throws up a range of potential issues to do with the removal of plant and machinery or the removal of a tenant’s changes to a building after the lease has expired. It would appear that under the proposals it would be acceptable for a tenant to take these actions while the property was occupied but would be unacceptable once it becomes vacant.”
That is a key point. It went on:
“Individuals could potentially be penalised for not doing something which becomes a particular concern when the occupier is in financial difficulty. This part of the Bill is likely to lead to increased litigation and an increase in the number of appeals to Valuation Tribunals.”
RICS is particularly exercised about that part of the Bill.
Amendment No. 6 was crafted and tabled by my hon. Friend the Member for Surrey Heath (Michael Gove), who will join our deliberations a little later. It is important to get the proposed exemptions and, in that regard, we have a concern. I have a lot of time for the Minister; we have served in Committees for many happy hours together.
Only two more weeks.
I note the Minister’s comment. I remember a famous interview between Sir Robin Day and Sir John Nott, in which Sir John Nott took off the microphone and marched out when he was accused of being a “here today, gone tomorrow” politician. Between the time when the Bill is passed and the regulations are made by statutory instrument, we may have a fresh—or older—face; I do not know. The Minister may even retain his job. There is concern, however, that a change of personnel will mean that the regulations will be brought in by a different individual. The Opposition have therefore tabled a detailed amendment that would put the provisions in such regulations on the face of the Bill.
If I may, I will go through my hon. Friend’s amendment in detail. It states:
“Clause 1, page 1, line 2, at beginning insert—
(1) In section 45(1)(c) of the Local Government Finance Act 1988 (c. 41) (unoccupied hereditaments: liability) after “year” insert—
“(ca) none of the conditions”—
Order. It might be easier if the hon. Gentleman just quotes the reference on the amendment paper.
I can certainly present the amendment in a less specific way. It has been tabled in extremely fine detail; every punctuation mark is important for Her Majesty’s Opposition.
The amendment covers several aspects. The Opposition want certain important conditions to appear on the face of the Bill to ensure good, decent legislation. The first of those conditions is proposed new subsection (1A)(a), which refers to the condition that
“the whole hereditament has, subject to subsection (1B), been unoccupied for a continuous period not exceeding three months”.
That is an important aspect—that is what applies at present, but it is not on the face of the Bill. We therefore have concerns, because consultation has not taken place.
What is magic about the period of three months? I envisage a situation in which a family have an unoccupied property, perhaps because a business has folded, and the family, who are not particularly wealthy, intend to put the property on the market. They might have to deal with a liquidation or bankruptcy of one of the partners, and there might be a delay in marketing the property. In many cases, a good argument could be made for the exemption to run for six months.
My right hon. Friend makes a good point. Some of the legislation goes back many years. More recently, in the 1980s, the period was three months for most property, and six months for industrial property. There has been long debate about the right length of time for an exemption before the tax kicks in. Clearly, if there had been public consultation before the Bill was introduced, we would have more information. Her Majesty’s Opposition have picked the current period, but if it were extended beyond three months—the amendment would not do that—that would have an implication for the overall tax take and the additional £1 billion that the Government are trying to raise.
I suspect that three months is not long enough; a property might have to go through new planning permissions or be marketed by estate agents, and sometimes people drop out. It is a tight timetable, but, historically, it has been the normal period for most categories of property, so we opted for it. I suspect that there is not much difference between the Government and the Opposition on that point, which is why we have tabled the amendment. The provision ought to be on the face of the Bill.
Proposed new subsection (1A)(b) is the second provision that should be on the face of the Bill. If an owner cannot occupy a property for a legal reason, he should be exempt. That is the existing situation. It is important that that is made clear for the many thousands of people who will be affected by the Bill. The exemption should be specified.
I was critical of my hon. Friend for drafting paragraph (a) too narrowly, because three months is inadequate. However, I am concerned that paragraph (b) is drawn too widely. For example, an owner may be regarded as prohibited by law from occupying his property if he is serving a prison sentence. The sentence might well be in relation to defrauding the business that used to occupy the property, so why should he be exempt in those circumstances?
My right hon. Friend makes an extremely good point. We have drafted the amendment on the basis of existing legislation. I am not tempted down the road that he suggests, because we want to make progress and need to speed up. However, his point is reasonable and now on the record. If someone cannot occupy a property for a legal reason, it would be sensible for them not to pay the business rate.
Paragraph (c) sets out what has always been the position and it is important that it is stated on the face of the Bill. The exemption should remain part of the legislation. Paragraph (d) is also important. As Members of Parliament, we all know the importance of conservation and listed buildings. Many of them are in prominent areas of our towns, and we are lucky to have many beautiful and historic towns. Our legislation has always been ahead of the legislation in many other countries in that it recognises an exemption for such properties.
Will my hon. Friend confirm that although agricultural buildings are not rated under the business rating system—I must declare an interest as an owner of agricultural buildings—one of the recommendations of the Lyons inquiry was to bring them within this tax? In those circumstances, many buildings in the countryside that might be listed or might contribute to the rural environment would come under the empty buildings regulation. That could result in increased pressure on farmers or demolition of the very buildings that people want preserved.
My hon. Friend makes an important point. Substantial changes have been made to the position of agriculture in legislation overall. Many buildings were de-rated in the 1930s as a result of the depression and the hard time that agriculture experienced then. There is an argument for change, but that is not part of the amendment. I wish that he would not tempt me off the amendment, because some important points need to be put before the Committee.
I do not want to interrupt my hon. Friend’s flow, but will he clarify whether a particular example would be caught by his amendment? A building in the town of Craven Arms in my constituency has been unused, unoccupied and unsafe for decades. It is situated in a prominent part of the high street and has been a blight on that town for many years. The reason for that situation is that the ownership of the property is uncertain. It was believed to have been donated from one body to another a number of years ago, but neither will accept—
Order. I remind the hon. Gentleman that interventions should be brief. Perhaps he could come to the point so that the hon. Member for Poole (Mr. Syms) can answer.
With great pleasure, Mrs. Heal. I apologise for extending my example. To conclude, the building in question was supposedly donated by the railwaymen’s union to the Labour party, which in Craven Arms is effectively defunct, unloved and unwanted, and it will not take responsibility for the building because of the cost of its upkeep.
We all know that a number of buildings are in a state of disrepair and would fall under the Planning (Listed Buildings and Conservation Areas) Act 1990. It is important to exempt them, and we want that to be clear by stating it in the Bill. Sometimes local authorities or a range of organisations have to give grants to do up such properties. If they were not exempt, renovating them and ensuring that they are saved, salvaged and enjoyed by future generations would be a far more difficult task.
Surely in the example given one would not need to exempt a property specifically if the ownership is unknown, because presumably no one is paying the rates.
My right hon. Friend makes a good point, and shows his experience as a Member of this House. Nevertheless, it is important to have paragraph (d) in the Bill.
Paragraph (e) is equally important. We are blessed with a lot of monuments and archaeological areas. Many of us enjoy watching people on television digging up part of our towns to see what our ancestors built. The exemptions in the amendment are important. All of those who enjoy our heritage would demand that the Government include such exemptions in the Bill. It is important to consider paragraph (e), and I hope that the Minister will say much more about it when he responds.
Paragraph (f) deals with the qualifying industrial hereditament, and proposed paragraph (g) refers to a rateable value of less than £2,200, which is the cut-off point for business rates.
I do not think that there is any great disagreement between the Opposition and the Government on those things, but there is uncertainty. We pretty much know for a fact that we are going to have a change of Prime Minister, and that the Government will be reshuffled between the time the Bill and the amendment are considered and when the various regulations and statutory instruments are introduced. Therefore, it is important to put some of the exemptions on the face of the Bill so that the rating legislation landscape that people have been used to is not changed. No doubt the Minister will have an opportunity to consider and answer my specific points.
Paragraph (h) sets out an important exemption. We all know the difficulty that arises if a relative is deceased or if someone has responsibility for dealing with a friend’s estate. The exemption should be on the face of the Bill, and made clear so that those who are in that situation and worrying about the Bill are not caused undue hardship or given undue concerns.
There are many important and intricate points to the amendment. I am glad that the Committee is listening to my argument and that it will have a much fuller debate about those things. The range of issues is amazing. Rating legislation is highly complex, and we need only look at the algebra in clause 1 to realise how complex this Bill is. I have great sympathy for the civil servants who must—no doubt very efficiently—deal with the legislation and advise the Minister. The Minister’s contribution to rating reform will no doubt prove legendary. Much of this sort of legislation stays on the statute book for a very long time. As amendment No. 6 demonstrates, it tends to be “a little bit here, a little bit there”, but it builds up into important case law.
The Bill involves a good deal of money. As I said earlier, business rates raise half as much as corporation tax, and are often the subject of disputes leading to legal actions and tribunal hearings. It is therefore important to make exemptions clear in the Bill rather than awaiting the uncertainty of regulations at a later stage, when another Minister may be in charge.
The Insolvency Act 1986 is important legislation, and is undoubtedly part of the reason why we won the 1987 general election. Insolvency means a traumatic time for many people, and those people need reassurance. Although I was a county councillor at the time and not yet a Member of Parliament, I remember the 1986 Act as ground-breaking legislation. I hope the Minister will accept the provision in paragraph (i), or, failing that, will explain in detail why he cannot do so.
The provision concerns not just those who become insolvent but their creditors. After the event, the bills that come in will reduce the amount of money available for distribution to those who are already hard hit.
I have tried, in my inadequate way, to explain the importance of that aspect. My hon. Friend is right to draw attention to the breadth of the impact of insolvency on members of the community, including creditors.
The argument can be taken a stage further. It is already unacceptable that the state insists on being paid first, before those who may be in a much worse position. This is another example of circumstances in which the state’s grabbing comes before the needs of the individual.
My right hon. Friend makes an important point. There is concern about the impact of that arrangement on the community, including our constituents.
Paragraph (j) refers to the Deeds of Arrangement Act 1914. The year, of course, was seminal, yet the imperial Parliament of the time passed the Act. No doubt the legislation was debated fully; no doubt it embodied the hopes and aspirations of many people. Now, 93 years later, we are contemplating inclusion of this provision not in the Bill, but possibly in a statutory instrument or regulation. The Act has stood the test of time. Perhaps the Minister will explain why what some have described as key legislation should not apply to the Bill.
Paragraph (k) returns us to the Insolvency Act 1986. The Government have not done justice to that important Act in their one-clause Bill—a Bill which, however, is not small in terms of the money that it will raise: £1 billion. That is why a clear exemption is needed.
We can only marvel at the number of hours that Parliament must have spent considering all the legislation to which we have referred today. In those days there was no programming. Debates were often open-ended, and most parts of the legislation would have been considered in great detail by many people.
Order. I do not think we really need a history of the progress of the 1986 Act, although it is relevant to the amendment.
Thank you for your guidance, Mrs. Heal.
I think it important to include as much information as possible in Bills of this kind, given their complexity and major financial implications, so that people know exactly where they are.
So far my hon. Friend has taken me with him, and I am minded to support the amendment. I agree that exemptions should be made clear in the Bill. However, I am slightly puzzled by the wording of paragraph (k). Why should a company that is being wound up voluntarily be exempt? The owners of a company may well wind it up voluntarily to avoid paying their dues under the Bill, then form a new company with a different name and effectively continue to trade as before.
My right hon. Friend’s intervention shows his experience as both a Member of Parliament and a business man. As we all know, people sometimes misuse legislation, but most of those affected by the Insolvency Act are in that position involuntarily rather than voluntarily. A winding-up order is usually made because the company is owed a lot of money and is trying to get some of it back, or to put a company out of business. However, I do not want to digress, Mrs. Heal.
Paragraph (k) shows how complex and difficult insolvency law is, and how it interacts with the problem of business rates. The Bill is being progressed fairly speedily so our discussions are time-limited, but it is important that we debate this matter fully. The Minister must respond in detail on amendment No. 6. I hope that when he replies, he will talk about the Insolvency Act 1986 and the Deeds of Arrangement Act 1914, and why he thinks that the amendment should not be made. We need answers. It is important that the Government clearly explain their position. Why have they introduced what is essentially a one-clause Bill? Why are they not prepared to include our proposals on this complex subject in the Bill?
The amendment would also add:
“Where a hereditament which has been unoccupied becomes occupied on any day and becomes unoccupied again on the expiration of a period of less than six weeks beginning with that day, then for the purposes of ascertaining whether the hereditament has been continuously unoccupied for the period mentioned in subsection (1A)(a) it shall be treated as having been unoccupied on that day and throughout the period.”
There has usually been an exemption for a property that is occupied for only a short period. I suspect that the Government would prefer to deal with that matter by statutory instrument and regulation, rather than include it in the Bill. I would like the Minister to explain where the Government stand on that matter and why, as it is important.
The issues and concerns that I am raising are key and require deep thought. It is a pity that there was no consultation—I have said that before, but it bears repeating. If we had had a full consultation, the public and the business community, and those affected by specific aspects of the Bill—such as accountants, surveyors or lawyers—would have had a much fuller opportunity to feed in their views. That would have given us an opportunity to address their concerns and talk about whether aspects of the business rate that have historically been in law ought to be continued with or amended.
There is an entire area of exemption to do with “qualifying industrial hereditament”, including buildings that are
“constructed or adapted for use in the course of a trade or business”,
and those that are constructed or adapted for various other uses, including
“the manufacture, repair or adaptation of goods or materials…the generation of electricity…the working or processing of minerals”.
Therefore, the exemptions in our important amendment No. 6 would affect a surprisingly wide range of activities, including electricity generation, mines and quarrying.
Has my hon. Friend noticed the importance of proposed new subsection (1D)(b)(iv) in respect of the decision that most people have now made that electricity must be generated on a much more local basis? The measure will become much more important than it would previously have been as we begin to disseminate electrical generation. Although many of my hon. Friend’s examples and measures have been historical, this one is important for the future.
My right hon. Friend makes a good point. The measures are historical in that most of the legislation that contains them was passed during the last century and has been woven long ago into rating legislation. However, progress and technology changes the impact of measures. My right hon. Friend raises a point that I had not thought about when producing the amendment. In the past electricity has been generated in, and transmitted from, large plants or large substations. There has been exemption from rating legislation, and we are keen to include that in the Bill. However, if microgeneration increases and there are more small generators for people’s homes and for estates, what impact would the amendment have on the properties concerned? Because of the point that my right hon. Friend has raised, I am now having a few concerns about my amendment. A person or business who generates electricity from their own property might be exempted. Can the Minister reassure me that this historic legislation is still relevant, given the changes in the electricity market, such as the move to microgeneration?
My hon. Friend is making a good argument. In view of his expertise in this area, which he outlined at the beginning of his speech, can he explain when a property is deemed to be empty? If someone has a storage warehouse that has nothing in it, but which has a windmill fixed to the roof generating electricity, could a tax inspector argue that because electricity is being generated from that building, it is occupied?
A startlingly large number of issues and subjects could be raised as relevant to the amendment. Every intervention throws up an important point that I shall have to reflect on. The generation of electricity is usually exempt. If there are concerns about this area, the Government might have to reconsider it if they do not accept the amendment and we do not then win the vote on it.
There is a wide range of issues and concerns. One needs only to read slowly through the amendment to understand how many people and activities are affected, such as insolvency, ancient monuments, electricity generation, mining and quarrying. The Deeds of Arrangement Act 1914 is a key part of the overall legislation that ought to be exempted. There is concern about these matters because we did not have a consultation, and because people are unsure about how they will be addressed in regulations, as there will soon be a change within the Government. The Opposition are therefore anxious that measures should be included in the Bill.
I meet constituents in my surgery who are faced with legal action; some of them are faced with cases and appeals. They are unsure about what will happen, and they feel angst. The proposed legislation will lead to a wide range of appeals, and it will cost many of our constituents a lot of money in trying to sort out whether they are liable. It is important that we make the situation as clear as possible by including measures in the Bill.
It is important that when the Minister replies to the debate he gives a full explanation of why the Government went for a one-clause Bill that does not address the intricacies of this area of legislation, and why he might wish to reject the detailed, considered, thoughtful and beautifully crafted amendment tabled by Her Majesty’s Opposition. If he were to accept it, that would save a lot of anguish, angst and difficulty for those affected by the proposed legislation. We heard earlier that it will raise £1 billion. That is a lot of money. There will be a considerable impact on many of our constituents. It is important that we have a debate on the range of exemptions, and that we have answers.
