“The Government has a choice, if it wants more mutuals and co-operatives to develop: it must take action to provide support.”
Although a recent Co-ops UK report shows that the co-operative movement in this country is still growing, we would all say that the Government could do more to encourage that development. The Government talk a good game on mutuals, but in reality, many of their proposals for public services are joint venture spin-offs with private partners. Those may have merit, but they should not use the language and clothes of the co-operative movement unless that is truly what they are. The example often given is the behavioural unit in the Cabinet Office known as the nudge unit. It is often cited as a flagship Government mutual, but most of us, as well as most people in Co-ops UK and the Co-operative party, would barely consider it a mutual at all.
As we are in the middle of co-operatives fortnight, this debate is an excellent opportunity to promote the benefits of co-ops. I believe that they have a part to play in the economy of every society, from credit unions that lend to families to the running of core services and bigger ideas such as co-operative housing, which has been mentioned. The positive economic and social impact of co-ops should be celebrated, particularly after the financial crisis, when people are seeking to ensure that we never again get ourselves into the situation that we got into in 2008. I believe that all Members should do whatever they can to advance and promote the cause of co-operatives.
3.8 pm
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): It is a pleasure to serve under your chairmanship again, Mr Hollobone. I declare my interest as a Labour and Co-operative Member of Parliament. As I will speak about football co-operatives and mutuals, I should put on record that I am the founding chair of the Fulham Supporters Trust.
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I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing this debate during co-operatives fortnight, as my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) said, and on giving a good and comprehensive summary of a range of current co-operative and mutual issues. I will not repeat the points that my hon. Friend the Member for Islwyn made, but I will touch on a couple of the issues that he raised.
First, my hon. Friend rightly highlighted what the Secretary of State for Energy and Climate Change said about the need for a co-operative energy revolution. It was a cause of some frustration during consideration of the Energy Bill that we were unable to convince him to turn his words into action on a community energy strategy and regarding the threshold for the feed-in tariff for community energy projects. My hon. Friend talked about the extent to which people have an interest in energy, and feel a sense of ownership towards it, as a result of community energy projects. There are a number of such projects across the country, but most are relatively small, and if we are to develop them further, we need to change the threshold.
When the Secretary of State was asked about that during the Bill’s pre-legislative scrutiny, he said, “There aren’t any community energy projects above 5 MW.” Well, that is because that is the threshold, so his argument is self-defeating. Earlier in the debate, I was looking at the amendments that the Government have tabled to the Energy Bill in the House of Lords—obviously, I was listening intently to what everybody was saying, but I was multitasking—and I am pleased to say that there is one that will increase the threshold for community energy projects from 5 MW to 10 MW. Those of us who sought to persuade them can reflect on the fact that our argument was well made and will have an impact, unless the Government decide to vote against their own amendment. The change will be a significant step towards helping to meet the challenge that was rightly identified earlier in the debate.
I also want to touch briefly on housing and housing co-operatives. I am pleased and proud to have the West Whitlawburn housing co-operative in my constituency. Obviously the Minister is familiar with Rochdale, but I would not necessarily expect him to be familiar with parts of Cambuslang, in my constituency. On all the neighbourhood statistics available, Whitlawburn is among the most economically deprived neighbourhoods in Scotland. Figures on health conditions, educational attainment, employment and income are collected slightly differently in England—and, I presume, in Wales—but Whitlawburn would probably also come pretty high up any list measuring those things across the UK.
Several years ago, the West Whitlawburn bit of the housing estate in Whitlawburn became a co-operative, and there is a striking contrast between the standard of the housing in that co-operative, given the capital and energy-efficiency improvements that have been made, and the standard of the other housing, which is literally across the road. That is partly because of the real impetus that has come from those who came together to form the co-operative, which is about not only the mechanisms involved in driving investment but, just as importantly, the attitude and ethos that have become apparent. Just last week, along with a colleague from
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the Scottish Parliament, the local MSP James Kelly, I was pleased to be able to talk to the members of the very engaged management committee, who are all tenants and members of the co-operative. They take their work very seriously, and their attitude is all about what they can do to improve housing in their co-operative and to maintain that improvement, as opposed to expecting somebody else to do things for them. That makes an important point about the ethos of co-operatives.
