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25 Feb 2009 : Column 120WH—continued
May I just make some general points about where we agree? The Government have to make the case for 75 per cent. of capital receipts from right to buy being remitted directly to the Treasury. They also have to make the case for only one third of the rent rise being remitted back to repairs and maintenance in the current financial year. Figures published by reputable organisations show that the sum for management, maintenance and repair of council housing stock is effectively underfunded by approximately £2.3 billion at present.
The Minister may laud the decent homes standards, but the money is running out, as the hon. Member for Stroud, who is not in his place, said. The Government had an opportunity at the end of last year to put the money that they used for the £12.5 billion VAT cut into, for instance, facilitating the use of 9,000 empty housing association properties at the end of November 2008 or assisting local councils directly in building council houses. In passing, Dover district council, a Conservative council, chooses to build council houses, notwithstanding the Government’s rules.
The other perverse effect, which was mentioned by the hon. Member for Portsmouth, South and my hon. Friends the Members for South-West Surrey (Mr. Hunt) and for Guildford (Anne Milton), is that good councils that seek to improve the quality of tenants’ lives and the housing stock are being discriminated against and efficiency is punished by the present system. A wider point, which has been revealed by the report produced by Professor Hills at the London School of Economics, is that although there was once a variety of tenure and employment, now only 22 per cent. of people of working age in social housing in this country are working. It cannot be right that that kind of segregation has developed and been allowed to flourish under this Government.
I should like to speak specifically to the issues raised by the hon. Member for Portsmouth, South. He rightly mentioned the failure to meet and fully fund housing benefit costs. That should be an integral part of the review. While I am at it, I should like a definite undertaking today from the Minister about when the review will be published. He has alluded to it in the past, in parliamentary answers, saying that it will be later in the spring. We were told on 31 March 2008, when discussing the Housing and Regeneration Bill on Report, that the report on the review was coming along and that it would be published. However, we are almost a year on and it has not happened.
The hon. Member for Portsmouth, South talked about the quality and type of houses that could be built. I feel duty bound to say that the Government’s regional spatial strategies and their flawed density targets mitigate against building houses. So people are forced, given the situation with registered social landlords and the small number of council houses, to build flats, which is not appropriate.
The hon. Gentleman calls for the abolition of the HRA subsidy, as it now is. I do not agree with him on that. In fact, I take the view advanced by the hon. Member for Stroud.
The hon. Member for Sheffield, Attercliffe (Mr. Betts) made an astute point, saying that the lack of long-term planning in the housing revenue account subsidy system makes it difficult for local housing authorities to plan ahead.
Sarah Teather:
All I want is clarification. I am not quite clear what the hon. Gentleman’s policy is. Is he saying that he wants to change the HRA system? He
said that he does not agree with disaggregation. Does he agree with me that the subsidy should be funded through general taxation? I am not clear what the Conservatives’ position is.
Mr. Jackson: I will allow the hon. Lady to articulate the Liberal Democrat policy. My policy is that we support disaggregation and understand why it came about, and we believe that there has to be a persuasive case to get rid of that in its entirety.
Mr. Jackson: The hon. Lady, from a sedentary position, says “no change.” We have yet to see the Government’s proposals and we will comment when they are published.
My hon. Friend the Member for Cities of London and Westminster (Mr. Field) made the astute point that the situation with rents and the 6 per cent. average council property rent rise could be another 10p tax debacle. We know that the rate of council rents was set on historic data in respect of the inflation rate from September 2008.
Mr. Jackson: Flawed data, indeed.
My hon. Friend also made a sensible point about wealth disparities. The hon. Member for Brent, East will also know, because she comes from the same neck of the woods, that that is an important issue that the Government need to look at.
Finally, the hon. Member for Stroud—
Mr. Betts: Is the hon. Gentleman committing a future Conservative Government to funding any subsidy needed by those authorities currently in subsidy, which now will not come from those authorities where tenants were paying a contribution into the centre?
Mr. Jackson: The hon. Gentleman must wait with bated breath for the housing Green Paper that the Conservative party will produce soon. He must contain his excitement, but I have no doubt that he will give that Green Paper a robust analysis when the time comes.
Obviously, there is great unhappiness at local level—that has been reflected in hon. Members’ comments today—about the operation of the housing revenue account. There is consensus that there should be clarity, transparency and, above all, alacrity. The Government have had a huge amount of time to get it right. They originally said that would happen in 2010, and they are now saying that it will be in 2009. It is important that local people make local decisions, because what is appropriate for one group of people in Portsmouth will not be appropriate for another group in Sheffield, Attercliffe, Hartlepool and other areas.