Some people say that Parliament no longer matters. I disagree. The debates that we have, the questions that are raised, and the heated and detailed discussion about amendments that we have are an important part of shaping legislation, and the country that we love. Therefore, it is important that we fully debate these aspects of the Bill. If the Government do not accept our important and carefully considered amendment, they should make it clear why not. Our constituents think that it is important that they should know what the situation is.
The legislation has been introduced relatively rapidly and it has substantial implications. It will raise a lot of money, but it will also lead to appeals and much case law. It is therefore important to put more information into the Bill. I look forward to the Minister’s detailed response to my questions about why the Bill is so limited and why we cannot consider all the important issues it raises. I know that my hon. Friends who wish to speak are determined to stand up for the interests of their constituents. I know that the Minister has listened carefully to what I have said, and I hope that he will also listen carefully to my hon. Friends.
I rise to speak on two principles. I am very much on the Government’s side on the rating of empty buildings, because we have been too lax in the past. Given our serious housing problems, we need to ensure that all the buildings we have are properly used, because the alternative is to build yet more in unsuitable places. I am therefore in favour of the principle behind the Bill. However, a second principle means that I am worried about the form of the Bill. I am sure that the Minister, for whom I have considerable admiration, will understand when I say that the difficulty with what appears to be easy, environmentally friendly legislation is that it sometimes leads us to move so fast that we do not consider the implications.
The first principle is the rating of empty properties and I agree with the Government’s intention. The second principle is that we should have the debate. A problem that is frequently raised in my surgeries—I am sure that other hon. Members have the same experience—is that bits of Bills have unintended results, with sometimes serious results, because they were never debated properly. That is why my hon. Friend the Member for Poole (Mr. Syms) made the point that we would speak on this occasion especially in defence of the interests of our constituents. I raised, for example, the single issue of the effect of the Bill on microgeneration and the extension from the large generating centre to many smaller ones, which is very much the purpose of the commission that I chair on behalf of the Leader of the Opposition. Without revealing anything new, I can say that we will certainly recommend a radical move towards microgeneration. Even raising the issue in this debate has done some good.
It is possible that the issues can be addressed in the regulations, but that will not provide an opportunity for a debate in this House. I recognise that the issue has not been the biggest draw for the Chamber and the Government Benches are empty apart from those who are here in their official capacity and the ornamental presence of one Back Bencher. He is a substantial figure, but his presence does not suggest that the Labour party is thrilled by this debate. However, on our side of the House, several hon. Members wish to talk in detail about an issue that will affect their constituents.
I mentioned two principles. The first is wanting to have this legislation and the second is wanting to ensure that it is properly debated, because that is what Parliament is about—
Order. I hope that the right hon. Gentleman will now address his remarks to the amendment. I have allowed him some leeway on the principles, but I hope that he will now be specific in his comments.
I will do my best to—indeed I will have to—follow your guidance. I shall turn specifically to illustrate those principles through the details of the amendment. The first few examples in proposed subsection (1A) are intended to ensure that we do not have situations that no one thought about. That is my worry with this type of broad-brush legislation. It is only when one starts discussing it that one wonders what might happen if an owner wanted to occupy a building, but could not do so because the law stopped him. Unless the Bill states specifically that in those circumstances the owner would not have to pay the tax—which he would be prepared to pay if only the law did not stop him benefiting from the occupancy of the building—I suspect that the regulations will also miss the point. I have often thought that I have had a good answer to some political point, but have then discussed it and discovered that those who come at it from a different direction are able to think of several new and difficult questions.
Does my right hon. Friend share my view that new Subsection (1A)(b) is too widely drawn? I shall give him an example. Let us say that a husband and wife jointly occupy a property. The husband assaults the wife and the judge makes an order that by law he is not to return to the property as long as his wife is there. He is then by law prohibited from occupying the property. Why should he escape paying rates?
My right hon. Friend is right to give that example. At the opposite end of the spectrum, if there is no reference to such issues, there is even more likely to be a difficulty. The point is that we need to have the discussion. I suspect that the Minister will not accept the amendment, although I would be pleased if he did so.
The purpose of this House is to have the kind of interplay that we are having. Those in the Box, to whom we are not allowed to refer, will at least be thinking that when they prepare the regulations they will have to get that issue right, although they may not have thought of the point that my right hon. Friend raises. I must confess that I had not thought of it myself.
The next example in paragraph (c) raises similar problems. If the local authority to which the money would be paid has itself stopped the building being occupied, it would be perverse for it also to be able to demand the money from the people who are not able to occupy it. Unless we make that clear, I can think of some local authorities that, either from perversity or by accident, would end up in that position. They would say, “Well, Parliament did not make any reference to this point, so we have decided, given the generality of the rules under which we operate, we are going to charge. So you, Mr. Jones, you can’t use your property, but you’ve got to pay for it.” That would be manifestly unfair, and the possibility ought to be excluded.
I am especially concerned about proposed subsection 1A(2)(d) in the amendment. I declare an interest in advice on planning matters, especially in respect of listed buildings and conservation areas. One problem with the present system is that the time taken to deal with building preservation notices has been extended in recent years. The people involved are extremely pressurised and often have to act precipitately to stop irredeemable and irrevocable changes. That is the nature of that sort of order and it may mean that the time involved is very much longer than what is envisaged in the Bill, with the result that, for good community reasons that the House would favour, people may not be able to enjoy the use of their premises in that period.
My right hon. Friend’s excellent speech is dealing in detail and authority with the amendment’s proposals, but does he agree that proposed paragraph (d) of amendment No. 6 is especially important? I know that he has been devoted to the cause of ensuring that our high streets remain healthy. Is not respect for diversity of provision at the heart of a healthy high street? In Chester, one of our most attractive and historic city centres, commercial enterprises operate out of listed houses or buildings of historical note—
Order. The hon. Gentleman knows that interventions should be brief. Will he please conclude his remarks so that the right hon. Member for Suffolk, Coastal (Mr. Gummer) can answer?
Thank you, Mrs. Heal. Does my right hon. Friend agree that, when we are considering empty properties in which commercial activity is going on, it is vital that we should not neglect the built environment and buildings of historic distinction in particular?
My hon. Friend is right. The matter is important for a second reason, which is that historic buildings must have an alternative use if they are to be maintained. Empty historic buildings, and especially the domestic type used for commercial purposes that would be covered by the proposal, do no one any good. In addition, I imagine that there will be more such properties, as wireless technology for example makes it possible to use previously unusable buildings.
I have a problem with proposed subsection (1A)(e) of amendment No. 6, as I am not sufficiently well versed in the Ancient Monuments and Archaeological Areas Act 1990 to be able to imagine how many monuments would be caught by the legislation. I suspect that few are rated, but I have done the Minister’s job and he will agree that it is amazing to discover what peculiar things turn out to be rated under our system. I believe that bus shelters can be rated, so it would not surprise me to find out that some monuments would attract a rate. If none are, there would be no need for the proposal in the amendment, but if some are, the proposal becomes very important.
Proposed subsection (1A)(f) is important, if we manage to define “industrial hereditament”. It is interesting that we have retained a word that is more difficult to say after dinner than it is after a sober lunch.
I sympathise with the right hon. Gentleman, and remind him that the word no longer means what it did originally.
The Minister is right, but I bet strongly that neither of us could define precisely what it means today, or what it used to mean. That is what makes it such a good legal word.
Proposed paragraph (h) is the most controversial in the amendment. I can see what my hon. Friend the Member for Poole is getting at, but want to offer the following example. A person who finds that his Aunt Agatha has died may not have seen her for some time or realised that he was her executor. He might not find it easy to sell her property because she did not do much with it for a long time. Consequently, her nephew has a lot to do, but the probate system takes such a long time that he might easily find himself paying money out of his own income to cover the circumstances.
I am at present dealing with a constituent in exactly that situation. There is money in the estate involved, but complications with the will and the nature of the person concerned mean that probate is taking a long time. My constituent therefore has little choice but to meet the financial demands from his own resources.
I appreciate what my hon. Friend the Member for Poole is trying to do, but I agree with what my right hon. Friend the Member for East Yorkshire (Mr. Knight) said earlier about drawing proposals more narrowly. Many properties in this country, domestic and otherwise, are owned by people who do not live in Britain. No one could accuse me of being anti-foreigner, but the people living abroad who own those buildings want to hang on to them because their value is rising all the time. They do not want the hassle involved with letting the properties, so they are not rented out.
That is bad, and why I said earlier that this is a necessary Bill. If the proposal in the amendment is accepted, we need to be careful about how long the period should be. I can see that it might be longer than what we have at present, but I am unhappy about it being as open ended as it is in the amendment.
I am not sure that the proposal is all that open ended, as it states that
“the owner is entitled to possession only in his capacity as the personal representative”.
If a deceased person’s personal representative becomes the owner of a property when the estate is wound up, his status under the amendment would change. It is grossly unfair for the state to impose a tax on a person merely because of probate delays caused by the same state.
My right hon. Friend makes a sensible point, but I am worried about the fact that some people may use the delay for their own advantage. If we can find a way to close off that option, I would be pleased but, on balance, I prefer to have the change rather than not.
I turn now to the owner’s estate bankruptcy order and the Insolvency Act 1986. I agree that that is a good Act and that it has clarified matters considerably, but we have reached the crux of the problem. The Government are right to want to ensure that empty properties make a proper contribution to the cost of services, but they must make sure that the provisions do not run counter to other legislation, and bankruptcy is a serious problem in that regard. If people are forced to pay to the state money that would otherwise go to people who have a prior demand, a prior requirement and in my view a prior right, they have a right to feel aggrieved.
I would take it further, as I suggested in an intervention earlier. It is utterly wrong that the state, which can carry these things more adequately, has used its power to make laws to protect itself against the interests of individuals, for whom bankruptcy is a greater disaster. If I am a small business man and someone goes bankrupt, my bills are paid only after the bills owed to the state are paid. I find that unacceptable. The state is able to know how much it is likely to lose over any year and make proper provision. Unlike many individuals, it can carry that loss because it deals with such a large number of bills. All of us in our constituencies have seen cases of individuals who have suffered considerably as a result of bankruptcy. If we add to that the fact that, before creditors’ bills are paid, the local authority will be able to take money for a property which is empty due to bankruptcy, it would be entirely unfair. I commend my hon. Friend the Member for Poole for putting that issue in such a clear way in the amendment.
Proposed new subsection (1A) (j) is just as important. It becomes more important in a sense because the present Government have made arrangements, which I supported, to take a broader attitude to bankruptcy—in the past, we have been too tight about it. The Americans have a better way of looking at it and as a result have been able to create many jobs; unlike us, people there have been prepared to take risks. Under the Government’s arrangements we will have more deeds of arrangement so the subsection becomes the more important.
That is also true of paragraph (k), which seems to complete the trio that covers everyone who might be affected by bankruptcy. I repeat that I am not seeking to support or protect the bankrupt. I am concerned about people who will be affected by a bankruptcy, a deed of arrangement or a winding-up order. The terms of the paragraph would mean that we were not providing circumstances in which the local authority could get its fingers on money that would be more properly used to redeem someone’s debt.
Paragraph (l) relates to the person in his capacity as a liquidator. I am involved in representing a constituent on such a liquidation. The ownership of the property is extremely important to any chance of my constituent getting a reasonable amount of the money that he is owed for medical supplies. His happens to be a very sad case. The fact that he has suffered in one of the longest liquidations in history, mainly as a result of actions taken by the previous Conservative Government, saddens me a great deal. If the liquidator in this hugely difficult process were to pay rates on empty buildings, I doubt whether by now there would be any money left for the people for whom the liquidation technically has taken place.
I use my constituent’s example because, were I in the Minister’s place, I would think that paragraph (l) was not terribly important because in normal circumstances liquidations are relatively quick. Where things are owned abroad, liquidations can take a very long time. Although I am sure that chartered accountants have their uses—sometimes I wonder what they are—there is no doubt that they are not the fastest of people when it comes to liquidations. I hope that the Minister will take the terms of the paragraph seriously because it could have extremely serious results.
In most cases, although the local authority may not be the place where I would put what money remained in anything that amounted to a bankruptcy, the process is likely to be relatively quick. The amount paid to the local authority will not be too dreadful and money will be left for the real creditors. In the very long liquidation to which I have referred, the effect of the Bill could be very serious, so I hope that the Minister will take the amendment seriously.
It is a pity that the Opposition have had to go to the difficulty of producing the list of examples of those things that should be exempted. I am sure that my hon. Friend the Member for Poole will not mind my saying so, but Oppositions are not professional in terms of such matters. These are matters that civil servants—much maligned under this Government—are very good at handling. If the civil service had produced a list of exemptions for the Bill, many of the issues that we have raised would already have been dealt with. We could have discussed many other issues much more sensibly if the Government had done that work on the exemptions using their powers, opportunities and resources.
In speaking in favour of the amendment, I want to say that it ought to have been significantly better and I am sorry that the Government did not take the opportunity to do the work. By saying that, I do not in any way cast doubt on the work done by my hon. Friend and his colleagues.
The fact that we have produced so many questions in the short time that we have had to prepare the amendment, and after such a lack of consultation, argues for better consultation on such matters. Not only would the terms of the amendment have been improved had they been included in the Bill presented by the Government, but the attitude towards the issue among the public, for whom the amendment will be an effective step, would have been greatly improved.
The amendment is about ensuring that there will be fewer cases of people feeling hard done by by the system under which they labour. That issue above all brings me back, but in order, to the key concerns of principle. Taken together, this series of amendments would ensure that the legislation is seen by the public as fair, reasonable and knowledgeable, not merely thrown at them as so much legislation has been over recent years. Will the Minister be kind enough to take a message—I hope from the House, but certainly from me? One of the problems that has beset his Government is their unwillingness to go through these processes in detail, some may say boring detail, as we have tried to do in this case. They have put on the statute book primary legislation and, I regret, badly thought out secondary legislation and regulation, with the result that people are increasingly unwilling properly to accept Bills such as this one.
The Government are right to introduce the Bill. They are right to rate empty properties and to insist that people contribute to the cost of services. They are right to ensure that all properties are available for use at a time when climate change must be fought at every level. What is wrong is that they have not given the House proper opportunity to debate the real issues—small though they may be—that affect our constituents.
I support the amendments and I am particularly grateful to my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) for concluding his remarks with a complaint about the manner in which the Government chose to introduce the Bill to the House. I remind the Committee that it is the fourth largest revenue-raising measure announced in the Budget, yet it has been dealt with inadequately, as is evident by the scale of the amendment.
The inadequacy lies not least in the amount of time given to the House to consider the measure, which was not part of the Finance Bill, but also in the fact that we have had no sight of the regulations that might, had they been produced before Committee, have enabled us to consider reducing the scope of the amendment. That is not to say that the proposals are not important in themselves, because they would include exemptions in the Bill rather than leaving them to be introduced under regulation. It is symptomatic of the way in which the Government try to conduct their business that they mask their true intent by not providing regulations in good time, as we are considering the legislation. The Minister looks quizzical—does he want to correct me?
The purpose of the Bill is to change the period; exempt properties are covered by regulations.
That may be so, but why should not the exemptions be clearly set out in the Bill, as we propose in the amendment?
The Minister is being naive. If we change the time, the way in which the legislation will affect the various categories changes, too. If the categories are not in the Bill, or if we do not know what the regulations are beforehand, we cannot defend our constituents against them.
As so often, my right hon. Friend makes his point clearly.
I want to discuss two aspects of the amendment. Other speakers have touched on them, but I want to reinforce my concern that the issues are properly addressed in the measure and in regulation. My first concern relates to proposed subsections (1A)(d) and (e), the exemptions relating to listed buildings and ancient monuments.
I hope that the listed buildings exemptions will be the same in regulations under the Bill as they were in previous regulations. However, as a result of the Government’s efforts to tighten up on the risk to revenue from the deliberate destruction of buildings to make them uninhabitable, I am concerned about the many buildings in our constituencies, which have historical qualities and may be listed, ancient monuments or neither, that need exemption from the empty buildings rating regime. I shall give some constituency examples of ruined castles to illustrate my point.
I live along the Welsh border and the western half of my constituency borders Wales—an area particularly richly endowed with castles that were built originally to mark the boundary between England and Wales and to ensure the protection of English citizens from the marauding Celts. In my constituency there are a number of castles in a state of what can best be described as disrepair. I am thinking, in particular, of Clun castle and Hopton castle, which are both in my constituency, and Wigmore castle and Brampton Bryan castle, which are just outside my constituency, in the valley where I live. Each of those is, in effect, a ruined castle without a roof.
