Examination of Witnesses (Questions 200
- 217)
TUESDAY 25 OCTOBER 2005
RT HON
DAVID MILIBAND
MP, MR PHIL
WOOLAS MP, YVETTE
COOPER MP AND
JIM FITZPATRICK
MP
Q200 Mr Olner: Is there a timescale?
Yvette Cooper: We would hope to
be able to say something relatively shortly.
Q201 Mr Olner: What is "relatively
shortly"?
Yvette Cooper: I would anticipate
us being able to say more about this before the end of the year.
There was a specific separate issue around Camden, which is the
local authority where they put forward the proposal, it was voted
against and they do not currently have an alternative. We have
been talking to Camden about whether there are ways for them to
use their existing resources, their own assets in different imaginative
ways in order to address the issues that they face; clearly what
we cannot do is change the entire framework because of the experiences
of one local authority.
Q202 Alison Seabeck: It is a housing
issue, it is helping people into home ownership, and in the core
paper we received one of the key priorities is a step on the housing
ladder. How is the Department going about addressing the fact
that if you look at the Joseph Rowntree paper on the intermediate
housing market there is a large chunk of people who, at the moment,
fall outside of being able to get onto the home-owning ladder?
What are you planning on doing to try and target those people
specifically?
Yvette Cooper: There are two approaches
to that group of people who currently cannot afford to buy their
own home but who want to, or want to be able to buy a share of
their own home. There is an issue about sustainability and there
are some families who, for income reasons or because of instability
in their income, might find it difficult, but we know there are
an awful lot of people who want to, who would be able to sustain
it with the right kind of support or opportunity but currently
cannot. One approach is that simply increasing housing supply
makes housing more affordable so on the one hand actually it is
the whole programme to increase housing supply, but secondly there
is an issue about being able to promote more kinds of shared equity
programmes and opportunities for people to own part of their own
home, even if they are not able to afford the full purchase. We
have set out proposals to help over 100,000 people into different
kinds of shared ownership programmes, key workers but also going
wider than key workers, working with the Council for Mortgage
Lenders as well on this. I think this is an area which we will
see grow in the future. I think we are still really at a relatively
early stage in the development of the whole shared ownership programme
but it is something that we will see grow in the future, it is
certainly something that we are very interested in.
Q203 Alison Seabeck: Is the Community
Land Trust model something that the Department is perhaps looking
at?
Yvette Cooper: We have had some
discussions about this and it is something that we are very interested
in looking at further.
Q204 Anne Main: Briefly on the question
of making homes more affordable, it depends which area you are
talking about and it is a significant challenge in the south and
east. Again, I know you cannot speak on behalf of the Chancellor,
but I know that a lot of residents in St Albans, for example,
are hoping that there would be something addressing Stamp Duty.
A £4,000 payment can stop people buying their own homes,
and also they are considerably worried about, for example, the
Home Sellers Pack which is going to affect everybody as well.
If you are looking at trying to make it more affordable, surely
you should be addressing some of these other points.
Yvette Cooper: The Chancellor
has announced changes in Stamp Duty and I think that was the right
approach. The Home Information Pack is actually going to be strongly
to the benefit of consumers—it has been supported strongly
by Which? and by consumer groups—because we know that a
lot of people have suffered very considerable costs from having
the whole process of trying to buy a house fall apart at a late
stage, after you have paid the legal fees, after you have done
the searches, after you have done a whole lot of work on the process
and suddenly the whole thing falls apart and you have to start
again, you get gazumped or whatever. We know that there are huge
transaction costs in this market that could be reduced if we had
the right information at the right stage, upfront. From the point
of view of first-time buyers, they will not have to produce a
seller's pack, so they are the people who will actually get even
more benefits from the system due to the fact that the information
will be provided as part of the seller's pack. The Home Information
Pack is a big opportunity in terms of improving the way in which
the housing market works.
Q205 Anne Main: Do you have any concerns
on the other side about people being able to buy into homes with
their pension investments and drive up prices?
Yvette Cooper: Do you mean by
this the SIPPs?
Q206 Chairman: Yes, SIPPs.
Yvette Cooper: We have looked
at this and it is worth setting out exactly the way in which the
SIPPs will work, because there have been quite a few misunderstandings
about this and I know there has been some concern about whether
or not they will be used for second homes and things like that.
Firstly, the number of people for whom SIPPs are an appropriate
type of pension fund is relatively small. The second factor is
that actually if you buy property as part of your pension fund
it is owned by the pension fund, not by you. That means that if
you then use it—and we are talking about putting your own
home into your pension fund—you will have to pay rent to
the pension fund, or be taxed on it as a benefit in kind. There
are actually a lot of safeguards in the system, therefore, in
terms of the way the SIPPs process works and in terms of any impact
that it will have on the housing market.