The area is relatively small, however, and the co-operative is not immune from the impact of Government policies. The bedroom tax or the spare room subsidy—whatever label the Minister uses—is having a considerable impact in West Whitlawburn, where 67% of tenants are on housing benefit. The housing association has found—it has been able to do so because it is relatively small— that 30% of its tenants, or 200 people, are affected by that measure. Its housing stock consists mostly of accommodation with two or three bedrooms, and there is a problem of people needing to move from three bedrooms to two, or from two bedrooms to one. People of pensionable age are not impacted, however, so we have the bizarre situation of the housing association almost considering seeing whether people who are in receipt of state pension and live in one or two-bedroom accommodation will swap with working-age tenants living three or two-bedroom accommodation. The policy will have a significant impact on the housing co-operative as a result of rent arrears. The co-operative does not want to evict its members—nobody wants that—but the financial effects of the policy could have a significant impact on what it is trying to do.
The third issue I want to touch on is football supporters’ trusts, which are an important form of mutual activity. People will be aware that the trusts were born out of the co-operative movement with the support of Supporters Direct. There are now several supporters’ trusts throughout the country, and there are good examples of trusts that are completely or partly in control of running clubs in Wimbledon, Portsmouth, Swansea and Manchester. In other cases, football supporters’ trusts are trying to take a role in running clubs, including Heart of Midlothian in Scotland. In every case, supporters’ trusts have tried to take a role in the ownership and running of clubs when those clubs have been in crisis and everyone else has walked away.
However, I want to draw the Minister’s attention to the example of the trust in Swansea, given its economic impact. Swansea was basically a bankrupt club, and it was sold on for £1. The supporters’ trust was formed and took a role in the club’s ownership, and it has been an integral part of the club since then. Over a couple of seasons, the club has gone from 90th out of 92 in the league to being an established premiership club. It has won the league cup, and it will be playing in Europe next season. All that involved a role for supporter ownership and supporter control, which is a form of co-op.
There have been many debates about football governance—I have spoken in most of them—so I do not want to repeat any points about that, but I do want to talk about clubs’ economic impact. Football clubs have a significant local economic impact—directly and indirectly. When Hull was first promoted to the premiership, people there would have talked about the impact on the city of visiting supporters and the attention that comes with having a top-level club. The same happened when
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Blackpool was in the premiership, and the same has happened with Swansea. However, when clubs are driven and run by people who are involved in the local community, they are more inclined to ensure that some of their spending power and economic activity benefits that community. Trusts reinforce local economic activity, so they should be encouraged, treasured and nurtured.
Although this is not part of the Economic Secretary’s brief, he will know that the coalition agreement included a commitment to encourage and foster fan involvement in, and ownership of, football clubs. The Minister for Sport, the right hon. Member for Faversham and Mid Kent (Hugh Robertson), has mentioned that commitment a number of times, and he has tried to persuade football authorities to act on it, although I think we are getting towards the end of that road, given the intransigence of the authorities. If the coalition wants that commitment to come to fruition, it might have to take action by forcing the football authorities to do what they seem not to want to do. The coalition should encourage fan involvement for the good reason that it will not only sustain football clubs, but encourage the economic activity that happens when trusts are involved in the management structure, as we can see from the examples I cited. I hope that the Economic Secretary will reflect on that, even though it is not his direct responsibility.
Mr Philip Hollobone (in the Chair): Our next speaker might be dangerously overqualified because he comes from Desborough, one of the famous co-operative towns in Northamptonshire, which now lies in the Kettering constituency.
3.19 pm
Andy Sawford (Corby) (Lab/Co-op): It is a pleasure to serve under your chairmanship, Mr Hollobone, as you are my near neighbour. I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing this important debate and on opening it in such great style. He covered a broad range of issues relating to how the co-operative movement benefits our economy.
Hon. Members have made many claims regarding the strong co-operative traditions of their constituencies, and I do not dispute the fact that Rochdale is the home of the co-operative movement. I can say, however, that my constituency, with its previous boundaries—you, Mr Hollobone, will understand this, because the Kettering and Corby constituencies were combined at that time—elected the first ever Co-operative MP. Alf Waterson was elected in 1918. Samuel Perry, the father of the tennis legend Fred Perry, was subsequently elected to be the Co-operative MP several times. Samuel Perry was a key mover in joining the forces of the Labour and co-operative movements around the UK.
