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8 Oct 2008 : Column 126WH—continued
3.48 pm
The Exchequer Secretary to the Treasury (Angela Eagle): The debate has been wide ranging. What came through the most is the expertise of hon. Members, initially in the very able speech of my hon. Friend the Member for Manchester, Blackley (Graham Stringer), who was successful in his bid for a debate on this important issue. We have heard a microcosm of the consultation process that I have been involved in at the ministerial level with various stakeholders who have been in to see me. Those stakeholders included many hon. Members, as some were kind enough to mention, who have attended this debate but also many other people with particular interests in the issue.
It is important to note that we have tried to have as open a consultation process as possible on the design, not on the rates; although we do not consult on tax rates, we do our best to consult on the design. Not all those who have been to see me accept that this should be so, and some want to consult on the rates. Obviously, some of the details about effects on particular sectors in the aviation industry are dependent on rate setting. However, we cannot have discussions ahead of announcements about such matters, as I am sure everybody understands.
The Government recognise the important contribution that aviation plays in both regional and national economies. We have heard in detail about that from many hon. Members and many of my hon. Friends. For example, aviation directly supports some 200,000 jobs and indirectly supports up to three times as many jobs. All the evidence suggests that the growth in the popularity and importance of air travel is set to continue over the next 30 years. The Government are committed to supporting the sustainable growth of the aviation industry.
My hon. Friend the Member for Manchester, Blackley, in a comprehensive speech, mentioned a range of worries that reflect those of his own regional airport, which I
saw in April. Representatives from that airport have continued talking to hon. Members and hon. Friends about their worries, particularly with respect to disproportionate regional effects, including the potential effect on the freight industry and whether there will be environmental savings. I have said to all those who have been to see me, “Please give us the data that you are worried about. Please give us the elasticities of some of your routes, including the ones that you think are vulnerable, so that we can try to work out, behind the scenes, before we set rates, the correct balance between enabling this tax to be effective and making certain that it does not have perverse effects”. As the hon. Member for Putney (Justine Greening) said, we should see that it does not chase freight offshore—it is in nobody’s interests to see that happen—so the elasticities of demand and use, and the economics of particular routes are important. I have said to all those who have contributed the 170 responses to the consultation, people who have been to see me personally, and people who have seen officials personally, “Give us as much information as possible, so that we can try to model these effects to make a sensible, reasonable decision about levels.”
Mr. Donohoe: I just want to clarify whether there has been any dialogue between the Treasury and the Department for Transport.
Angela Eagle: I can assure my hon. Friend that there is constant dialogue between the Treasury and the Department about a range of issues. Officials from the two Departments have been in touch with one another to see how best we can model and design this tax: that is what the consultation has been about, in some detail.
I accept that there are arguments for saying that introducing a new tax with a different basis changes behaviour. It is question of how we can best anticipate and model that so that we can achieve our environmental and revenue-raising objectives without causing damage. Hon. Members have talked about the aviation industry and the positive effect it has, both technologically and economically, in our society. I am still trying to get out of my head thoughts of the hon. Member for Aldershot (Mr. Howarth) in his aeroplane, hopefully ahead of the major bomber that will be taking part in the flypast. The hon. Gentleman captures the enthusiasm of a lot of people who are interested in industries that were created a century ago and upon which the prosperity of our country has been based for many years. The Government have no wish to do anything but continue to encourage them to prosper and grow.
My hon. Friends the Members for Eccles (Ian Stewart), for South Derbyshire (Mr. Todd), for Derby, North (Mr. Laxton), for North-West Leicestershire (David Taylor), and for Aberdeen, South (Miss Begg) made important and pertinent points. I can assure all of them that each detail is being kept in view in the work that is going on to design the tax. We are aware of all the issues to do with chasing freight offshore, the issues affecting particular regional airports and, obviously, of the economic benefits that come with having an expanding regional airport doing business. Clearly, Aberdeen has its own international context, which my hon. Friend the Member for Aberdeen, South talked about a great deal. Taking all these things into account is an important part of our design for the tax.