Chairman: Partly because I am conscious
of the time and I want to get a couple of other topics in, could
we ask the Department to do us a note on SIPPs and also on REITs,
because the issue is that SIPPs are encouraging people to invest
in domestic property, thereby potentially competing with people
are trying to get onto the housing ladder, whereas REITs, if I
understand it properly, give them a route to invest in commercial
property. It would be helpful to the Committee to have a note
on what the ODPM input has been into the Treasury decisions on
SIPPs and REITs and what the implications of those two schemes
are for the housing market. Can we move on to a completely different
area of local democracy. Dr Pugh.
Q207 Dr Pugh: Changing gear a little
bit now, if you remember there was a document from the Commission
called We Can't Go on Meeting Like This which then led
to a reform of local government structures which, having been
piloted, were then proposed universally. In a previous incarnation,
this Committee interviewed Mr Raynsford who, when he was confronted
with various complaints reaching us from councillor sources about
feelings of disenfranchisement, lack of involvement and inability
to gain appropriate experience and so on, said that it was really
too early to judge, that a proper evaluation would take place
at some point in time and we would look to see whether or not
some of the objectives behind the new cabinet system were actually
being achieved, and he included things like diversity of involvement
of different categories of people and so on. Has the Government
any plans to do such an evaluation, such an assessment, or to
relax the requirement that most major authorities have to have
a cabinet or similar system?
Mr Woolas: Thank you very much
for the question. The answer to your question is that there are
no plans to change legislation, there is no legislative framework
change that is proposed. We did publish a document Vibrant
Local Leadership in the spring of this year and we have had
responses to that, but no decisions have been made about that
as yet and obviously local government, as members of the Committee
will know, are having a debate about that amongst themselves.
There are other developments that I would put in to back up the
report and the first is the development of the theme of neighbourhood,
neighbourhood empowerment and neighbourhood representation. Within
that, of course, the role of the individual ward councillor is
an important one, and within the overall structure is the examination
of the scrutiny role where important new powers of course have
been given on the other side of the coin, as I know that you know,
and I can report that there was another mayor elected in Torbay
on 20 October.
Q208 Dr Pugh: I will be very happy
to talk about that, in fact I was going to bring that up myself,
but what you have done is you have mapped out what functions councillors
are currently performing, you have not actually said there is
wholesale satisfaction with these roles as they are defined, nor
have you said noticeably what attempts have been made to assess
whether the objectives—which were quite clear when the cabinet
system was introduced—are actually being achieved in terms
of creating quality leadership, in terms of encouraging wider
participation and more people wishing to be local representatives
in one form or another. The information is out there, are you
saying that basically you are not collecting it or you are not
intending to collect it, or you are about to collect it some time?
Mr Woolas: Thank you. I obviously
need to clarify what I said before. We are in the process of collating
and assessing the responses to the Vibrant Local Leadership
document. I hope I do not come across as avoiding the question,
but it is too early to draw conclusions from that, apart from
in this regard, and that is that there are great differences in
the response in different parts from different types of local
authorities. We have also developed, as you know, the local area
agreements at a faster pace than was intended originally, so that
by April 2007 every area within England will have a local area
agreement in place. That changes the relationship between the
council and the other public service authorities and indeed other
partners, and that changes the leadership requirements of the
local authority at both the executive and at scrutiny level, which
is a very important part of the debate for the future. I hope
that does answer your question.
Q209 Dr Pugh: The impression you
are giving is that in a sense the system is still evolving and
therefore cannot finally be judged, and we are in a similar position
as we were, I think, when we last asked this set of questions.
If we can move back to Torbay, you have a situation there where
24% turnout or something like that got the town a mayor and an
even smaller percentage actually requested a mayor. I suppose
you could argue, could you not, that 76% of people did not actually
want a mayor but nonetheless are landed with it. Given the relative
lack of enthusiasm for mayors across the country—and it
is certainly reflected in the comments in Torbay and in discussions
I have had with people in Torbay, the ordinary electors of Torbay—
Mr Miliband: Were you canvassing
for the yes or the no side?
Q210 Dr Pugh: I actually contacted
a good number of people to find out whether they were or were
not going out to vote that day and I have to say that by and large
a good number informed me they did not want a mayor.
Mr Miliband: Were you trying to
persuade them to vote or not vote?
Q211 Dr Pugh: My persuasive abilities
are not mentioned—
Mr Miliband: We have a new Lib
Dem targeting strategy; I am intrigued by the deployment of resources
in Torbay.
Chairman: I think you should move on,
please.
Q212 Dr Pugh: Indeed so. There is
less than maximum enthusiasm for mayors right across the country,
is that not the case?