I hesitate to venture a small criticism of my hon. Friend, but if he is concerned about those castles—I can understand why—why did he not include them in the list in amendment No. 6, to which he put his name?
I am most grateful to my right hon. Friend for suggesting that the amendment should have been even longer. That thought occurred to us when we were discussing what to include, but it also occurred to us that, given the shortage of time between Second Reading and Third Reading, it would not be possible to ask all Members of Parliament to list all historic buildings of that kind. We therefore deliberately decided not to include a full list of all such buildings.
Some of the buildings that I have mentioned are owned by English Heritage and have been in receipt of lottery grants for large amounts of money to restore them as ruins—not as buildings for business use. Some of them receive visitors and so there is some income to be generated from them, but often they are visitor attractions run by volunteers and do not generate sufficient income adequately to recompense the cost of keeping them going. Adding to the burden placed on such buildings, through additional rating duties, would be most unwelcome and would help to put some of them at risk. It is important that such buildings are exempted from business rates in their entirety.
I should have declared an interest in the case of Hopton castle, because I have the distinct privilege of having been appointed patron of the Hopton castle restoration fund. We have succeeded in securing a grant from English Heritage of approaching £1 million to restore the property to a state in which it could be opened to the public. To highlight the difficulty, I should point out that Hopton Castle is in a village. In fact, it is barely a village; it is a collection of houses with, I think, 45 inhabitants. It would be quite impossible for that group of people to maintain the property from their own resources. The rates would represent a considerable cost in the event of their applying to the property. It is important that exemptions for such properties are spelled out in the Bill and subsequently in regulations.
Secondly, I want to touch on what happens when properties are empty and the ownership is uncertain or unclaimed—an issue that I raised in an intervention earlier. That will be a relatively rare occurrence, because most properties have a value and most people who have a claim on such property are likely to seek to be identified with it. However, there are properties where, because of the nature of their decay and dilapidation, the cost of acknowledging ownership would be too prohibitive for likely claimants. I hope that the Minister will respond to the suggestion that there are certain categories of property where ownership is uncertain and where business rates should not apply.
I can think of an example of a property that, rather like its former occupier, is unloved and unwanted. Nobody is able to pay for its upkeep. I am not seeking in any way to assist the Labour party out of its financial difficulties, but given that the last occupier was the Craven Arms Labour club, which, as far as I am aware, has not existed in my lifetime—and long may that be the case—the property provides the Minister with an interesting example of the problem that I have identified, and I would like him to help us, in the generality, to find a solution. In particular, perhaps he could help the inheritors of the Craven Arms Labour club—Ludlow Labour party, I believe—to get out of their difficulty by exempting them from business rates on unclaimed property.
I do not really need to declare an interest, unlike my hon. Friend the Member for Poole (Mr. Syms), but I believe in erring on the side of caution, so I shall start by saying that I am a non-practising lawyer and the owner of some property, all of which is occupied, mainly with classic and historic motor vehicles, but of course that may not always continue to be the case.
My great concern about the legislation is the time scale. It is at the very least odd that the Government are proceeding with the legislation at such a pace; and at the very worst, it shows a disrespect for the public and Parliament. Now that we are in Committee, which followed so soon after Second Reading, we are forced to ask why the Bill was not subject to pre-legislative scrutiny, and why there was not wide consultation with interested parties and groups before the House was asked to make a decision on the matter. That is a relevant point to raise, because the Minister is seeking to hurry the legislation through at the very time when the Leader of the House, who chairs the Select Committee on Modernisation of the House of Commons, is telling us that he wants the Executive to have greater respect for Parliament, and to allow greater parliamentary scrutiny.
Order. It pains me to have to tell the right hon. Gentleman that I do not agree with his assessment of the relevancy of those remarks. I do not think that he should make them in debate on amendment No. 6.
I do, of course, accept your assessment, Sir Alan. I was making the point, en passant, that the Government could and should have done a lot more to consult widely before we reached Committee stage.
Well, let us pass quickly on from that point, then.
Amendment No. 6 has my support, imperfections and all. I am surprised that the Minister has not yet intervened to say either that he accepts the amendment in its entirety, or that he accepts its spirit. Nor has he said that he will deal with the exemptions by putting them in the Bill. My right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) said that the Government might take action later through regulations, but clause 1(2), which we have not yet discussed, contains some exemptions, for which there will be zero rating. They include cases in which
“the ratepayer is a charity or trustees for a charity”
and in which
“the ratepayer is a registered club for the purposes of Schedule 18 to the Finance Act 2002”.
If the Minister has seen fit to put those two exemptions in the Bill, why has he not seen fit to indicate to the House that he will accept amendment No. 6? It seems only right and proper that the exemptions itemised in the amendment be added to the Bill.
So that the Minister cannot say it, let me make the point that the exemptions may, of course, be additional to those currently in the legislation. However, if that is the case, surely it underlines the point that we made earlier, which is that if the time scale changes, all the exemptions must be reconsidered by the House.
That is absolutely right; I agree with my right hon. Friend, and it is right and proper that we consider each and every one of the exemptions today.
I have some doubts about the cut-off period of three months mentioned in proposed new subsection (1A)(a). I can understand why the provision is there—it is because we want to achieve a balance between being fair to the owner and seeking to bring a property back into use. In some instances, however, there may be good reasons why the property is vacant for more than three months, and I should have preferred paragraph (a) to allow the owner to plead cause beyond that period. I regret the fact that my hon. Friend the Member for Poole chose not to include such a provision. That is a minor criticism of the drafting, however, and I none the less support the amendment.
Paragraph (b) of proposed new subsection (1A), however, is rather curious, and I am not entirely happy with the drafting. I gave my right hon. Friend the Member for Suffolk, Coastal an example of a situation that may arise when a violent husband attacks his spouse and is subject to a court order that prevents him from re-entering his property. In those circumstances, paragraph (b) would exempt him from paying any rateable charge, which I am sure is not what we intend to achieve. Perhaps the Minister will give us his thoughts on the matter when he responds to the debate.
Paragraph (c) of proposed new subsection (1A) is an essential exemption. A property may be kept vacant by the Health and Safety Executive, acting on behalf of the Crown, because a staircase is unsafe. If the property is a listed building, specialists may have to be brought in to carry out alterations to the staircase before it can be safely used. In the interim, the owner, who is using all his endeavours to improve the property, should not face a rates bill, so paragraph (c) is vital. I hope that the Minister accepts it, but if he does not, I hope that a similar exemption will apply.
Turning to paragraph (h), I had some experience when practising as a solicitor of dealing with the winding up of estates. Sometimes that is easy and quick to complete, but that is not so if there is no will or, if there is one, if the family do not know where the beneficiaries live. Documentation may be missing, so probate sometimes takes far more than a year to complete. In the interim it is wholly unfair to charge the personal representative, who may be a family member and not a well-paid solicitor who can reimburse himself for any charges by charging the estate. Why should the widow or widower who has to deal with the estate in a time of emotional stress and difficulty suddenly find that they have to pay, in addition to any duties payable by the estate, a rateable charge on an empty property? I therefore hope that the Minister will accept the fairness and common sense of the exemption in paragraph (h).
Some of us wonder why there is a need for the Bill at all. If the Chancellor and the Prime Minister had not given away part of our EU rebate to Europe, we would not need to collect £1 billion from this piece of legislation. The Bill should not have been introduced, but we are, however, considering it. We are trying to make it better, so I hope that the Minister accepts amendment No. 6.
I had not intended to speak in this debate, and I certainly do not intend to do so for as long as some of the preceding speakers. Having listened to their contributions, however, I believe that amendment No. 6 is a useful provision, at least in spirit—the phrase used by the right hon. Member for East Yorkshire (Mr. Knight)—because it answers one of the main concerns expressed by groups who have lobbied us on the Bill, even those who are well disposed towards it. I recall the evidence from the Federation of Small Businesses, which supported the Bill but said that what was needed to improve it was a better definition of how to exempt groups of property owners who were genuinely trying to occupy their property. That is what the various proposed exemptions try, in their different ways, to do.
I shall group the exemptions, rather than discuss them individually. The conditions in paragraphs (h) to (l) are designed to help people who are trapped in legal processes entirely beyond their control. That might arise as a result of death or of bankruptcy or insolvency. The legal mills will not grind any faster because the Government have changed the tax procedures. However hard people try, they will none the less be penalised unless some exemptions are provided.
The second group of cases is covered by the exemptions in paragraphs (b) to (e), which deal with cases in which official authorities have created obstacles to use. That might arise because of historic buildings and, in some cases—this applies to the exemption referred to in paragraph (c)—where there are difficulties with the planning process.
In a typical case that I have encountered several times in my constituency, shopkeepers find that their shops are no longer viable. They start using the shop as an office or a burger bar and planning officers come down on them quite heavily for improper use. Enforcement orders are issued, followed by appeals against enforcement orders and applications for permission. The planning staff say that it must be demonstrated over a substantial period that the shop is not viable as a shop. A long process is involved, and the owners are barred from using the premises in the meantime. Such practical situations arise on many occasions.
I have listened to the speeches and I believe that amendment No. 6 is helpful in setting out many of the practical circumstances in which a property owner is entirely genuine in trying to use property but is unable to do so. If the amendment is not acceptable to the Government, I hope the Minister will explain how he would address the problem that the Federation of Small Businesses outlined very well.
I congratulate the hon. Member for Poole (Mr. Syms) on tabling an amendment that prompted such a comprehensive and thorough debate. The Committee owes him its gratitude. I have been enlightened by what I have learned this afternoon, such as what was said about the castles and ruins in Shropshire—ruins that do not pay rates anyway, but we have heard about them. Genuine congratulations are due to the hon. Member for Ludlow (Mr. Dunne). What he has achieved with the restoration of a castle is welcome and will be noted.
We also learned in the debate, which is on a tightly drawn amendment and not on Second Reading or Report, about the collection of classic cars in East Yorkshire. I was hoping that the right hon. Member for East Yorkshire (Mr. Knight) would tell us what they were, but I suspect, Sir Alan, that you would have stopped him, just as you are about to stop me now, so I will move quickly to the amendment.
The problem with the amendment is not the justification or otherwise for the exemptions that it proposes, but a misunderstanding of what the amendment would do if it were written into the Bill. Let me explain why that is the case. I think that that will satisfy right hon. and hon. Members who have raised in depth concerns that were expressed on Second Reading. It is important that we respond to those concerns.
When I read the amendment, it looked very familiar. As I looked into it, I realised that the amendment, subject to minor tweaking, is taken from the wording of the Non-Domestic Rating (Unoccupied Property) Regulations 1989, as amended. The regulations flowed from the Local Government Finance Act 1988, and it is the 1988 Act that the Bill seeks to amend. Putting the 1988 Act regulations into the Bill would insert into it exemptions that are already in place in such a way that we would not be able to change them, should we want to, without primary legislation. In other words, the exemptions are already there.
The right hon. Member for Suffolk, Coastal (Mr. Gummer) made an intelligent and quick-witted point. I increasingly realise why he served in government for such a long time. In fact, I think that he was the longest-serving Local Government Minister, so I take what he says very seriously. Over the summer, we will consult on the regulations to take on board the points that interested parties, including hon. Members, may make. Putting the existing regulations into the Bill would not achieve what right hon. and hon. Members want to achieve.
Hon. Members have referred to several problems. I could use the Aunt Agatha analogy, which is a good one. The hon. Member for Twickenham (Dr. Cable) mentioned planning issues, which were also raised on Second Reading. Those and other problems already exist under the current time scale and rate of collection, and they would continue to exist whatever the algebraic formula in clause 1. I am sorry that the hon. Member for Bromley and Chislehurst (Robert Neill) is not here to hear that, but those points are not relevant to the Bill, although the amendment has given us the opportunity to explain the position.
It might be of interest to Opposition Members, and indeed to my hon. Friends, to learn that the authors of the 1988 Act and the 1989 regulations were the late Sir Nicholas Ridley and his then Under-Secretary, the hon. Member for Christchurch (Mr. Chope). I will contact the hon. Gentleman, who is a distinguished member of the Chairmen’s Panel, to explain how his right hon. and hon. Friends have been trying to undermine his beautifully crafted laws and regulations. Indeed, I am doing no more than repeating the process that was undertaken by Sir Nick, whom I remember lobbying as a student. I always found that he gave us a very fair hearing although he was ideologically opposed to us. I do not know what he would have made of the smoking ban—I imagine that he would have been outraged.
Section 45 of the 1988 Act sets out the liability of unoccupied hereditaments for business rates, and subsection (1) determines to which of those the liability applies. The liability includes, among other things, all hereditaments that fall within a description prescribed by the Secretary of State by regulations. In other words, the 1988 Act gave the Secretary of State the power—subject of course to the passing of the necessary regulations—to determine the exact classes of unoccupied hereditament that should be subject to empty property rates. By means of some rather convoluted double negatives, the effect of the regulations is to include within the empty property rates regime all unoccupied hereditaments except those falling within certain specified classes of exemption.
Will the Minister clarify the position of cemeteries? As someone in that line of business, I know that valuations have been carried out throughout the country that are aimed at rating cemeteries as businesses. At what point does a cemetery become unoccupied? Is it a hereditament? Cemeteries are obviously occupied for a long time after burials. People who run private sector and local authority cemeteries would like to be reassured that they will not pay rates in perpetuity, despite the fact that those buried are there in perpetuity.
I congratulate the hon. Gentleman on the ingenuity of that point. I do not know whether he has just thought of it or whether the matter featured in his postbag. It worries me greatly when a Conservative Whip starts to talk about cemeteries—I do not know what lies behind that. However, the point is not relevant because the Bill does not deal with exceptions and exemptions from rates, which the 1989 regulations already tackle. Let me repeat that, although the points have been interesting and some of the questions have been ingenious, they are not relevant to the Bill.
The Minister is making an interesting case. He argues that it would be wrong to include exemptions in primary legislation and that they are suitable for regulation. However, as my right hon. and hon. Friends have pointed out, sporting clubs and charitable organisations are specifically exempt from the Bill. That exemption is in both secondary legislation and on the face of the Bill, and the Government have invited support for it. We are happy to support it and we applaud its inclusion, but we must also mark the Minister down on logic because if he can include one exclusion in the measure, why cannot he include others?
The hon. Gentleman makes a good point and I congratulate him on spotting it. He is right. The answer to his question is that the exemption to which he refers is already in primary legislation. I therefore have to deal with it in primary legislation rather than in regulations. Indeed, I asked the very same question of my officials when I read the first draft of the measure.
If the exemption is already in primary legislation, why does the Minister have to include it in primary legislation again? Will he assure the Committee that all the exemptions in the amendment will appear in the regulations about which he will consult?
The first question is on a point of logic and the second makes an important point. The exemptions relate to the time period for them—that is why they are in the Bill. The hon. Member for Bromley and Chislehurst spotted that the variables below the dividing line cannot exceed two. If they did, I would have the power to increase the rate by more than 100 per cent. However, the time period is the important factor.
The right hon. Gentleman’s second point is important. It relates to matters that affect listed buildings and so on. I am surprised that he and others did not mention the exemption for agricultural buildings.
Indeed, the matter did come up—I had forgotten. There is no intention in the Bill to change policy on exemptions. However, partly because of the point that the right hon. Gentleman made and partly as a matter of good governance, we intend to consult on those matters in the summer.
To provide the flexibility that Sir Nicholas Ridley needed and that is still required, it would be wrong to include the exemptions in primary legislation because it would lock them in and not allow us to decrease the rates as well as increasing them.
Will the Minister give way?
Is it on the point that we are discussing?
On that very point, because is it not the key to the whole debate? If the exemptions were locked into the Bill, a successor to the Minister could not reduce the list of them.
I would have to come to a judgment on that. The flexibility exists for local authorities to go further in respect of the amount of the exempted rate, but the problem would then be the same as the one that our predecessors faced in 1988—that the overall tax take has to be considered at some point in time. The hon. Member for Poole chided me for the alleged lack of consultation on the Bill. It is, of course, a finance measure that has developed out of the Budget and I would argue that consultation took place through the Barker and Lyons reviews. The regulations will also be consulted on, but this is a finance measure being dealt with, after consulting the House authorities, through a Bill to be considered by a Committee of the whole House, rather than through a Finance Bill Committee. This is a matter of local government finance.