Opposition Members and hon. Friends talked about the way in which the tax was being modelled, particularly
about whether using the maximum take-off weight was the right basis for the tax. This is probably the best proxy that we can get, in the current circumstances, upon which to base the tax, because we are trying to find an objective, uniform measure or combination of measures that will define an aircraft’s flight, and maximum take-off weight is a reasonable one. Many hon. Members have said, understandably, that emissions would be a better basis on which to levy the tax, but the difficulty is the Chicago convention. Charging for emissions on routes has already been deemed illegal in the European courts, so it is dubious in the extreme whether we could charge a tax purely on emissions for those purposes, given our international agreements. We therefore have to find a proxy. We consulted on maximum take-off weight, and heard about some of the problems that have been raised in today’s debate. We are happy to listen to other observations about whether we could use nitrate emissions and various other things, but the key to levying a tax is that it has to be simple enough for people to understand in advance what their liability is likely to be, robust enough not to vary between different flights by the same aircraft, and stable enough. Again, if hon. Members in the Chamber have other views, or have been in touch with stakeholders who have other views, I should be happy to hear them. However, we are still of the opinion that maximum take-off weight is probably about the best proxy for emissions that we have at the moment.
Justine Greening: Will the Minister give way?
Angela Eagle: Yes, but I only have two minutes and I wish to deal with another issue raised by my hon. Friend the Member for Manchester, Blackley.
Justine Greening: Will the Minister confirm that it is not lack of data that has prevented the Government from taking a different opinion? Is she saying that it is a legal issue rather than a lack of data?
Angela Eagle: It is not only a legal issue. If the hon. Lady looks at paragraphs 2.14 and 2.17 of the consultation paper, she will see that we say that nitrous oxide emissions
“have been shown to provide a reasonably good correlation to emissions en route”.
However, we are not assured there is enough robust, comprehensive data to base a tax on those emissions. There are therefore some technical issues that would put uncertainty into the tax base, which is not desirable. A combination of reasons have led us to use maximum take-off weight as the best proxy that we have for pollution and CO2 emissions in this instance.
My hon. Friend the Member for Manchester, Blackley asked whether we were confident that the proposed tax was legal. We have taken legal advice. We would not propose a tax that we thought was illegal, since that is not a sensible way for Governments to behave. I suppose one can always find a lawyer to take a contrary view, but the way things stand, our legal advice is that we have a robust legal case for taking this tax forward and we will proceed with that advice. My hon. Friend asked whether I would publish our legal advice. That is a nice try, but he knows that Governments do not publish their—
Mr. Martin Caton (in the Chair): Order. We now move to the next debate.
Population Estimates (Westminster Council)
4 pm
Mr. Mark Field (Cities of London and Westminster) (Con): The City of Westminster is one of the most complex and diverse districts in the United Kingdom. As the cultural and political hub of our capital city, it attracts a vast number of people each and every day, on top of the residential population, who either come to work in Westminster or to visit its wealth of attractions.
Unsurprisingly, it is also a destination of choice for people arriving in the United Kingdom for the first time. Many plan to work for a short period before returning home, and others hope to make new, permanent lives here, but the true extent of that population is unknown. Hidden from official statistics are the asylum seekers awaiting a decision from the Home Office, countless migrant workers from the European Union who are often willing to sleep in crowded rooms, illegal immigrants working in the black economy, and of course those whose application for leave to remain has been rejected but who are yet to be removed.
At 24 per cent., Westminster has had the greatest proportionate increase in population since 2001—the time of the last census—of any local authority in the United Kingdom. That tide of humanity must be catered for, but in this unique area of hyperdiversity and hypermobility it is uniquely difficult to assess its extent. That is a problem because population figures form a key part of the Government’s calculations to distribute grants to local councils, as the Minister knows.
Westminster city council has repeatedly warned the Government that current methods of counting migration are simply not keeping pace with modern patterns of population movement. Consequently, the council and many other areas where migration is high are locked into a three-year grant settlement, which leaves Westminster paying £6 million every year for those unaccounted-for people living within its boundaries.