Mr Miliband: You can look at this
in two ways. You can either say that Government should impose
a single solution and get it done everywhere, or you can say that
you can try and take people with you. The truth is that when you
confront people with votes that really affect their daily lives—for
example, the housing transfer ballots that take place—60
to 70% of people turn out. When you have a referendum, as in this
case, about the structural issue, it is tougher, and the course
that we have chosen, trying to work by consent, is necessarily
a gradual one. However, one mayoral model has certainly captured
local minds and that is the one in London. I do not know whether
you are going via Torbay to Greater London, but the review of
the Greater London Authority, the review of the mayor and GLA
powers, is an interesting chance to take stock of the mayoral
system in one part of the country, admittedly the capital, and
that is something that we are doing in a very public and open
way at the moment, about whether there is scope for further devolution
of responsibilities to the mayor and the other players locally,
the GLA and the boroughs. That is an opportunity to ask the question—given
that there is this greater accountability through the mayoral
system with a four year mandate—should voter power be devolved?
Q213 Chairman: Would you not accept
though that the issues around mayors such as the Mayor of London
or the mayors of other very large cities—Birmingham, for
example, if there were such a proposal—are rather different
from the issue of mayors in places such as Torbay? That is not
in any way to denigrate Torbay, but it is not the same sort of
community as London, and London of course has a very significant
tier of local government underneath the mayor.
Mr Miliband: London is not the
same as anywhere, but if you go to Middlesbrough or Doncaster,
they would say they are pretty significant places. It is a new
idea, it is being developed and, yes, London is different, but
so what?
Q214 Chairman: So one should not
extrapolate pluses and minuses of the London mayoral system into
other areas.
Mr Miliband: I can see that you
might not want to put London and Torbay in the same bracket, although
some people might, but it seems to me that if you are asking are
the larger cities in a different category from others, there are
pros and cons to do with scale. I do not think it is an issue
where scale means you should go for a mayor and absence of scale
means you do not. You can be more open than that.
Chairman: I am conscious of the fact
that we have got one minute left. Unless there is a burning question
on that I would like to give Mr Olner a chance to ask a question
on something completely different, as I know he would want to.
Mr Olner: Yes, Chairman, it is something
that affects all of us as Members of Parliament. The Chancellor,
on March 16 2005, announced that all pensioners and disabled people
would be entitled to free local bus travel from 2006. I just wondered
how much work the Department has been doing to make sure that
those schemes that are going to be put in place actually do provide
what we want them to, to help our pensioners and disabled people.
Mike O'Brien is the next door neighbour to me and I have one side
of the street and he has the other side of the street and there
are different local authorities. All I am saying is I do not want
this scheme, which I think is an excellent scheme for the disabled
and pensioners up and down the country, to fail on a technicality
because they cannot interchange to another authority.
Q215 John Cummings: If I could just
follow up on that, I represent an area where all the hospitals
are outside the constituency, all the major shopping areas—you
will know it, Minister—lie outside of the area, so cross-border
travel is absolutely imperative if this scheme is going to work.
Mr Miliband: I think we have used
up the minute so we do not have to answer, is that right?
Q216 Chairman: No, taking lessons
from the European Union, the clock has stopped.
Mr Woolas: You and me both is
the answer. The serious point is that the Chancellor has provided
£350 million to provide for free pensioner travel outside
the peak morning hour at 9.30. The intention is to distribute
that money through the formula in the revenue support grant as
part of the EPCS block. The discussion that we are having with
local government and individual local transport authorities is
to ensure that the money which we believe to be adequate to compensate
the bus companies for pensioner travel is distributed in a way
that it is fair and that involves no changes to services or changes
in their budgets. That is quite a challenge, but the alternative
of course is not to distribute it through the grant. The question
that has been asked in addition to that is how to ensure inter-operability
between regional transport authorities, and that of course is
a matter that is being discussed at the moment. It is a goal that
we have, and I say that because you will be aware that this is
not a national scheme, bus operators have a relationship with
the individual transport authorities. There are of course many
schemes in existence throughout the country, not least between
districts and counties, but the goal behind the question is of
course shared by ourselves.
Q217 Mr Olner: You would have a team
that would be able to troubleshoot so that for pensioners who
are disenfranchised by two authorities not working together, you
would knock their heads together and make it work. If you do not,
people are going to be seriously disadvantaged.
Mr Woolas: What we must not also
do is allow bus operators to charge for more than their costs
to the transport authority. You have to differentiate between
average costs and marginal costs of the extra passenger that is
carried as a result of the concessionary scheme, so we have a
responsibility to the central taxpayer as well.
Chairman: Thank you very much, we are
going to have to call it a day there but I am sure we will have
many other opportunities. Can I thank you all very much for answering
a wide range of topics which I am sure we will continue to explore
with you over the coming period. Thank you very much.
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