I hope that I have given adequate time—I certainly had until today—to debate the Bill. I felt that the consultation that flows from it on account of it being a finance measure would be better done this way. The right hon. Member for East Yorkshire raises a reasonable point, but it is a question of balance. I have to do what anyone in my position has to do, which is to protect business rate payers from too many exemptions. One can envisage circumstances in which many organisations could argue for exemption—the agriculture industry did so successfully, for example, and there may be others—so it is a question of balance. He raises a reasonable point, but I disagree with it.
I hope that I have explained the logic of our opposition to the amendment. I genuinely believe that it achieves the opposite of what it intends. I studied the amendment carefully and saw that that was the case. I hope that our debate on the exemptions does not cloud the fact that this Bill is about the time period for the exemptions for empty property rates, not about the exemptions themselves. On that basis, I hope that the hon. Member for Poole will withdraw the amendment.
We have debated a detailed and wide-ranging amendment, covering subjects as broad as castles, historic cars, violent husbands, labour clubs and cemeteries. That has demonstrated the Bill’s impact on communities. My hon. Friend the Member for Ludlow (Mr. Dunne) made the point that the provision in the Bill is the fourth largest revenue raiser in the Budget, so it is bound to have a large impact. That is why it is important to debate the exemptions thoroughly.
I was pleased by the Minister’s reasonable response to the debate and he dealt with many of the concerns of hon. Members. Regretfully, however, I still feel that we should press the matter to a vote. Bills with only one substantive clause may be short, but because of the range of concerns expressed today, I believe that the Committee should have the opportunity to vote. I therefore press the amendment.
Question put, That the amendment be made:—
I beg to move amendment No. 2, page 1, line 5, leave out ‘subsection (4A)’ and insert subsections (4A) and (4B)’.
With this it will be convenient to discuss the following amendments: No. 3, page 1, line 9, after ‘(4A)’, insert—
‘Where subsection (5) applies, the chargeable amount for a chargeable day shall be calculated in accordance with the formula—
(A x B) divided by (C x 2)’.
No. 4, page 2, line 3, at end insert—
‘(2) For subsection (5) of that section substitute—
“This subsection applies where on the day concerned, the hereditament is the subject of—
(a) a planning application,
(b) an application for approval of reserved matters or for the approval of details under a condition of a planning permission, or
(c) an appeal under section 78 of the Town and Country Planning Act 1990.
No. 5, schedule 1, page 5, line 20, at end insert—
‘(1A) For the purposes of any regulations, the state of any property shall not be deemed to have been changed by the carrying out of operations in accordance with a planning permission.’.
It is a pleasure to serve under your chairmanship, Sir Alan. I thank you for the advice that you and your office extended to me, and to my hon. Friends, in framing and tabling the amendments.
I apologise for not having been here for the opening of the Committee stage. I spoke in the debate on the Ways and Means resolution, and also on Second Reading, and opposition to the measure and scepticism towards it are close to my heart. I was genuinely sorry that I could not be here for the beginning of the remarks of my hon. Friend the Member for Poole (Mr. Syms). I know that he made an admirable and cogent case, but I am afraid that I was detained elsewhere on family business.
The amendments fall within two groups. They deal with the broad question of planning and land use, but amendments Nos. 2, 3 and 4 are naturally grouped together, because they form part of one coherent argument, and amendment No. 5 is separate, because although it deals with planning matters, it relates to a different part of the Bill and is meant to deal with a different specific eventuality.
Amendments Nos. 2, 3 and 4 are essentially tests of the Government’s integrity. Amendment No. 5 is an attempt to achieve the Government’s intentions more effectively than we believe the Bill itself is capable of achieving them. In that respect, whether the Government accept amendment No. 5 is a test of their sincerity. If Ministers genuinely want to achieve the goals stated in legislation and argued for by them in earlier debates, we believe that they will have to accept the amendment.
Let me briefly explain why we tabled amendments Nos. 2, 3 and 4. They deal with a new and specific exemption that we wish to introduce. In our debate on amendment No. 6 we discussed the whole question of exemptions, their appropriateness, and whether they should be contained in primary legislation or in secondary regulation to be presented at a later date.
The Minister accepted that there were exemptions that should be included in primary legislation. We had a brief exchange on the subject when I intervened on him. I am afraid, however, that his customary authority lapsed at that point, because he presented us with a circular argument. We pointed out that we wished to introduce a whole set of exemptions that were entirely in accordance with custom, practice and previous legislation. Cases for all those exemptions were made with exemplary clarity by my hon. Friends. The Minister’s case against the exemptions was that it would be inappropriate to deal with them in primary legislation, but he accepted that the Bill contained exemptions for charities and sporting ventures—because, he said, they were in primary legislation.
That is a circular argument. The Minister is saying that an egg is an egg is an egg, because he says that it is an egg. I am afraid, however, that this combination of yolk, albumen and shell is not an egg, because it does not pass muster with me. There is no logical reason why one exemption is in primary legislation and another set of exemptions are considered appropriate for secondary legislation, other than precedent and ministerial edict.
We know that the Minister is capable of logic, reason and fluent argument. We have seen him display that capability many times at the Dispatch Box. It is incumbent on him now to explain to us why certain exemptions must be in primary legislation while others are fit only for regulation. It will not be good enough to argue, as he did earlier, that a period of consultation is necessary before we introduce exemptions. That argument would strike at the heart of the Bill. On Second Reading and in the Ways and Means debate, Conservative Members argued for consultation. Why? Because when Sir Michael Lyons introduced the idea of removing or amending the relief for empty properties, he argued explicitly that there should be consultation before business rates were reformed, probably in about 2010. The Government chose not to engage in that period of consultation. Instead, they decided to legislate precipitately in what was characterised in the previous debate as a rush to plunder.
The Minister, and the Government, cannot have it both ways. They cannot say, “We need to consult on the exemptions before we produce secondary regulation. All that can happen in good time, my dear man”, and at the same time say, “We need to produce this legislation quickly.” They cannot say, even by implication, “I am afraid that when he requested consultation, Sir Michael Lyons was insufficiently seized of the importance of legislating quickly,” and then, when it is convenient to them, say, “We believe that Sir Michael Lyons was wrong to call for consultation then, but we need consultation now.”
The Government must explain why when consultation occurs, it is always on their terms and never on anyone else’s. They must also explain why, having gone to the trouble of asking Sir Michael Lyons to make a series of recommendations on this measure and on local government finance in general, they accept only the measures that they can introduce quickly, and which automatically yield revenue, and why they have not given adequate consideration to those other thoughtful—and perhaps more complex, but none the worse for that—series of arguments that enjoined on them a degree of caution in proceeding. [Interruption.] The Financial Secretary to the Treasury asks from a sedentary position, “What about the amendment?” As I am sure he is aware, there are in fact three amendments—Nos. 2, 3 and 4—which come together, and there is also amendment No. 5. Amendments Nos. 2, 3 and 4 deal with planning and land use. The Financial Secretary and his junior—although perhaps not junior for much longer—the Economic Secretary put it to us in the original Ways and Means debate that the principal aim of the Bill was the more efficient use of land.
That cause is dear to the hearts of all Members present. My hon. Friend the Member for Wellingborough (Mr. Bone) serves on the board of a housing association, and my hon. Friend the Member for Poole is greatly interested in housing matters, and I know that they are keen that land should be used more efficiently, whether for housing or commercial purposes. However, the suggestion that the Bill is all about the more efficient use of land was undermined by the presence at the Ways and Means debate and on Second Reading of the Economic Secretary and the Financial Secretary. Why were they invited in to make the case for Department for Communities and Local Government legislation? Did the Treasury have no confidence in DCLG Ministers? Did the Treasury feel that the Secretary of State and the Minister for Housing and Planning were not capable of making the case? Heaven forfend.
Order. I might equally say heaven forfend that the hon. Gentleman move into more general territory than he should. I ask him to stick to the subject of the amendment.
Thank you, Sir Alan, for your helpful advice.
The reason why Treasury Ministers spoke was not any lack of confidence in ministerial colleagues, but the fact that this measure is palpably a straightforward tax demand. It is not about the more efficient use of land. It is about the more efficient—or, rather, the more rapid—acquisition of revenue for the Exchequer.
These amendments put the Government to the test. If they are genuinely willing for land to be used more efficiently, and if they genuinely believe that the measure is about encouraging regeneration, they will have no hesitation in accepting the amendments, because they would exempt from the scope of the legislation properties that are empty specifically because they are going through the planning process. They would exempt properties that are in the middle of a regeneration programme, such as those for which planning applications have been made or which are awaiting the result of a planning appeal. Such properties should be specifically exempted.
Let me explain why this specific exemption is worthy of this set of amendments. The amendments relate to the ideal of regeneration and, as we explored in previous debates, regeneration is a difficult process for those engaged in commercial property. When addressing regeneration in areas of past urban blight that require new commercial enterprises for new life to be breathed into them, we must recognise that people who are prepared to invest in those areas are taking a risk. Almost by definition, any area that is not currently a thriving business area—any area where additional commercial investment is clearly required or where we wish to encourage regeneration—is an area where the market fundamentals are not yet in place to attract the investment that we would all wish.
Therefore, when someone brings forward a specific regeneration project, they do so with a close eye on the balance of advantage and the balance sheet. As they look at any particular regeneration project, they might look at a balance of sites in any particular city or town. They will try to get together a critical mass of land in the right areas to allow them to proceed with a regeneration project that will give them a satisfactory return on capital. As we all know, in the commercial property world sites can come up rather more slowly than one would wish in order to maximise the efficiency of a project. Nevertheless, in order to try to ensure that a project is both successful and genuinely transformative, an enlightened investor will wait and exercise patience until the exact portfolio of sites comes into alignment. As they wait for that to happen, it will of necessity be the case that some of those sites are left empty. They are elements in what will be a transformed landscape that cannot be transformed piecemeal. The developer has to wait until all those areas are available before he is ready to move.
If the legislation is not amended, an additional tax will have to be paid on many of the parcels of land waiting to be packaged together, because the current relief on rating will no longer exist. That could mean that potentially viable regeneration projects would be rendered unviable as a result of the tax change. It stands to reason for every business that if it faces an increased tax bill, its economic activity will be penalised. As mentioned earlier, that is a not a hypothetical consideration, but a real-life concern.
In an earlier debate, I mentioned the specific case of Palmer Capital Partners, which has, as reported in Property Week, already had to abandon regeneration projects because of the anticipated tax hit of this legislation. I am afraid that my accent meant that I did not pronounce the “r” at the end of Palmer sufficiently; the name is Palmer as in Huntley and Palmer, or Harry Palmer. The reason why that is relevant is that the Minister interpreted me to mean Palma, the capital of Majorca, the principal Balearic island, so he thought that the company was some sort of Mediterranean fly-by-night enterprise. That was an opportunity for him to suggest, with his characteristic sprezzatura, that the only people who were complaining were the villains whom he had previously identified in the property market—commercial property organisations that deliberately leave properties empty. I hope that he will take this opportunity to reassure Palmer Capital Partners that he appreciates that it is an entirely reputable organisation. He has the lifebelt of being able to say that it was my curious Aberdonian accent that lured him into making that mistake.
It could have been my Lancastrian hearing. I did mishear the hon. Gentleman and thought that he had said “Palma”, but I certainly intended no slur against the company involved, or the good people of Majorca. In fact, a study of the regeneration of Palma, especially in the mediaeval city centre, would give us an example of a fantastic property development and regeneration project, from which we could certainly learn a lot.
I am grateful to the Minister for taking that opportunity to clarify the position. I knew that he meant no ill by his comment. If anything, his comments in the previous debate were evidence of his ludic wit, not a reflection of any desire to condemn the operation of Palmer Capital Partners, or any other company. I am sure that the Minister’s experience of Palma is greater than many other hon. Members’ experience, and I am glad to know that when he went to Majorca his principal aim was to investigate how successfully it had regenerated itself economically. I suspect that that regeneration has been most successful in the catering, leisure and hotel sectors, and some UK cities should learn from that.
It is appropriate to acknowledge that Palmer has had to abandon certain projects, because that is a real-life example of a company prevented by the Bill from going ahead with regeneration. Other companies in a similar position would benefit from the amendment. When properties are deliberately left empty to secure regeneration benefits, an extension of relief while planning permissions are dealt with would mean that the companies involved could bring forward projects that would not occur otherwise. If the Government are willing to stay their hand in a few cases, the resulting economic benefits would be enjoyed by everyone, but especially by people in the areas most in need of economic and commercial development.
On Second Reading, we discussed the north-east as a case study of the effects of the Bill. The Minister referred to Eldon square in Newcastle, where rents are significantly higher than in other parts of the city, and implied that there was a dysfunctionality in the planning or local government finance systems that only the Bill could put right. However, it is impossible to gauge how effective the economic regeneration of the north-east has been without taking account of the fact that industry there has made its unhappiness with the proposals very clear.
The Minister may not be familiar with Evans Easyspace, which operates out of North Shields in north Tyneside. A new commercial operation that it opened in July 2005 contains 17 small offices, and the same number of workshops. They are let to new and start-up businesses—exactly the sort of enterprises that a Government committed to regeneration would want to support.
The centre is a success, having reached an optimum occupancy of 91 per cent., although the Minister will note that Evans Easyspace is already taking a hit because some properties on the site are not occupied. The company argues that if the changes proposed in the Bill had been in place when it was conceiving its enterprise, it would have had to pay an additional £53,000 in empty property rates. It says that that is a conservative estimate, and that the sum of money involved might have made the difference between deciding to going ahead with the project and staying its hand.
There is high demand for jobs in north Tyneside, so how can the Government put forward a Bill that companies in the area consider to be entirely counter-productive? What would the Minister say to Evans Easyspace and other enterprising companies that choose to locate in areas where their services are most needed, and which are explicitly concerned about the potential effect that the Bill as it stands will have on future investment?
I accept that when developers gather parcels of property for regeneration, the seriousness of their intent to use all the sites that they have amassed in that geographical area can be open to doubt. It may well be that some of those sites are meant to form part of a regeneration project, but other sites, offices or premises may be left vacant for longer than would otherwise be wise or prudent. That is an extremely unlikely eventuality. As I explained on Second Reading, I do not believe that there is widespread economic masochism in the commercial property sector. I believe that most people who have chosen to take a risk and invest in commercial property recognise that it is appropriate to ensure that there are tenants in the property generating income which can make their investment worth while.
However, I will allow that it is theoretically possible that land on which a return could be made is not used to maximum efficiency at a given point. That principle is accepted in the broader debate on land use when we come to talk about land banking. I can see the hon. Member for West Ham (Lyn Brown) nodding thoughtfully. As a member of the Select Committee that scrutinises the Department for Communities and Local Government, I know that she has been doing some work on the subject. Individuals, for whatever reason, choose to stockpile land that is developable and hold it back off the market in the hope perhaps of making a capital gain rather than to see it used in the most efficient way.
It is appropriate that we get land banking in context. I am sure that the Minister will be aware that the principle of deliberately holding land back and not seeking the maximum return on it is at the heart of the Bill and it is something that we question. There is some useful evidence that calls into question whether such hoarding of space that could be more effectively used economically takes place. A letter was published in the Financial Times today from the executive chairman of the Home Builders Federation, who points out that in 97 per cent. of developments that have implementable planning permission builders have been on site within three months. That reinforces the truth that most operators are only too eager and willing to see the land on which they have secured planning permission used for commercial ends.
We accept that in certain circumstances people might conceivably hoard land. The amendment ensures that in any case in which that suspicion might arise it can be effectively erased. It covers those organisations or individuals who are in the planning process. They might have had planning permission turned down and are waiting for the planning inspectorate in Bristol to give its ruling so that development can go ahead. Given that seeking planning permission is of itself prima facie evidence of an intent to develop, and it is not a cheap process or one that anyone would undertake lightly, if a planning application has been made for a site, it is pretty clear to us that the individual or organisation who owns that site wants to see it used in a healthy, vibrant, commercial fashion. They should therefore not be penalised in the way that the Bill proposes.
The Government have introduced the Bill in the hope that land will be used more efficiently. What better test could there be of the willingness of individuals and organisations to see land used efficiently than the fact that they have sought planning permission for that site? If the Minister’s original thesis is correct that some individuals deliberately hold back property on which they could earn a useful commercial return, whoever these wicked individuals are, they are clearly not people who are seeking planning permission or waiting for the result of an appeal from the planning inspector. So whatever wicked individuals the Minister wishes to catch with this legislation, the amendment will ensure that the virtuous are not affected.