No doubt migration will always be a sensitive issue, but the failure of the Office for National Statistics properly to measure its extent will mean London council tax payers shouldering the burden without the benefit. Unless the Government address the problem urgently, they risk losing public good will with serious consequences for the cohesion of our communities.
I should point out at this stage that this is not a narrow, partisan, party political issue. I share representation of the City of Westminster with the hon. Member for Regent's Park and Kensington, North (Ms Buck) who sits on the Labour Benches, and we work hard together on this and a number of other local issues. It has often been at the hon. Lady’s behest that we have had meetings with Ministers in years gone by.
Many of the problems with population figures are attributable to the lack of a single, all-inclusive system to measure the movement of people into and out of the UK, and the absence of such a system to allocate those migrants to the place where they reside. Westminster city council’s grave concern is that the population figures used by the ONS in the calculation of Westminster’s grant allocation are incorrect and significantly underestimate the area’s population. Consequently, the
council encounters difficulties in providing the full complement of services for its residents, both permanent and temporary.
No one disputes that Westminster is a particularly attractive place for migrants to work, especially as they can avoid London’s travel costs and often find employment easily in the capital’s service sector. Research commissioned by Westminster city council found that many choose to live in crowded accommodation, and are often classed as mid-term migrants, staying for between three and 12 months. Yet the methodology adopted by the ONS does not include in its population figures migrants who say that they intend to stay for fewer than 12 months. That omission is significant in an area such as central London, but I appreciate that it applies not only to Westminster but to one or two other local authorities. Independent research has shown that Westminster has more than 13,000 illegal migrants within its boundaries at any one time and, in addition, around 11,000 short-term migrants who are not registered in the official statistics for the reasons that I have set out.
The Government are not unaware of the problem. Westminster city council has campaigned on the issue ever since the ONS was found to have missed more than 22,000 people from the 2001 census count of the borough’s population. Westminster’s specific case was investigated by the Statistics Commission before the UK Statistics Authority replaced it. Recommendations were made for migrant data to be improved urgently after the quality was found to be “presently wholly inadequate”.
I am afraid that no action was taken, and in May 2006 the commission had to write again to the Home Office. It concluded:
“Work by the Statistics Commission three years ago indicated that there was very wide agreement across Whitehall that statistics relating to migration, both internationally and within the UK, need urgently to be improved. But thus far we have seen little evidence of real progress being made”.
More worryingly, the Commission gave its original warning before the European Union’s enlargement in 2004, which took in the A8 accession countries of the Czech Republic, Hungary, Estonia, Latvia, Lithuania, Poland, Slovakia and Slovenia. The Government's colossal underestimation of the number of people arriving from those countries has been well documented, and the issue did not affect only Westminster.
Local authorities have borne the brunt of service provision for the countless hundreds of thousands who came to our shores without adequate support as a result of the Government's failure to prepare. Another two countries have since been added to the EU—the A2 nations of Bulgaria and Romania acceded on 1 January 2007—and the House of Lords Select Committee on Economic Affairs acknowledged last year that
“there is currently no satisfactory source which can provide the raw information, at national and local levels, that is required for statistical purposes”.
The ONS has recognised the difficulty of measuring Westminster's population and has expressly excluded it as a field test authority for the forthcoming 2011 census on the grounds that
“our methods might be sufficiently good enough for more typical cities.”
The understandable fear, which the hon. Member for Regent's Park and Kensington and I share, is that the council could again face problems at the next census
and beyond, given the importance of the census figures for the calculation of grant in the decade to come.
The volatility and confusion in population estimates make it almost impossible for local authorities to plan ahead with certainty. While the Government reap the rewards of migration through increased income tax and value added tax, and the higher productivity of British business, local authorities are trapped with the costs of an increased population without being given a fair share of funding. The impact on services and quality of life in areas of high migration is significant in terms of housing, community protection, schooling and adult services. In 2006-07 alone, the council incurred costs of more than £1 million just for supporting people who do not even have any recourse to public funds. That represented only a fairly small proportion of the migratory flow.