This has been a useful debate. The mood of the House is such that I think the Minister will take away our request that the review be concluded quickly, and I hope that he will answer the specific points that have been made by hon. Members today.
3.50 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): It is a pleasure to serve under your chairmanship, Mr. O’Hara, and I congratulate the hon. Member for Portsmouth, South (Mr. Hancock) on securing the debate. As has been mentioned, we often see him in your place in the Chair, Mr. O’Hara, and it is refreshing to see him change his role and come down into the bear pit to debate among us.
As the hon. Member for Peterborough (Mr. Jackson) said, this has been an important, timely and interesting debate on ensuring that the rents paid by people living in council housing are fair. That is vital to help to secure a fairer society so that people who need assistance with their housing needs can look to their local council to provide it at a cost that is lower than the market rate and affordable to them.
Several hon. Members have mentioned the Government’s role in setting rents for local authority tenants, and I want to clarify that. References have been made to the Government imposing high rent increases on tenants. The hon. Member for Cities of London and Westminster (Mr. Field) said “imposed” and “pushed through”, and the hon. Member for Brent, East (Sarah Teather) said “forced”. I completely and utterly disagree, and that is emphatically not the case. Setting rents for council house tenants is a matter for each local authority. Guideline rents for local authorities form part of each year’s housing revenue account subsidy determination to make assumptions about a local authority’s income and its entitlement to subsidy, but we do not and cannot force a local authority to set a specific increase in rents.
Setting rents, particularly deciding the annual increase in rents paid by tenants, remains absolutely a matter for the local authority. That is not something that the Government can dictate or impose.
Ms Buck: I am interested in the Minister’s words in confirming that. Last year, Westminster city council’s housing panel said specifically that it is a decision for Westminster city council to decide rents, but that position has completely changed in the past 12 months. Will he confirm that there has been no change in Government policy since the council admitted that it was its prerogative to determine rent levels?
Mr. Wright: I can confirm that absolutely. The Government do not dictate or impose on local authorities rent increases for council tenants. That position has been consistent for several years, and remains the case.
Sarah Teather: Surely the Minister agrees that if councils in receipt of subsidy do not set rents at around the Government’s guideline level, they will be left with a giant black hole that they will be unable to fill.
Mr. Wright: No, I disagree with that. Local authorities have considerable autonomy. They set their own rents, and that is a matter for them. We do not impose rent levels. This year, they have set rents at below guideline rents, which indicates that they can decide individually what to do. That is precisely the policy that has existed for some years, and I cannot reiterate it strongly enough. That is categorically the case, not as we have heard in the debate.
Mr. Field: The Minister is exaggerating local authorities’ autonomy because, as the hon. Member for Brent, East (Sarah Teather) said, there would be a black hole in their budgets, not least when there has been so much passporting. I am not trying to make a narrow party political point, because passporting and local government lack of financial discretion came in well before 1997, and I accept that. None the less, the Minister must accept that, given the constraints on local government, the reality is that if councils do not impose rents at the Government’s guideline levels, they will be in dire financial straits, and that applies to many local authorities throughout the country.
Mr. Wright: I disagree with the hon. Gentleman, and I am pleased that he has given me the opportunity to clarify a matter of debate between him and my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck), who pressed him on Westminster city council’s subsidy to other parts of the country.
I shall talk about the determination of general subsidy that local authorities provide to the Treasury and which flows back and forth, but first I want to highlight for the hon. Gentleman an answer that I gave to my hon. Friend two weeks ago. She asked
“how much (a) Westminster City Council and (b) CityWest Homes contributed to the housing revenue account in each of the last 10 years; and how much they are expected to contribute to it in (a) 2008-09 and (b) 2009-10”.
“Westminster city council has been a net recipient of housing revenue account subsidy in each of the last 10 years. The authority does not contribute surpluses for redistribution elsewhere and we expect this to continue to be the case in 2009-10.”—[Official Report, 10 February 2009; Vol. 487, c. 1839W.]
In the remaining time, I want to respond to the important point about how council housing is financed. The hon. Member for Portsmouth, South used words such as “mugged” and “robbed”. I tend to use more balanced language, but he is right that more than £200 million this year has flowed from local authorities’ housing revenue account subsidy to the Treasury, although that must be set in a slightly wider context and I am conscious that an excellent Treasury Minister, the Exchequer Secretary, is sitting beside me.