The Minister may argue that the inevitable cost of accepting the amendment will be taxation revenue forgone. However, I invite him to think about the cases in which such taxation revenue might be forgone: when properties remain empty and under-utilised because an individual is waiting for planning permission or for the planning inspectorate to rule. The answer to any lack of revenue that may be consequent on the passing of the amendment thus lies directly in the Government’s hands. If they ensure through their reforms, which we are discussing in the context of the planning White Paper, that the planning system as a whole is effectively simplified and streamlined, it will ensure that, working hand in hand with local government, there will be no undue delays in the planning system. It will quickly be found that the change of use properties required to achieve maximum commercial return is granted. Industry will benefit. Users of those services will benefit and of course the Government will benefit because we will not have properties caught in limbo awaiting the result of a planning application and, consequent on the amendment, not paying tax.
The challenge for the Minister is to explain why a Government who have introduced the planning White Paper, and hope to legislate this autumn to simplify the planning system, have insufficient confidence in their legislation to accept our amendment. If they are telling us the truth about the planning White Paper and the planning system there is no problem; there will be no delays—certainly none greater than three months—in granting planning permission and beginning development.
As the Minister knows, specific targets have been brought in for planning applications; they vary depending on the size of the development and are measured in terms of weeks, but they are indicative guidelines only; some local authorities are better at meeting them than others—it is notable that Conservative local authorities are often more successful in that regard than Labour. Party politics aside, however, we recognise that the Government have through the planning delivery agreement system sought to incentivise the speedy processing of planning applications. There is, however, a problem with the PDA system; as it sometimes incentivises speed over the quality treatment of planning applications, it can lead to the premature rejection of planning applications because a local authority is anxious to meet its PDA targets. Good planning applications, which should be accepted, are peremptorily rejected. As a result, planning applications have to go to appeal and the whole process is elongated and made more complex.
If the Government simply rely on PDA and existing instruments to guarantee that properties are not left empty and undeveloped for too long, we fear it will be insufficient. It is only through prompt implementation of changes to the planning system that the benefits that the Minister has described, and we recognise are required, can be brought about. I hope that when the Minister replies, he will explain the changes in the planning system that will ensure effective and prompt transfer of land from redundant and uncommercial use to successful commercial use. If he is as persuasive as he normally is, his arguments in favour of the planning White Paper and planning reform will in effect be arguments in favour of amendments Nos. 2, 3 and 4.
I have not yet talked about amendment No. 5, which is grouped with amendments Nos. 2, 3 and 4 for the convenience of the House because they deal with planning overall. However, amendment No. 5 is what might be termed a guards van to the rest of the train of my argument—it is connected, but it serves a different purpose. Amendment No. 5 deals with a specific part of the Bill that the Government have introduced following gentle pressure from the Opposition.
In the Ways and Means debate, we contended that the Government were running a risk. When changes were made to empty property rating relief and when reliefs were withdrawn in the 1970s—I regret to say by Sir Edward Heath, but that is a separate matter—unfortunate and perverse, although almost certainly unintended, consequences followed. We had the unfortunate example of individuals who suddenly found that their empty properties were liable for full rates who felt that they had to vandalise their own property. Rather than pay—rather than pony up—for an empty site on which no commercial activity occurred and from which no commercial return could be secured, they defaced their own property. They pulled down the roof, stripped out the floor and damaged what would otherwise have been a commercially useful investment.
When we put the reality of history—and therefore the real dangers of choosing to legislate again in the same manner—to the Government in the Ways and Means debate, they were to an extent dismissive. They said that they felt that the risk was being exaggerated. However, a few weeks later when we had the Second Reading, the Government, who had been a little dismissive at first, accepted that we had a good point and attempted to deal in the Bill with just such a perverse consequence. They said—I hope that I will not paraphrase them inaccurately—“If we have a commercial vandal who does violence to his own property, we will judge the rates payable on that property on the state it was in before the individual engaged in that act of economic self-harm and harm to the broader community and economy.”
On Second Reading, we raised some concerns about that. We could understand why the Government, having accepted our arguments, sought to legislate to deal with the issue, but we were concerned about proving intent. How can one be certain whether any changes that have occurred to a property are tax avoidance or whether they are legitimate? How can one make a window to a commercial property developer’s soul?
Amendment No. 5 is intended to provide the Government with a lifeline. We still think that the Bill is unnecessarily loose, so we have attempted to tighten it by a few notches to make sure that those whom it captures are smaller in number and more likely to be genuine commercial property vandals. The amendment would ensure that anyone who makes changes to their property in accordance with planning permission is not whacked in the same way by the Bill. It would allow an organisation or individual who had stripped out floors or taken off roofs as part of a commercially sensible or far-sighted change to continue to enjoy exemptions. It would include in the Bill clear protection for individuals who want to change their property in a way that is consistent with maximising long-term benefits from it.
Amendment No. 5 deals with a separate part of the legislation, and a specific change that the Government have introduced, so it does not relate to the same clause as amendments Nos. 2 to 4 do. If we take several steps back and look at the train that is amendments Nos. 2 to 4, and the guard’s van that is amendment No. 5, from an appropriate distance, so that we can see them all together and can attempt to judge them, or at least present them, to the House together, we see that one of the things that unites them is an attempt to ensure that the legislation covers only those people whom the Government have said that they intended it to cover. What all the amendments seek to do is to give effect to the Minister’s stated intentions. If the Government are sincere in their belief that the legislation is all about the more effective use of land, and the more prudent development of commercial property; if it is all about ensuring that regeneration can proceed, and that small retailers and other small business have the opportunities that they should have; if that is the Government’s stated intention, how can they willingly penalise owners who are seeking to improve their commercial property?
If the Government choose to reject the amendments, they are rejecting their own logic, and are deliberately setting out to punish people who are taking a risk in the interests of the wider economy because the Government’s primary aim is simply the acquisition of revenue at all costs. In that respect, the group of amendments goes beyond the scope of the Bill and strikes at the heart of the Government’s intentions over the next two years. Will they legislate in the national interest? Will they take a sufficiently enlightened view of representations from citizens and other interests within our nation? Will they listen and learn, in the words of the Chancellor of the Exchequer, and will they take a genuinely holistic view of the well-being of the nation, or are they narrowly focused on what is currently in the Treasury’s interests? That broad question—I submit that there can be no broader question—lies at the heart of these tightly framed amendments. It is because the amendments have been framed in the way that they have been that they give rise to that profound question.
If the Minister is intent on promoting not just the health of the commercial property sector and regeneration in areas that need it, but on good policy formulation, he will have no problem accepting the amendments. However, if, as I fear, he is simply doing his new master’s bidding, and is picking the pockets of the commercial property sector and its tenants in order to deal with the black hole that has been left after 10 years of improvident stewardship of the nation’s finances, he will reject the amendments. We will shortly hear the Minister explain the reasoning behind his reaction to the amendments, but by tabling them, we have set a clear test. It is a test of intent, sincerity and policy, and it is a test on which we will judge—
Order. The hon. Gentleman’s peroration is becoming exceedingly repetitive. He has perhaps made his point.
Sir Alan, if I have made my point in a way that is satisfactory to, and understood by, the Chair, I am sure that it will be understood by all other Members. I commend the amendments to the House.
I am grateful for that direction from the Chair, Sir Alan, although I was waiting to hear how amendments Nos. 2 to 5 could get us from planning permission to the future of the British economy; I thought that we might soon move on to foreign affairs, too.
The hon. Member for Surrey Heath (Michael Gove), whose speeches I always enjoy, clearly never had a train set as a young boy. His education is incomplete, because the purpose of the guard’s van, as any young boy or, I would imagine, young girl would know, is to put the brakes on and slow the train down, not to round it off.
The hon. Gentleman commented on the consultation, on the relationship between Her Majesty’s Treasury and my Department, and on the important issue of regeneration and the way in which the Bill interacts with those matters. Again, he put words in my mouth when he claimed that I described speculative property developers as wicked individuals. May I repeat that the Bill is not based on the premise that there are deliberate attempts to construct buildings that remain empty? It does, however, give people an incentive to put buildings into the market. None of those matters, however, are dealt with in the amendments.
At the core of the debate is the issue of planning, and the hon. Gentleman contended that buildings that are subject to planning application or which are awaiting decisions should be exempt. If we accepted the amendments, every sensible business person in the country—and business people are sensible—would whack in a planning application, and the non-domestic rating system would collapse, because people can submit such applications as often as they want and for as many different schemes as they want to. The amendments would therefore not achieve the objective claimed by the hon. Gentleman.
I listened carefully to the hon. Gentleman’s argument about planning delivery incentives. If we followed his logic, businesses could exempt themselves from rates by submitting a planning application, and most of them would do so. Consequently, local authorities would face a funding crisis, because the amount of money they receive from business rates constitutes, off the top of my head, about 20 per cent. of their income. They would therefore have to deal with applications in a matter of seconds, public consultation would go out the window, and the vicious circle would continue. Of course, that is hypothetical and would not arise, but that is the logic of the hon. Gentleman’s argument, so the amendments would not achieve what he said they would. He tempted me to describe our planning law proposals, but I will resist the temptation because, first, it is outside the remit of the amendment and, secondly, I am not daft. He will therefore have to wait to see the proposals.
The Minister is indeed not daft, but he is unnecessarily evasive. As he kindly acknowledged, the amendments deal specifically with a requirement that properties that are the subject of planning applications should be exempt. The Government are about to undertake one of the biggest upheavals to the planning system, perhaps since 1991 and certainly since 2004. Given that they say that the planning system will be made more efficient as a result of those changes, it is irresponsible of the Minister to leave that gaping void at the heart of the debate.
If the hon. Gentleman listens to the whole argument, he will find that I answer that point. First, however, I shall attempt to answer his specific questions. He raised the issue of self-vandalisation and companies that deliberately take the roof off, as it were. In discussions with industrial organisations and representative bodies, including the British Property Federation, the Royal Institution of Chartered Surveyors, which is often prayed in aid, and the Rating Surveyors Association, we were told that the phenomenon of taking the roof off, albeit important, was rare. However, representations by those bodies prompted the anti-avoidance measures on which we will consult in detail next month. To repeat my argument about the consultation, the Bill arises from a finance measure, but its provisions are not part of the Finance Bill, because they deal with local government finance. The usual consultation periods have therefore been changed. However, I assure the hon. Gentleman that full consultation on the “taking the roof off” issue will take place. We listened to representations on that.
I note the gracious way in which the Minister has acknowledged that consultation will take place on the “taking the roof off” issue, but he will remember from Second Reading what we might characterise as the “windy night” debate. I should say, for the benefit of Hansard, that that is “windy night” as in a night when it is windy, not Wendy Knight, whoever she may be—[Interruption.] From Palma, no doubt—a Balearic dance queen, perhaps.
The windy night debate was all about intent. Amendment No. 5 seeks to protect those whose intent to take a roof off is clear. May we have an assurance that intent will be taken into account?
The hon. Gentleman raises a fair point. I shall come to that.
I shall deal first with the reason why charities and community amateur sports clubs are exempted in the Bill. Section 45 of the 1988 Act placed those two categories in primary legislation. I imagine—I do not say this to impugn the intention of the Secretary of State at the time—that he wanted to highlight those exemptions, so he wrote them into the Bill. If I got my newspapers from 1988 back from the Library, I am sure there would be headlines such as “Government exempts charities and amateur sports clubs”. It is because they were specified in the Act and because we are reducing the rate from 10 per cent. to 0 per cent. that we must amend primary legislation and cannot deal with that in regulations. I should have made that clearer before, and I am sorry I did not do so.
Amendments Nos. 2, 3 and 4 would together have the effect of granting a 50 per cent. relief from rates for any owner of an empty property who makes any planning application or appeal. The intention of the amendments, as the hon. Gentleman explained, is to protect owners from having to pay full rates when they are redeveloping an empty property in order to bring it back into use, which is a desirable objective. That is the overall purpose of the Bill. Let me therefore reassure the hon. Gentleman that, under the existing system, in most cases owners of empty property will not pay any rates while permitted development work is under way. From the point that a builder lays a hand on an empty property to start development work, the property can generally be removed from the rating list, and the owner’s rates liability will be zero. The Government have no intention of changing that.
The amendments seek to offer relief from empty property rates from the point at which a planning application is made, rather than the point at which the work to develop the property begins. The effect would therefore be to subsidise owners to keep property empty throughout the planning process, however long it takes, and regardless of whether the owner genuinely intends to redevelop the property. That would provide a huge incentive for owners of empty property to make a planning application even if they did not intend to redevelop the property, in order to avoid rates. That would not only create a massive loophole, enabling avoidance of empty property rates on a major scale, but would generate a huge volume of spurious planning applications, potentially clogging up the system and slowing down decisions for those who have made genuine applications.
I appreciate the concerns expressed by hon. Members about the time it can take to gain planning permission to redevelop empty property, which we have discussed in previous debates. The Government, to be fair—I am always keen to be fair to the Government—set out proposals to improve the speed and responsiveness of the planning system in the planning White Paper published in May. The hon. Gentleman tried to tempt me down that road. However, there is no case for subsidising owners to keep property empty while it is the subject of a planning application or appeal. Until development work actually begins, empty property is quite capable of occupation by an active business, and owners should therefore be liable for the full reformed empty property rate to provide a strong incentive for them to re-let the property, on short-term, flexible terms if necessary.
On Second Reading, my hon. Friend the Financial Secretary to the Treasury drew the House’s attention to the views of a firm that attempts to place small businesses into available commercial property. Let me remind the Committee that in that firm’s professional opinion, the reformed empty property rate will create new opportunities for smaller companies and more innovation and flexibility on the part of landlords.
The amendments would create a loophole that would wreck the benefits of reform, in terms of lower rents and better access to premises, that are anticipated not only by the firm that I mentioned but by the Federation of Small Businesses, Sir Michael Lyons, Kate Barker, the Government, and the right hon. Member for Suffolk, Coastal (Mr. Gummer), who in the previous debate expressed his support for the principal aim of the Bill. The amendments would subsidise owners to keep property empty and place an equivalent burden on to other taxpayers, and they would enable rates avoidance to take place on a major scale. For all those reasons, I have great difficulty with them. Although I accept the Opposition’s objective in seeking to smooth the planning system and to ensure that delays do not cause undue financial penalties on companies, I fear that the proposal would have the opposite effect.
Amendment No. 5—the guard’s van amendment, as the hon. Member for Surrey Heath described it—also deals with planning matters. It relates to paragraph 4 of schedule 1, which inserts new section 66A into the 1988 Act. Let me briefly explain the purpose of that new section. It empowers the Secretary of State and Welsh Ministers to make regulations to deal with rate avoidance tactics that could potentially be employed by owners of empty property, such as the removal of roofs, which we have already discussed. The amendment deals with the application of anti-avoidance regulations in circumstances where property is altered in the course of permitted development work. I assume that the hon. Gentleman wants to prevent the application of anti-avoidance measures if an empty property is damaged when it is genuinely being redeveloped to be put back into use. Let me assure him and the rest of the Committee from the outset that the Government wholeheartedly agree that work carried out under planning permission should not be classed as avoidance activity.
The hon. Gentleman may be surprised to hear that the amendment would achieve the opposite effect of what he and I now agree we want to do. It would require anti-avoidance measures to be applied to properties that were being redeveloped with planning permission, meaning that the valuation officer would have to disregard the change in the state of property for rating purposes. If the amendment were accepted, owners of properties that were being redeveloped could end up paying more in rates than they otherwise would. The amendment has highlighted that point, and I am grateful to the hon. Gentleman for that. However, I reassure him, on the main point of his argument, that the Government agree that work carried out under planning permission should not be classed as avoidance activity. That will be made clear as the weeks go on. On that basis, I ask him to consider withdrawing his amendment.
I am grateful to the Minister for making his case, but he invites us to take on trust his assurances about amendment No. 5 and to accept his argument on amendments Nos. 2, 3 and 4. We cannot do that. He accepts that amendment No. 5 serves the purpose about which we agree, but prefers us to wait for subsequent secondary legislation, while we want the provision to appear in the Bill.
I am grateful to the hon. Gentleman for accepting that we agree about the purpose that we are trying to achieve. However, the way in which the amendment is drafted means that it would provide for the opposite, because development issues would be perceived as anti-avoidance measures. That is my fear.
That is merely a variation of the argument that the Minister powerfully deployed against amendments Nos. 2, 3 and 4, which is that planning would be used as an anti-avoidance measure. We contend that no one would willingly go through the planning system unless they had to, given the system’s scale, complexity and cost, notwithstanding the changes that the Government will try to make—in good faith, I am sure—to planning legislation.
Given that the amendments will provide some protection to those who honestly make changes to empty property to the benefit of the wider economy, we stand by them.