Many A8 migrants choose to live in private sector housing, and that has increased rents, applying further pressure to an already oversubscribed social housing market. Westminster's 2006 housing needs survey identified that increased overcrowding and household size was linked in part to a growth in houses in multiple occupation. That adds further to the acute pressures on affordable housing in an area where 44 per cent. of children already live in overcrowded accommodation. As the local Member of Parliament, I can testify to that.
The two most common issues in my constituency postbag are immigration and housing, and I reckon that I receive between 10 and 20 letters a week from families either struggling to obtain council or housing association property or hoping desperately for a transfer to a larger home. Westminster city council understands their frustration, but in a high-density, urban area the supply of affordable homes simply cannot keep up with the colossal demand. The average wait for a permanent home for someone accepted on to the list todayis likely to be between four and five years. For a family in a one-bedroom property needing a two-bedroom home, the transfer wait is currently six years, and for a three-bedroom home it is seven years and eight months. For those wanting to trade up to a four-bedroom home the wait is apparently, if academically, 27 years and seven months.
Furthermore, since 2004 London has seen increases in A8 migrants sleeping rough. Westminster city council has worked hard to tackle the needs of new arrivals and has worked with central Government agencies. I do not wish to offer too much criticism, because there have been significant improvements. The situation has ebbed and flowed at various times, and we have been trying to prevent nearly 400 A8 nationals from falling into long-term rough sleeping. I highlighted that work in a speech I made in this Chamber in January last year, when I warned the Government about the increasing pressure on homelessness services following the A2 enlargement of the EU; indeed, where I felt it was appropriate, I also complimented Government action.
Once A2 or A8 nationals have completed 12 months’ continuous employment as registered or authorised workers, if they remain in the labour market they have the same access to Jobcentre Plus services as any other citizen. The flip side of that is, of course, that Jobcentre Plus refuses to help A8 nationals to find work if they have not already been employed for that period. Those men and women rely on their local authority for support and
advice and can all too often fall into homelessness, addiction and the other problems that arise in those circumstances.
The Westminster drugs and alcohol team is under increasing pressure to assist clients from EU accession nations who have fallen into alcohol dependency and drug addiction. Unfortunately, the influx from A10 countries has also had an impact on the council’s community protection operations. Strong evidence suggests that pockets of petty theft in the west end and persistent organised begging operations are being initiated by Romanian migrants. In fact, after several constituents complained to me specifically about aggressive begging in shopping districts, I had to raise the issue independently with City of Westminster police. The borough commander Steve Allen informed me that the police have had to put specific operations in place to combat a problem of which they are well aware.
Unfortunately, begging seems to be just one arm of organised crime that originates from eastern Europe. Automated teller machine fraud is another example of such crime, which, anecdotally, the local police have told me is conducted almost exclusively by Romanian gangs. I have tabled various parliamentary questions on that matter and was informed by the Home Office that it had no idea how much crime was being committed by Romanian nationals because country of origin data are not collected or collated in the crime statistics.
On education provision, short-term migration and the large number of migrants who move around the country seeking work cause significant problems in relation to the churn in schools. Such churn can leave teachers coping with a diverse class that has vastly different abilities in numeracy and literacy, and diverse cultural and language needs. Many children arrive mid-term and have no records, which has a significant administrative cost—about £400 for a primary school child and £800 for a secondary school child. In addition, extra support staff might be required to help migrant children with their learning and to liaise with related services. The council estimates that migrant families will contribute to a 10 per cent. increase in required school places in Westminster in the second half of this decade.
Child protection can be particularly difficult because of language and cross-cultural issues when investigating migrant families. In addition, mobility tends to be high, which makes investigations into problem families both costly and time consuming. With higher than average British birth rates, migrant families will often also have a greater reliance on primary health care facilities. A general confusion over who is entitled to assistance adds to service pressures, and there is increasing concern among local authorities about their legal obligations towards destitute people from abroad who have no recourse to public funds, such as failed asylum seekers or A10 nationals who have not worked for the requisite 12 continuous months. British citizens who have lived abroad for many years may also lose their right to benefits.
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