First—this is important—the Treasury is spending around £5.9 billion on housing this year, which far exceeds the amounts that are going back to the Treasury through the HRA subsidy system. Secondly, and also importantly, in recent years, the Treasury has pumped considerable amounts of money into the HRA system: around £54 million in 2007-08, around £42 million in 2006-07, and almost £208 million in 2005-06. One narrow year cannot be used to provide a definitive statement or a comprehensive view.
I understand that it is necessary to review how council house funding is provided and I shall describe what the Government are doing, but first I give way to the hon. Member for Portsmouth, South.
Mr. Hancock:
It is not just one year; it is successive years. It has happened in the past, and it will happen in the future, unless the system is changed. Is the Minister really saying that there is a justifiable case for council tenants in one part of the country having part of their rent taken as tax and given to the Treasury so that it can
redistribute it? Why? Is he saying that he is convinced that that system should persist? His hon. Friends certainly did not share that view.
Mr. Wright: The hon. Gentleman cannot infer from my comments that I agree with that. I understand the tone of the debate. The Government know that the HRA subsidy system is unfair, complex, difficult and, in response to a point made by my hon. Friend the Member for Stroud (Mr. Drew), has no transparency. The important point about rents paid and services provided locally cannot be established, and we must do something about that. The levels of management and maintenance also need to be addressed.
My Department is carrying out a fundamental review of council house funding in conjunction with the Treasury to promote fairness and accountability, and to provide a sustainable and long-term future for council house funding. That is essential. Local authority housing is an important part of the housing offer for this country. It has served us well for about half a century, and we want it to have a key role in the 21st century. I am confident that the review will provide a long-term sustainable future for council house funding.
Bingo Clubs
4 pm
John Hemming (Birmingham, Yardley) (LD): I am pleased to serve under your chairmanship, Mr. O’Hara. I thank Mr. Speaker for the opportunity to debate bingo taxation. I know that other hon. Members are concerned about the issue, as they have bingo clubs in their constituencies, and I will be happy to take interventions later, but I want to make some progress with my speech first, if they do not mind.
Danny La Rue 52, two fat ladies 88 and legs 11 could be a thing of the past if Her Majesty’s Treasury gets its way. Almost time for tea 83,000 people are members of Mecca bingo club in Acocks Green, which is in Yardley. It is one of one little duck two bingo clubs in Yardley and man alive five bingo clubs in Birmingham. The problem is that the Government uniquely hit bingo with rugby team 15 per cent. VAT and 15 per cent. gross profits tax—a cumulative tax rate of buckle my shoe 32 and a quarter per cent. That compares with only one 15 per cent. tax on other forms of gambling. Bingo is uniquely hit by extra taxation.
The Budd report in 2001—the gambling review report—identified bingo as the softest form of gambling. After all, who has heard of gangsters sending out enforcers to get payment of bingo debts? However, in the past six years, more than 100 clubs have closed and more than 3,500 jobs have been lost, and hundreds of thousands of people no longer have a local bingo club. The taxation seems to me and many others a deeply unfair system and, if it is allowed to continue, it will lead to the threat of further job losses, the closure of more clubs and the loss of an important social amenity for millions of people throughout the country. That would be a tragedy, as bingo clubs are more than just a soft gambling pastime. They are a meeting place for friends in a safe and secure environment and a community hall or club for many elderly people—but not just elderly people; there are many younger people as well.
Politicians on both sides of the House—more than 200 MPs have a bingo club in their constituency—support the scrapping of double taxation. During the past year and a half, MPs have signalled their dismay at the continuation of double taxation by signing a number of early-day motions in support of the bingo industry, two of which I tabled. It is for those reasons and more that I believe that VAT should be removed from bingo, as that will help to secure the future of one of the most popular indoor leisure pastimes. Interestingly, I have received more communications on this issue than on any other in my constituency.
In the past few years, many hon. Members on both sides of the House have tabled written questions asking the Chancellor of the Exchequer to explain his fiscal policy on licensed bingo clubs and the basis for his decision. I could happily list the many replies that the Minister and her predecessor have given, but they are all similar in one respect—as is usual for the Government, they fail to answer the question. For example, I asked the Chancellor about removing VAT from bingo. The Minister replied:
“The Government take all relevant factors into consideration when establishing and maintaining fair gambling tax regimes.”—[Official Report, 12 February 2009; Vol. 487, c. 2140W.]
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