Question put, That the amendment be made:—
I beg to move amendment No. 1, page 2, line 22, at end insert—
‘(4) The third case is where—
(a) the ratepayer is a community owned village hall or community centre, and
(b) it appears that when next in use the hereditament will be wholly or mainly used for community benefit.’.
We have had a long and detailed debate about exemptions this afternoon. A key part of the Bill is the Government’s exemption for charities and sports clubs. We tabled amendment No. 1 because, although 86 per cent. of village halls are vested in some kind of charity, a number still might not fall within that definition. Even if 86 per cent. are covered as charities, an awful lot of village halls and community centres are still not covered.
We have had many debates in the Chamber about the importance of keeping communities together and of village halls and community centres, particularly in rural areas but also in many urban ones. They are of real value to our constituents. The purpose of the amendment is therefore to make it explicitly clear that such halls should not be caught by the Bill.
For a number of years, I was a rural county councillor. I was always amazed by the sometimes bizarre and unusual methods by which people get village halls. Sometimes, farmers give a piece of land and build a village hall for the community. While, effectively, it is the village hall, its ownership might still be vested in a local landowner or prominent member of the community. That is why we moved the amendment.
Such facilities are greatly valued. People often put a great deal of time into painting, upkeep and ensuring that the facilities are available to the local community. It would therefore be a pity if the Bill, a major revenue-raiser of more than £1 billion—the fourth largest raiser of money in the 2007 Budget—were to catch the small proportion of community and village halls that are not registered as charities.
The Minister has a useful opportunity, before the end of play, to set out why the amendment should not be accepted. The amendment would reinforce the good aspects of the Bill, and, as we have heard, charities and sports clubs are covered by it. By slightly broadening the provision, it would ensure the survival of valuable community facilities. The Government should not intend those facilities to be affected by this revenue-raising change. I look forward to hearing his comments.
I appreciate the motive behind the hon. Gentleman’s amendment. I readily confess that my argument is a difficult one, but I shall explain my logic for not supporting his amendment.
The motive of the amendment is to extend to community-owned village halls and community centres the zero-rating liability that the Bill provides for empty properties owned by charities and community amateur sports clubs, where those properties appear likely to be next used for charitable purposes or for the purposes of the club. In essence, the problem is one of definition, as well as of trying to determine where the boundaries of exemptions from rates should lie.
The amendment seeks to protect facilities owned by the community. The hon. Gentleman referred to his experiences as a rural county councillor, and I represent an urban and rural area that has many community and village halls. Once one scratches the surface, however, it is apparent that ownership, and the definition of community ownership, is not always that clear. I remind the Committee that community amateur sports clubs are well defined.
My next argument is that a great many of our village halls and community centres are held by charitable organisations and will benefit from the zero rating of empty properties held by charities. Therefore, that provision does not need amending, and I would have had some difficulty had that not been the case. In addition, the opportunities for charitable registration have recently been improved by the Government.
I remind the Committee of the wide support that the Government are extending to community organisations as part of our strategy of reconnecting with the public, which the Local Government and Public Involvement in Health Bill and other measures address. For example, the £30 million community asset fund has been announced. In addition, on 7 June, we published the departmental third sector strategy, of which a key proposal, subject to the comprehensive spending review, is to support community-owned village halls, community centres and other such facilities. We want to stimulate and develop enterprise by transferring assets to community ownership and management through the expansion of earned revenue. The Quirk report is about exactly that. We are creating more community-owned assets, which makes the issues covered in the amendment more pertinent, and the hon. Gentleman is right to raise them.
Perhaps hon. Members are concerned to ensure that parish councils and other bodies that own community facilities, as well as the community itself, enjoy zero rates liability when the facilities are empty, as charitable bodies will by virtue of the Bill. However, the practical effect of any exemption would always be to remove any incentive for owners of an empty property previously used for a community purpose to bring it back into use. We have concluded that in the particular case of charities, whether they own community facilities or any other type of property, the case for exemption does, exceptionally, outweigh our general presumption that all owners should be subject to empty property rates other than in cases where an exemption is already available. I remind the Committee—again, this is an important point in meeting the hon. Gentleman’s concerns—that properties with a low rateable value of less than £2,200 are exempt.
I might have misheard but, in trying to follow the Minister’s logic, I fear that I might have misunderstood him. Is he genuinely asserting that owners of community facilities, such as those who are responsible for village halls, would wilfully keep those premises empty and would need the goad of the Bill to ensure the efficient disposition of their assets? It seems bizarre that we would have the situation that he appears to have described.
I do not think that there would be examples of people wilfully keeping premises empty, but I can envisage how a bill landing on a doormat might prompt change if a community asset has not been used for a number of years, perhaps because the committee members or the activists who kept things going have moved on. The general presumption of the policy is to give incentives to owners of empty properties to put them back into use. There is a balance to be struck in the case of charitable organisations that outweighs the exemption, with the £2,200 threshold and charitable status covering many village and community halls.
It is much more difficult to extend new zero rates to different types of owner, such as public bodies. Here the problem of definition comes into play. We could all invent exemptions for types of owner and types of building: we could come up with a list of worthy causes as long as our arm. The purpose of the regime proposed in the Bill is to give owners an incentive to return their empty properties to active use, whether they are vacant city offices or rural halls. We do not wish to subsidise properties to lie empty. The application to public buildings, including parish halls and community halls, creates a very difficult situation in which the definition of a community or village hall would make the legislation unworkable.
As I have said many times, we will examine the issue of exemptions in the summer, and I therefore ask the hon. Member for Poole to withdraw his amendment. I congratulate him on tabling it, because it reflects a real argument that will take place in communities, but I think that, on balance, it is likely to foster circumstances whereby community halls would be allowed to lie empty rather than be put to good active use. Nothing is more visible and more likely to damage a community, whether it is a village or an urban neighbourhood, than an empty hall at the end of the road that is usually covered in weeds and graffiti. We want to return such buildings to use for the benefit of the community, and I fear the amendment would not achieve that.
I thank the Minister for the way in which he responded to the debate. The problem is that when certain exemptions are included in a Bill, the question arises of where the boundaries should be drawn, and the arguments are always difficult to deploy.
I have often seen housing developments on the edge of villages or in towns that have included community facilities as some of the planning gain. That leaves the problem of older halls that might need redevelopment and remain empty. A new hall might not be 100 per cent. provided by a developer: it might need new chairs, or redecoration. This tax proposal could well affect the ability to provide first-class facilities for communities that badly need them and that would use them.
I am sorry to tell the Minister that we will press the amendment to a Division; it is one of those afternoons. I hope that, in due course, he will take account of the arguments, particularly in his consultation.
Question put, That the amendment be made:—
It being after Five o’clock, The Second Deputy Chairman of Ways and Means, proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour. pursuant to Order [this day]
Clauses 1, 2 and 3 ordered to stand part of the Bill.
Schedules 1 and 2 agreed to.
Bill reported, without amendment.
Order for Third Reading read.—[Queen’s Consent, on behalf of the Crown, signified.]
I beg to move, That the Bill be now read the Third time.
In earlier debates on this Bill, my hon. Friends the Economic and Financial Secretaries to the Treasury and I explained why the Government consider this Bill to be such an important piece of legislation. The current policy on the rating of empty properties is based on a set of economic circumstances that simply does not exist in the UK today, and which does not fulfil the requirement for the efficient use of property and the regeneration of brownfield sites to meet our housing needs.
The Government’s commitment to regeneration and to meeting those needs cannot be faulted, and I assure the House that that will remain the case, but I have also made it clear that devoting more than £70 million in tax relief every year to the owners of empty properties in Westminster is simply unjustifiable. Consequently, it is time to reform the blanket relief extended to empty commercial property. In place of that relief, the Government are moving their support for regeneration and renewal towards a brand new, and much better targeted, 100 per cent. capital allowance for the renovation of property in our assisted areas. I strongly believe that that meets the points made by hon. Members such as my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley), Opposition Members and Liberal Democrat Members in interventions and in speeches.
We have introduced this new allowance now, so that owners of unlet property in these areas can take advantage of the new incentive before the changes to empty property rates. Furthermore, we have consulted on a wider application of land remediation relief to a much broader range of contaminated and derelict brownfield sites specifically in order to promote efficient use of our developed land and to help protect greenfield sites. I believe that those two measures allow policy to meet the reasonable and correct objection made by a number of hon. Members on both sides of the House that there are different types of market in different parts of the country. That point was made by constituency Members of Parliament as well as by hon. Members speaking on a wider policy agenda. I ask the House to consider the other measures that I have mentioned in the round with this measure. I hope that my hon. Friends, and Opposition Members, will see that the Bill is part of a much wider package of measures, supporting regeneration but also meeting the needs of business and our communities for active property markets and efficient use of land.
We have decided that for charities and community amateur sports clubs there will be 100 per cent. relief from empty property rates. These organisations play such a key role in our society, often leading regeneration efforts, and the Bill offers substantial additional help to them. For the rest of the business community, this Bill will reduce rents and provide opportunities for new companies, expanding companies and companies wanting to join the most successful economy in the G7.
I repeat what I said in the Ways and Means debate and on Second Reading. We have the successful policy of linking business rates—or non-domestic rates as they are properly called—to the retail prices index cap. As that business rate is based on rental value, not capital value, the successful implementation of the policy in bringing rents down over the years will indeed, as the Red Book acknowledges, see a diminution in the revenue that it generates, the more successful it becomes. That is the serious answer that my hon. Friend the Financial Secretary gave to the serious objection that the hon. Member for Surrey Heath (Michael Gove) has raised.
This is, of course, a revenue-raising policy. It was a policy announced as part of a Budget package and its process through the House has been unusual. I am grateful to the House authorities for their guidance and advice in this regard. However, it is far from the case that the Bill is simply a matter of raising revenue. It also embodies a policy on land use and properties, and our own Red Book acknowledges that there will be a diminution in the revenue raised. As the cap on business rates exists, the total yield from business rates cannot rise higher than inflation.
It is undoubtedly the case that my right hon. Friend the Chancellor has made a huge contribution to growth in the UK economy and to moving it into a state fit to compete with the best in the 21st century. He has provided research and development tax credits, a boost to science budgets and lower rates of corporation tax—which of course have to be taken into account when considering the proportion of revenue raised from business rates, because corporation tax has come down, and come down again this year. In addition, there are new investment allowances for all firms. Those are all parts of an economy that can also deliver a minimum wage, expanded support for child care and greater protection for the elderly and most vulnerable in society.
There is one league table that we are not willing to sit atop—the ranking of rents paid by firms to locate in our towns and cities. High rents might be a sign of companies recognising the attractiveness of locating in the UK, and to some extent a marker of how successful we are, but in a global economy they are not the measure of success we want, nor something we can afford in the long term. Let me reiterate: we are not saying that high rents are a result of landlords deliberately playing the market. We recognise the value and importance that property investment and property developers play in our economy.
Nevertheless, we have been presented with recommendations from the Barker report—Kate Barker is one of the country’s top economists—and from Sir Michael Lyons, the leading expert on local government finance and incentives, both of which pointed to what my hon. Friends at the Treasury would call the supply side advantages of reducing tax relief for empty property, so as the Chancellor made clear to the House on Budget day, we are introducing the Bill both to answer criticisms that supply is distorted by the current relief and the different treatment of types of property, and to provide new opportunities for start-up and expanding firms.
However, we are not insensitive to the possibility that conditions can change, which should not be seen by the hon. Member for Surrey Heath as a weak link or an admission that we are heading for recession. That would be unfair and ridiculous, but of course I know that he would not say such a thing. I pick up The Times every day to see what he has written. I enjoyed his column about “Big Brother”, and strongly agreed with him; I was grateful that he did not write about the Bill—although not as grateful as his readers will have been.
Unlike the last time such a policy was considered, I am not suggesting to the House that the rate of tax be set in stone so that it is impossible to respond to changing situations. That is why we took the approach in the Bill—the point came out during our debate on the first group of amendments. Similarly, we know that leaseholders holding unwanted property are an important group for special consideration; hence our agreement to consult on how best to introduce in the tax system recognition for payments made by companies to rid themselves of onerous leases. Nor are we attempting to remove the returns from property that many investors enjoy; a Government with a track record of introducing real estate investment trusts, providing a framework for parallel treatment of property held by authorised investment funds and maintaining the stable growth in the economy that is the basis of strong demand for property could not fairly be accused of that.
I hope, therefore, that our willingness to look at the issue in the round and to be flexible in our legislation, as well as the package of measures and ongoing consultations, will serve as proof to the House that this really is a measure to expedite change for the better, and that we will continue to provide help where it is most needed. This is a short Bill, but it will deliver important economic, social and environmental results so I hope that Members on both sides of the House will wish it speed. I commend it to the House.
It is a pleasure to take part in the Third Reading debate, as it was to take part in the Ways and Means debate, Second Reading and Committee stage. It has been a particular pleasure because of the calm, courteous, always amusing, helpful, thoughtful, lucid and authoritative contributions of the Minister for Local Government.
I am moved to compliment the Minister on his choice of newspaper. I did not know that he was a reader of The Times, and I am grateful that he enjoys that newspaper, as we all do. However, I must commiserate with him on the conclusion of the paper’s leading article on the question of who should be deputy leader of the Labour party, and in due course Deputy Prime Minister. The Times plumped for the right hon. Member for Salford (Hazel Blears) as deputy leader of the Labour party.
On a point of order—
Order. I know that the hon. Member for Surrey Heath (Michael Gove) has been led slightly astray by the Minister, but we are on Third Reading of the Bill, and the debate should be about the Bill’s contents.
I am grateful for that guidance, Sir Michael. I was simply directed by the knowledge that the Minister has been playing a part as campaign manager for one of the candidates in the deputy leadership race. There is another campaign manager for another candidate in the Chamber at the moment—whose interest in the Bill I am grateful to see at this stage.
As well as hearing from the Minister for Local Government, we have been fortunate to have the case for the Bill made by the Financial Secretary and the Economic Secretary. As I remarked in Committee, their presence in our earlier deliberations—and the presence of the Financial Secretary now—is welcome, but revealing. In a way, we have seen the hand of the puppeteer. We have seen the real moving spirit behind the legislation, in the presence of Treasury Ministers.
It has been our contention throughout that the Bill is not about the right way to incentivise the use of commercial property; it is about providing the Chancellor of the Exchequer with roughly an extra £1 billion a year to dispose of. The presence of Treasury Ministers is a powerful piece of evidence to underline that case, but there is also the fact that when we asked for evidence from the Government to prove that there are individuals who are deliberately and wilfully keeping property vacant, that evidence was never produced. For all the vaunted eloquence of Treasury Ministers and Ministers from the Department for Communities and Local Government, we lack evidence that the Bill is required or will change the behaviour of people in the commercial property sector in a beneficial way.
When we were discussing the last amendment in Committee, the Minister said that the Government did not wish to subsidise buildings to lie empty. It is a view shared across the House that wherever possible, buildings should be put to effective use, but we profoundly differ from the Government over the contention that the Bill would ensure that land and buildings were used more effectively. Although we were treated to a number of ingenious, entertaining and informative arguments at each stage of the Bill’s progress, we were denied any proof—certainly any proof that would convince anyone with a knowledge of the commercial property sector—that the Bill would ensure that property was better used.
It was striking that, as the Bill made its way through the House, people outside the House who have an interest made their view known in a powerful way. On Second Reading, the Minister sought to convince us that because the Federation of Small Businesses—
And the Evening Standard.
And the Evening Standard. The Minister sought to convince us that because the FSB had supported a change in the legislation we should accept what he was trying to bring about. However, on Second Reading we heard from my hon. Friends that the case made by the Federation of Small Businesses was much more nuanced than the Minister might have led us to believe.
Even if the Federation of Small Businesses might appear to be a supportive, if equivocal, witness on the Government’s behalf, the weight of its testimony was overborne by the weight of testimony from other organisations, which were critical of what the Government sought to put forward. The Royal Institution of Chartered Surveyors, the Confederation of British Industry, the British Property Federation and the British Retail Consortium all felt sufficiently moved to argue outside the House that what Ministers were advancing was directly contrary to the commercial interests not just of their members but of the country. However, Ministers did not address their arguments head on, or accept that the competitiveness and flexibility of the commercial property market would be hit by the measure. Because they failed to acknowledge that, I have to say that—however eloquently they defended their position—the case was not made.
I suspect that the question “Why do properties lie empty?” is at the heart of the Department for Communities and Local Government’s aim in bringing forward the legislation; it is certainly at the heart of what the Minister claimed was its aim. On Second Reading, Opposition Members brought forward a compelling narrative that explained why vacancies and voids occurred. Vacancies and voids are a natural consequence of a healthy market; we made the point that in the commercial property sector they sometimes last between 12 and 24 months, as one business winds down and a new business is put in place. We said that the legislation, which will end relief after three months, takes no account of the pace and tempo of operations in the commercial property sector. Furthermore, in debate on the Ways and Means resolution, on Second Reading and in Committee we pointed out that the real reason why properties lie empty and unused when they could be put to good commercial use derives from the planning system.
In our previous deliberations, I remember my hon. Friends the Members for Salisbury (Robert Key), for St. Albans (Anne Main), for Ludlow (Mr. Dunne) and for Bromley and Chislehurst (Robert Neill) pointing out a variety of examples, taken from their constituency casebook or furnished to them by interested parties, of cases in which commercial concerns wished to see their properties filled, but were prevented from filling them by the operation of the planning system.
When we discussed the Bill in Committee, we put it to the Minister that he should seek to amend the legislation to take account of the weaknesses in the planning system. We said that he should, at the very least, furnish us with evidence that the planning White Paper and the legislation consequent on it would deal with those problems. Regrettably, he once again disappointed us. He certainly showed—I am grateful for his sensitivity in acknowledging it—that he was aware that our case was not ill-founded, frivolous, or made in a spirit of partisan wrecking. He acknowledged that all the points that we made were genuine and rooted in the experience of our constituents or commercial organisations with genuine expertise. He acknowledged that, and we thank him for it, but he did not provide any measure of intellectual relief, as it were; he did not show how the changes that the Government would make to the planning system would ensure that property was used in the most effective way.
When talking about planning and the justification for the measure before us, the Minister prayed in aid Barker and Lyons. They were the two presiding deities in whose name the Bill was introduced—but again, one of the things that he failed to acknowledge throughout our debates was the fact that he had been quoting selectively from the Barker review and the Lyons report. The Barker review made it clear that when considering non-domestic rates, it was important to acknowledge that relief was a balancing mechanism; relief is there to ensure that when no commercial activity is taking place, no taxation penalty is exacted. There has been no reflection of Barker’s acknowledgment of that balancing mechanism either in the case that the Minister made or in the legislation.
As for Sir Michael Lyons, the Minister calls him perhaps the greatest expert on local government finance whom we know. I respectfully submit that when it comes to authorities on local government finance, my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) and my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles)—and the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), for that matter; I am happy to concede that point—are entitled to take their place alongside Sir Michael. Nevertheless, we both agree that Sir Michael Lyons is a pretty big cheese in the world of local government finance. Why is it, then, that the Government are prepared to take only the crumbs that they consider savoury, and push the rest to the side of the plate?
Sir Michael Lyons made it clear that changes to non-domestic rates should be taken in the round, should be introduced after consultation, and should not be made before 2010. As we have pointed out at every stage, the changes are piecemeal, and they are being introduced early, after inadequate consultation, simply so that we can ensure that the Treasury is satisfied with its yield.
The Minister mentioned his hon. Friends in the Treasury, which put me in mind of the television series “Our Friends in the North”, because the Opposition inferred that the legislation was introduced by friends in the north, who were the heavy mob. In the presence of the Financial Secretary by the Minister’s side, we see a representative of management who is here to ensure that the legislation delivers what it was meant to deliver: a tidy sum into the coffers—no questions asked, squire—to ensure that the big guy in No. 11 gets what he wants. It is for that reason that we find the legislation profoundly unsatisfactory. It has been introduced to balance the books, which an improvident Chancellor over the past 10 years has failed to balance in the nation’s interests.
I should like to develop some of the comments that I made in the Ways and Means debate, which were consolidated by my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) on Second Reading.
Time sat rather heavily on us this afternoon. It was enlivened by some erudite shafts of wit from the hon. Member for Surrey Heath (Michael Gove) and some rather nice turns of phrase that we may hear again on “Newsnight Review”, but apart from that, it was rather heavy going. I want briefly to recap the basic arguments about the Bill, at the heart of which is a perfectly sensible proposition about providing an economic incentive to use property more efficiently. We have three basic reservations, which have been partly, but not entirely, alleviated. The first concerns the process, particularly the consultation; the second concerns the Government’s motives, particularly the revenue aspect; the third concerns unintended consequences and special problems arising from the fact that there is no such thing as a uniform property market, as that market is complex and variegated.
It is true, as the Government argue, that if we impose an economic penalty on unoccupied property, business has an incentive to use property more intensively and cut rents to fill it. The model is obviously sensible in a simple market framework, but the position is a little more complicated than that. I reread the Lyons report and what Barker had to say. It was interesting that Sir Michael Lyons quoted Stiglitz, one of the top global economists—I am not sure whether he is a Nobel laureate, but he has certainly been lined up for that prize—who tried to set out the basic economic arguments about empty property and taxation. He made the point that the property market is different from markets in apples and pears, or in cars, because entrepreneurs have to build property ahead of demand—that is the nature of the business—so a certain amount of spare capacity is built in. There is a risk associated with that, particularly if there is a risk of being penalised for creating excess capacity. The economic argument is that there is a good case for empty property taxation relief, because risk sharing is involved. Without that relief, investment would never take place. At issue, therefore, is not the principle but the period within which it is sensible to create empty property relief to encourage the healthy growth, as well as the balancing, of the property market.
The first of our three main concerns is about the process. It was clear from the Lyons report that Lyons himself envisaged a much longer period of consultation before his recommendation was put into legislation. The Government are consulting about exemptions, and they are consulting separately about particular problems with leases, which is welcome. That is welcome, but the fundamental point, which has been made several times by the hon. Member for Surrey Heath, is that when the results of those consultations bear fruit, they will take the form of secondary legislation, which will not be subject to the same extensive scrutiny as the Bill. The process is therefore not as satisfactory as it could be.
Secondly, it is clear that the Bill is a revenue-raising measure. Ministers have turned that to their advantage as a debating point by saying to the Opposition parties, “Well, if you’re against the Bill, how would you raise the £950 million?” That is a fair debating point, as far as it goes, but it raises the obvious question about who pays that £950 million. I have never been clear who the Government think would pay it. They would argue that it is not paid by the tenants of commercial property, because they argue that rents will fall. When Ministers were challenged, from the Liberal Democrat Benches I think, about the potential impact on institutional investors who have extensive property portfolios, they said that those investors would not lose anything either, because there would be an increase in profits in the sector.
So how will the miracle happen whereby the Government acquire substantial revenues—£950 million, although admittedly those would be regressive as rents fall? Who will pay? No one, apparently. There is something odd about the logic. If the Government were a little more honest and accepted that there will be serious losers in the property sector, at least we would be clear about their thinking. The Government could argue that, to a degree, nobody is a loser if the whole system becomes much more efficient and the British economy becomes more efficient. That could indeed be the case, but I have not heard it explained what the Government’s objectives are.
We know from the helpful tables at the back of the Library research paper that the average level of voids is about 9 per cent. in England and Wales. Sophisticated property companies probably operate on a 6 to 7 per cent. basis. It would be interesting to know what the Government think the natural level of vacancy should be, and how realistic it is to expect that to be achieved. Unless the level falls, the property sector will pay more, and that will be paid by the owners, who are usually institutional investors, or by tenants, directly or indirectly. Somebody must pay.
The third set of issues relates to the exemptions and the special difficulties, which fall into two parts. The first was debated extensively today, and I will not review all the arguments, which were well made, about the problems associated with legal difficulties, planning and historical buildings. Those will have to be dealt with. The second set of issues, which has not been debated, involves the differences between different parts of the country. In the Ways and Means debate and on Second Reading we argued about the particular problems that were said to be likely to accrue in areas like Wales, where there have been many factory closures, and parts of west Yorkshire, which are subject to regeneration, and the difficulties that those areas have.
Regeneration often takes place in the industrial sector by advance building, with an expectation that property could remain empty for a considerable time. It relies very much on speculative building on industrial estates, so those areas could be penalised. One of the difficulties that I have in trying to understand what is going on is connected with the differences between different parts of the UK. Perhaps the Minister can explain. I am not trying to make a point. I am trying to understand what is going on. There are big differences between different local authority areas.
It was not surprising that the biggest area of unused property in Britain, let alone in London, is Hackney, because Hackney is an extremely problematic area with serious regeneration difficulties. There are some strange anomalies. My own borough, which is quite prosperous and is rapidly growing, has a vacancy rate of about 6 per cent. Next-door Hounslow, which is equally dynamic, has a vacancy rate of about 14 per cent. Manchester and Birmingham, which have problem areas, have very high vacancy rates. Newcastle, which has the same problems, has a very low one. Why these enormous discrepancies occur, and what the impact of the Bill will be on them, is not clear to me. The Government have expressed their willingness to be flexible—if, for example, there is a period of recession—but how flexible can they be in recognising the differences in different parts of the UK and in allowing regional exemptions? Many of those issues will be pursued in the other place, as there are clearly a lot of unresolved questions.
Question put and agreed to.
Bill accordingly read the Third time, and passed.
On a point of order, Mr. Deputy Speaker. I know how much Mr. Speaker deprecates ministerial statements being given to the media before they are made to this House. Yesterday, rather uniquely, the Home Secretary made a ministerial statement and admitted that he had briefed the press in advance, and in fact appeared in television studios. What can be done to ensure that in future, hon. Members are informed before the media?
The hon. Gentleman is right: Mr. Speaker feels very strongly that any important ministerial statements should be made to this House before they are discussed elsewhere. It is, of course, down to Ministers to observe that rule. The hon. Gentleman has made his point, it is on the record, and I have no doubt that Mr. Speaker will take note of it.
North-East Regional Spatial Strategy
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heppell.]
I am grateful for this opportunity to raise the complex issues of the north-east regional spatial strategy. The regional spatial strategy is the blueprint for future development in the north-east, so, if we are to flourish, it must reflect the needs and aspirations of the region. The Chancellor of the Exchequer has stated that his objective is to equalise growth rates across the country. Under the Northern Way strategy, it was agreed that our objective should be to narrow the output gap of £29 billion between the north and the south. Despite claiming to be a document that will tackle deprivation, create a buoyant employment market, and adopt an holistic approach to climate change and energy use, the detailed plans completely fail to do that. On this matter, County Durham speaks with one voice. All the local authorities, county and district, and all the county’s Back-Bench MPs are united in our concern about the plan.
Our argument is clear: the regional spatial strategy underestimated the potential for new investment, economic growth and jobs. In doing so, it put a clamp on our excellent, existing employment sites. Consequently, housing allocations are too low and the transport plans inadequate. By concentrating development in the city regions, it does nothing to cut travel-to-work distances, promote sustainability or counter climate change.
NETPark is a highly successful collaboration between Durham university, the county council and the private sector. Let me give one example of what has happened in my constituency as a result of our having NETPark in County Durham. Thorns, the lighting manufacturer, which has its headquarters in Frankfurt, has decided to build a wholly new site, guaranteeing 600 jobs for another 20 years, partly because there is collaboration between the private sector and the university to develop organic lighting at NETPark. That is the best of modern manufacturing. However, by limiting the development at NETPark to 13 hectares instead of the proposed 49 hectares, the regional spatial strategy compromises its stated goal of facilitating north-east regeneration through what it calls
“a significant expansion of the knowledge economy.”
A 49-hectare development at NETPark would bring in an estimated £100 million in project investment and create 10,000 jobs. It would also support the further expansion of Durham university. In the Prime Minister’s words, it would
“create the wealth and prosperity which will generate sustainable jobs and a vibrant, confident North East”.
Similarly, a proposed film and media complex at Seaham in Easington would facilitate residential development and university expansion, create 1,800 jobs and generate nearly £200 million of inward investment. Instead of the green light being pressed on that development, it has been put on amber.
Durham county council estimates that the proposed expansion of Heighington Lane West in Sedgefield and the Tursdale regional freight facility could create an additional 11,000 jobs in the region. The latter has been blocked and the former is to be re-examined.
By failing to sanction the proposed expansion of the biofuels plant at Seal Sands and a renewable energy village at Eastgate, the regional spatial strategy makes it difficult to transform the north-east into a thriving green economy.
Instead of the knowledge-based economy that we want and believe to be completely possible, we are, as the North East chamber of commerce says, contemplating a low wage one. It is little wonder that the North East chamber of commerce has criticised the strategy for
“stifling the emerging dynamism of the North East”.
The Northern Echo has launched a “Shaping the Future” campaign asking the Government to reconsider the proposals.
Not only does the regional spatial strategy assume that, between now and 2021, growth in the region cannot exceed 2.8 per cent., but, by placing restrictions on the employment and housing sites, it will prevent growth from being higher than that estimate.
In other words, the regional spatial strategy is planning for failure. The negative impact of those gloomy growth forecasts is felt most acutely in the housing allocations. Despite net inward migration, which the north-east has experienced in recent years, and the poor quality of housing stock, the regional spatial strategy plans a net increase of 6,500 new properties a year—a small fraction of the 120,000 homes a year that the Barker report stated was necessary nationwide.
Although I appreciate the need not to overdevelop in specific areas, especially on the western side of my constituency, to protect the beauty and tranquillity of the local environment, a high level of sustainable development is clearly possible in the north-east. In County Durham, the regional spatial strategy proposes only 19,000 net housing additions between now and 2021, which equates to 1,100 homes a year. However, the county council believes that we need at least 1,300 homes a year simply to maintain the population at its current level.
Indeed, the Wear Valley 2004 urban capacity study concluded that, in my constituency of Bishop Auckland—I hope that the Minister for Local Government realises that it has twice the national rate of homeless households—there was substantial additional scope for building new houses on brownfield sites. Indeed, if the regional spatial strategy aspires to go beyond its conservative ambition of building 70 per cent. of new houses on brownfield sites, it is essential to consider those in Wear Valley and around Bishop Auckland.
In County Durham, where the regional spatial strategy predicts population decline, the latest Office for National Statistics figures suggest a 3 per cent. population increase. That further highlights the need for the Secretary of State for Communities and Local Government to re-examine the figures before committing to binding proposals.
Let me consider transport. Two years ago, shortly after I was elected, we held a conference on the local economy. Local businesses raised the major issue of poor transport connections, which anyone who has travelled along the main road through Yorkshire or tried to drive north to Scotland has experienced. There is also significant overcrowding on the east coast main line. We in the region are united in our view that Teesport is a vital development. Yet on none of these issues is there any firm commitment.
I am sure that you will appreciate, Mr. Deputy Speaker, the very great frustration that we feel over this spatial strategy. Moreover, I find the document’s underlying premise incomprehensible. We are not setting out to compete with our colleagues in Newcastle, but the fact is that we are constantly hearing from Members who represent constituencies in the south-east that they are overdeveloped, that there is congestion and excessive housing development—yet in the north-east, we are crying out for more. I very much hope that the Government will not endorse this plan for failure and will look again, so that we can fulfil our potential.
I congratulate the hon. Member for Bishop Auckland (Helen Goodman) on securing this Adjournment debate. It has proved extremely timely and I have to say that I agree with her. One of the arguments that she has put forward against this plan applies equally to many areas in Northumberland. I represent a rural area, which will suffer from virtually no development over the period of the plan. Indeed, Tynedale council has an allocation of fewer than 200 houses over the next five or six years—totally inadequate.
Many families in my constituency wish to own their own homes. I am not talking about affordable homes, which is a somewhat separate matter I am referring to ordinary families who want to own their own houses, but who are increasingly priced out of the area because my constituency now has million-pound houses: the era of million-pound houses has arrived. People cannot afford to live there, so families are moving from rural Northumberland areas into the Durham area, where they can sometimes buy houses cheaper, particularly around Consett. That can break up families and the loyal connection that many people have developed with their communities.
If that trend continues, the very people on whom rural communities depend to provide services in future years will not be there. We can see the problem in places such as Gloucestershire and we do not want to repeat the same mistake, having to bring in people from the cities to run shops, entertainment centres, pubs, hotels and other services in country areas. We want to maintain a healthy, balanced community and the regional spatial strategy simply does not meet those requirements.
The hon. Member for Bishop Auckland also mentioned transport and I suspect that the right hon. Member for Berwick-upon-Tweed (Mr. Beith) will have a lot to say about it, too. The A1 Newcastle western bypass is the most heavily used dual carriageway in the UK, and we have been promised time and again that there will be a review of the problems caused by that congestion. We were told that the Department for Transport had a plan on how to improve that highly congested bit of road, but the regional spatial strategy has now changed the terms of that plan by stating that the Department is only “investigating” the prospect. We have moved from a situation in which we were encouraged to believe that there would be a plan to solve the problems within the next few months to one in which the problem is simply being investigated, as the appropriate paragraph of the regional spatial strategy makes clear.
The regional spatial strategy also talks about “investigating” improvements to the Tyne and Wear metro system—a very important part of transport infrastructure, which is now 30 years old and beginning to show wear and tear. Nexus, the transport authority, had put forward a plan for its modernisation, but once again, the regional spatial strategy has downgraded it to a problem to be investigated.
I agree with the hon. Lady and I believe that the regional spatial strategy is, to use an awful cliché, not fit for purpose. I hope that the Government will go back and revisit it once again.
I congratulate my hon. Friend the Member for Bishop Auckland (Helen Goodman) on securing this timely debate. The regional spatial strategy has more to do with the era of Soviet-style planning than a modern dynamic economy such as the north-east’s. It will put a stranglehold around County Durham, which will affect not only jobs and industry, as my hon. Friend has articulated, but, more importantly, as the hon. Member for Hexham (Mr. Atkinson) has outlined, the actual make-up of communities. I would like to concentrate mainly on the housing element of the regional spatial strategy.
My constituency is growing in size because people are moving to County Durham for some of the reasons that the hon. Member for Hexham has outlined. If the proposals are agreed to, not only will the number of new house builds in my constituency not meet the existing demand, but house prices, which are already quite high, will go through the roof. The proposals would also not allow councils and other agencies to redevelop some of the former mining villages in my constituency. When I was elected to this place in 2001, one of the first things that I did was to ask Northumbria university to carry out a study of the dire need for housing and redevelopment in those villages. Chester-le-Street district council has taken on board some of the findings of that report, and it is using some of the development sites to cross-subsidise other developments involving social housing and other projects in the villages. That redevelopment plan will be extended to other villages across County Durham, but unless we add to it the housing element that can be put to private development, the schemes will not stack up financially.
It is ironic that such schemes across County Durham have been supported by central Government and by English Partnerships—they have worked up a plan with Government money—while at the same time, a restriction has been put in place that will prevent any of those developments from happening. That will be as bad as the old D-notices that were put on villages in County Durham during the 1960s and 1970s. Some of those villages will actually die, as the hon. Member for Hexham said, because people will not be able to afford to live in them. Furthermore, the population in those areas will grow increasingly old, which will put a great deal of pressure on social services and the remaining communities.
I cannot over-emphasise how disastrous these proposals are for the future of my constituency and for County Durham. It saddens me that they are seen to be needed at all. I support proper planning regulation and local people having a say in their local district’s unitary plans; that is the way in which to do planning locally—we do not need some top-down centralist approach such as this.
When I asked about the public scrutiny of the strategy, I was told that the regional assembly had been overseeing it. I have to say that if this is an example of the assembly’s scrutiny, it simply reinforces my view that the North East assembly needs to be abolished.
I congratulate the hon. Member for Bishop Auckland (Helen Goodman) on securing this extremely valuable debate. I agree with the hon. Member for North Durham (Mr. Jones) that, in respect of housing, the regional interim strategy is an outdated relic of Soviet-style planning. It is simply not necessary; it is also harmful and damaging.
A survey has just revealed that median house prices in my constituency are six to seven times average earnings. People who were brought up there and who work there cannot afford to live there. If the strategy is continued, and areas such as Berwick and Alnwick are allowed to build only 60 or 70 houses a year, the price of the existing housing stock will soar even further, and the impossibility of people buying a house locally will extend to more and more people in my constituency.
In the meantime, the builders will not go down to Tyneside and build 100 houses because they have been denied the opportunity to build 10 somewhere near Berwick. They will either give up that side of their work completely or move over to Berwickshire, in Scotland, where these restrictions do not apply, and build houses there. This process is not going to assist the regeneration of the central urban areas in the region. Social housing simply will not be built, partly because it is increasingly dependent on deals involving private sector building, as the hon. Member for North Durham pointed out. In many rural areas, it also involves the conversion of, and sensitive development around, existing buildings.
Relaxation of the housing limit would not harm anyone. The builders would not go mad and build vast numbers of houses that nobody wanted to buy. They understand the market, and they know that they have to sell the properties that they develop. There is no reason to suppose that a vast explosion of house building would occur if the restrictions were taken away completely from the rural areas that I represent.
Is not the real point of the local plan that local people have an input in dividing up their local unitary development plan? That would lead not to a free-for-all but to sensitive development, and at least local people and councils would have a say over it.
Existing planning laws, regulations and practices are a sufficient protection for all the things that we care about. They ensure that we have a village envelope, that there is not continuous building from one place to another, and that building is subject to some restraint. Central Government must say to the north-east, “You don’t need to impose this kind of restriction on housing.” That restriction arises from central Government pressure to impose such restraint. I ask the Minister to lift that restraint and to tell the regional assembly to forget about putting housing limits on areas such as the one that I represent or other parts of rural Northumberland or County Durham.
Transport is another issue, which the hon. Member for Hexham (Mr. Atkinson) mentioned. A lot of our problems in relation to the A1 date from the extraordinary practice of referring matters to the interim regional transport board, which then overlays whatever is in the spatial strategy. The Minister of State, Department for Transport, the hon. Member for South Thanet (Dr. Ladyman) now blames that for the failure to dual the A1. It has become a useful buck-passing exercise, but the way in which the matter has been handled makes a nonsense even of the aspirations in the plan.
One other element of the regional spatial strategy that is causing anxiety to many of my constituents is the vast number of wind farm applications. The reason that we are getting so many in the beautiful area that lies between the area of outstanding natural beauty and the Northumberland national park is that it is an area of least constraint in relation to wind farm applications. That is not simply a bit of gentle guidance to planning authorities to consider each case on its merits, but is having the effect of funnelling lots of applications into the area. Local planning authorities do not have the capacity to cope with those applications—they do not have the staff to deal with them, still less the large developers that they face. One of the effects of the strategy has therefore been to place an unreasonable burden on giving proper consideration to wind farm planning applications in a beautiful area where each case must be considered extremely carefully. The risk of harm to the landscape, the environment and tourism must be placed against the objective to expand our renewable energy generation.
The regional spatial strategy is not popular in my constituency. It imposes a wholly unnecessary and extremely damaging restriction on the provision of desperately needed housing, and its effects in relation to transport and the handling of wind farm applications are not benign either.
I, too, pay tribute to my hon. Friend the Member for Bishop Auckland (Helen Goodman) for securing the debate and for her excellent exposition of the key issues relating to County Durham.
This very long process started in 2005 with the submission being put on deposit for six months. Evidence was then taken for 14 weeks from 98 organisations. Then the panel made a series of visits around the region, as I presume that the panel knew nothing about the region to begin with. Then there were revisions. The Government then had about eight or nine months to comment on the revisions. We are now in a period of consultation on the Government’s response. Changes will then be made. Finally, another eight-week period of consultation will take place. I apologise to the House if I have missed out a stage in the process, because it is labyrinthine in the extreme. I am not sure how the public or their elected representatives are supposed to engage in it.
After all the drafts, counter-drafts, evidence and deliberation, the document has ended up being extremely damaging to my constituency and my constituents in a number of ways. First, on housing, which other Members have mentioned, the figures in the document would allow a couple of hundred houses each year to be built in Durham from now until 2021. We have independent planning inspectors’ reports showing that, because of the backlog in the provision of affordable housing in Durham, about 500 units a year are needed just to catch up.
It being Six o’clock, the motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.—[Tony Cunningham.]
The allowances would not enable us to deal with the backlog. The underlying message is that the Government do not consider County Durham to be worthy of growth, but it is an environment where there should be growth.
The second issue that I want to raise is that of the Tursdale rail freight depot. After many years, we have a developer who has experience across the country of providing rail freight depots and who wants to develop one at Tursdale. That has been taken out of the regional spatial strategy as a potential opportunity apparently because it will get in the way of the development of the ports of Tyne and Tees. However, extensive arguments have been made to suggest that they are complementary developments. There is not necessarily any competition between the two, but the Government have not taken that on board.
The third issue that I want to raise is that of NETPark. It is not in my constituency but it provides the space for the spin-out companies from Durham university, which is in my constituency. We know from the regional economic strategy and its action plan that the Government and One NorthEast want to develop a knowledge base as the basis for future economic development in the region. Durham university and its spin-out companies will be critical to that. Yet the development of NETPark will be capped. Not only does that not make any sense, but there seems to be no alignment of the regional spatial strategy and the regional economic strategy. That also sends out a very damaging message. We are trying to raise aspirations in County Durham and get our young people jobs in the knowledge sector, yet they are being denied that by the document. That is not acceptable.
My last point relates to sustainability. It is important that we mean what we say in our rhetoric and develop sustainable communities. That means having employment bases that are close to our communities and not dragging everybody in County Durham either north to the Tyneside area or south to Teesside to get employment. The transport network for that does not exist and there is nothing in the document to develop it. Crucially, we must take the environmental concerns on board and develop economic bases close to communities when that is possible.
If ever there was an argument in favour of unitary government in County Durham, this is it. We must have unitary local government so that we can have a strong voice, play our card effectively in the region and ensure that the needs of County Durham and its constituents are well heard by the Government. I want to hear what the Minister has to say about needing a regional policy from the Government, so that they start investing seriously in the north-east to give all our young people and workers secure and good jobs for the future.
Congratulations are due to my hon. Friend the Member for Bishop Auckland (Helen Goodman) on securing the debate at a timely point, as I think the right hon. Member for Berwick-upon-Tweed (Mr. Beith) described it.
The Government of course share the ambition for the north-east region and have a proud record in investment and in improving its economic prosperity. The test, however, is for us not only to improve gross value added in the north-east, but to narrow the gap between the north-east and the rest of the country. We could achieve that goal by reducing the GVA for the rest of the country, but having discussed the possibility, we decided that it was not appropriate. The setting of that test presents us with a real challenge. I know my hon. Friend agrees that it would be unfortunate and unfair if the successes of the region were diminished by the difficulty of the test that we have set ourselves.
The timeliness of the planning of the House’s business has ensured that a wide range of opinion has been expressed from across the region, both geographically and politically. I never thought I would hear my hon. Friend the Member for North Durham (Mr. Jones) and the right hon. Member for Berwick-upon-Tweed unite in describing a process as a Stalinist conspiracy.
Soviet-style.
A Soviet-style Stalinist conspiracy.
As the Members who have spoken reflect the whole region geographically and politically, it is particularly important for the Government to take account of what has been said. I congratulate Members on raising these issues.
I am happy to set out the background to the regional spatial strategy, the current state of play and the next steps in producing a final version for publication by the Secretary of State. However, my hon. Friends and, I hope, Opposition Members will appreciate that because of the nature of the process I am constrained in what I can say at this stage. The propriety guidance provides that once a regional spatial strategy revision has been submitted for examination, Ministers and their officials ought not to enter into discussions with interested parties on the changes that may be made. The purpose is to ensure that the process is fair and transparent by channelling representations on a draft revision through the examination in public and the statutory consultation process.
The House is, of course, the forum for debate on emerging Government policy, and I have the opportunity to set the process before it. I hope that Members will understand, however, that I cannot answer specific points about the regional spatial strategy. Suffice it to say that at this stage the Government have not accepted the recommendations on large sites or affordable housing. As for the number of houses, the Government are seeking feedback through consultation. I think it is clear what the feedback from Members will be.
We published regional planning guidance note 1 for the north-east region in November 2002. Subsequent legislation—the Planning and Compulsory Purchase Act 2004—strengthened the role and importance of regional planning. That was of course a devolution of powers from the centre to the region, although Members and their constituents often see it as a sucking up of powers from the local area to the region.
I understand the Minister’s difficulty, but perhaps he can clarify one point. Can he assure us that if an elected assembly in the region decided that the north-east needed more houses in general—this is, as the Minister says, a devolution of powers—central Government would respond, “That is for you to decide. We will consider the plan in the normal way”?
Broadly, the answer to that question is yes, that is the purpose. However, I would not, of course, want to give a specific commitment on numbers or the outline. I think that the right hon. Gentleman will be reassured by what I have to say on the process.
The September 2004 RSS remains in effect. Its purpose is to set out a broad development strategy for the region for the period up to 2021. I acknowledge that the process that is being gone through is often described as laborious, but the RSS is an important document. It is part of the statutory development plan under the 2004 Act. Local planning authorities prepare the other components of the development plan, the local development frameworks, which must be in general conformity with the RSS. Therefore, this affects not only regional policy, but the LDFs of local authorities. The regional transport strategy is also incorporated.
The North East assembly is constituted as the regional planning body for the purposes of the Act. In June 2005, the assembly submitted a draft revision of the current RSS to the Secretary of State. A public consultation on the draft revision was held from July to October 2005. Various parties made representations, and the strategy was tested at an examination in public in March and April 2006.
The panel’s report broadly endorsed the growth scenarios and spatial strategy in the draft revision. It also made numerous recommendations for changes to the strategy, which have been taken into account in deciding on the proposed changes. The Secretary of State’s proposed changes to the draft revision were published on 29 May for public consultation. The panel raised concerns over three matters in particular, and because they have had implications for the consultation process, I shall outline them and the response that we have made in each case.
First, the panel said that it was not persuaded that the transport proposals set out in the submission draft reflected the proper balance, or that the priorities for investment set out could be justified, and it recommended that the Government review them. In light of that, we have prepared a revised version of that material in the section of the RSS that deals with transport. That new material was based on the outcome of the regional funding allocations exercises.
Secondly, the panel recommended that further consideration should be given to the district housing allocations for Easington, Sedgefield and Blyth valley, with a view to ensuring that they were consistent with the locational strategy and the panel’s conclusions and recommendations on the de-allocation and urban capacity study assessments. In view of the importance of the issue, we asked the panel for further clarification on this view, and it suggests in its addendum report that the assembly should be asked to review its forecasts in the light of that analysis.
How does what the Minister has described is proposed on housing in County Durham fit with what the Government are trying to do nationally, and with County Durham funding from English Partnerships for village regeneration and the possibility of new housing for villages in County Durham? How does all that fit together if we still have an artificial figure, as national Government are paying for something with taxpayers’ money at one level and at the local level things are prevented from happening?
That is precisely one of the questions that will be given consideration—or, more precisely, the answer to it will be given consideration. That is illustrative of both the complex nature of the decisions and the importance of them. Suffice it to say that it would be a retrograde step if there were no regional input. That may be achieved in other ways, and my hon. Friend makes his views known with characteristic clarity, but some consideration at that level is important.
The panel recommended including a proposal that changes be made to policies 19 and 20 of the submission draft. In English, those changes would have the effect of constraining the development of certain major employment sites and deleting policy references to others. We considered that, before making final decisions on the recommendation, it would assist the Secretary of State to have further information on the local circumstances. Consultees have therefore been invited to supply information on matters relevant to aspects that the panel have recommended be changed. I hope that my hon. Friend the Member for Bishop Auckland welcomes that acknowledgement. We anticipate that many stakeholders will wish to comment on the proposed changes, and they have been widely circulated.
As we announced in both Houses on 24 May, we have decided that in the light of the requests for supplementary material we should carry out a two-stage consultation. In the first and current stage, we are consulting on the proposed changes now being put forward. That stage will last for 10 weeks. Following that, Ministers will consider the material that they receive, and will then hold a further consultation, to last eight weeks, to give all concerned an opportunity to consider any further changes that may have been made as a result. Following the consultation, the Secretary of State, having considered the representations, will then approve and publish the final version.
It will be clear from the approach that we have adopted that we are seeking both views and further information before reaching our conclusions. Indeed, there will be a further opportunity for all concerned to consider, and comment on, further proposed changes that may be made as a result of the first consultation. That has of course extended the timetable, and I appreciate the frustration that my hon. Friend the Member for City of Durham (Dr. Blackman-Woods) expressed.
I hope that I have convinced hon. Members first of the importance that we place on the economic success and growth of the north-east; secondly, that we are aware of the concerns of hon. Members which have been raised during the first phase of the consultation and are therefore timely; and, thirdly, that we are committed to our goal of narrowing the gap between the north-east and the rest of the country and that this policy area is a crucial means to that end.
I congratulate my hon. Friend the Member for Bishop Auckland on securing the debate and I look forward to the further deliberations on this matter.
Question put and agreed to.
Adjourned accordingly at seventeen minutes past Six o’clock.