The driving forces behind the radicalism of people in my constituency, in electing the first Co-operative MP, were the chapels, the boot and shoe workers and, in particular, the blast furnace men’s union at Corby, which adopted Alf Waterson as its candidate. The political movement was connected to an economic movement at the time, as ordinary working people in Northamptonshire came together through co-operatives to try to make a better life for themselves. Their values still hold true today in the co-operative movement—values of self-help, self-responsibility, democracy, equality, equity and solidarity.
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In the tradition of the founders of the co-operative movement, co-operative members today—and I am one, and should declare an interest on that account, and as a Labour and Co-operative MP—believe in the ethical values of honesty, openness, social responsibility and caring for others. The co-operative principles are guidelines by which all co-operatives today put their values into practice. Those seven principles are voluntary and open membership; democratic member control; member economic participation, empowering those members; autonomy and independence; education, training and information; co-operation between co-operatives; and concern for community.
There are many benefits to the way in which co-operatives put their values into practice today, in addition to what we might see as core economic benefits. There are thousands of community initiatives around the country, including some in my area. The co-operative movement in the UK has been a leading force for sustainability. There is a significant focus in the Co-operative retail group at the moment on reducing waste. The movement has been a leading force in promoting fair trade in Britain, and I am pleased to say that fair trade sales in co-operatives are rising year on year. Indeed, the Co-operative helps us to celebrate Fairtrade fortnight across the UK.
The co-operative movement has championed staff volunteering. Co-operatives UK, which is one part of the movement in the UK, estimates that the staff time it donates each year is worth about £1.7 million. There are programmes such as the Skills4Schools campaign, which helps to promote numeracy in primary schools and financial literacy in secondary schools. The initiative Farm to Work has led to thousands of primary schoolchildren visiting co-operatives at working farms. There are many ways in which the values of education, training and information are still at the heart of the co-operative movement. Co-operatives are engaged in the education system not only through Skills4Schools but in many other ways. I am pleased with the increase in the number of schools opting to become co-operative trust schools and co-operative academies.
Today’s focus is, rightly, as we seek to get the economy growing again, on the economic benefits of co-operatives. The number of entrepreneurs, employers and communities in the UK that own and control their businesses through co-operative enterprise has reached an all-time high, with a record 15.4 million membership of co-operatives. That is an increase of 36% since 2008 and 13.6% in the past year. The number of co-operative businesses in the UK has also risen by 28% since 2008 or the onset of the recession. The recent report published by Co-operatives UK, entitled “Homegrown: The Co-operative Economy 2013”, shows that co-operatives have a £37 billion turnover in the UK economy.
We might wonder why co-operatives have grown, at a time when little seems to be growing in this country. I think that it is because of the tough economic trading conditions, which have encouraged more and more Britons to turn to co-operatives to take greater control of their destinies and grow their own way out of recession. The Co-operatives UK report highlights the fact that co-operative shops had a combined turnover of £50 million in 2012, with more than 50,000 members. Those who have chosen the co-operative option, who are growing their own co-operative enterprises, include entrepreneurs,
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employers who share ownership of their firms, communities, customers and even sports fans, as my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) highlighted, who want to own and run their clubs. The growing appeal of sharing ownership, profits and control in line with the traditional values—democratic member control, voluntary and open membership, and autonomy and independence—has, in a diverse co-operative economy, brought about community pubs, foster care and child care providers, and multi-million pound co-operatives such as Co-operative Energy. In the energy setting, in addition to Co-operative Energy, we want many more mutual, local community co-operatives. That is why I support the strong points that my hon. Friends have made about amendments to the Energy Bill. I hope that the Government will now see sense on that matter, as I understand amendments have been made in the Lords.
People are taking action to form co-operatives because they want a say in what matters to them. In a time of limited economic growth and social challenges, people’s appetite is to seek independent control, to run a fair organisation that benefits all, and to put increasing importance on planning for the long term.
The recent study of the effect of co-operatives on local economies carried out by the independent economic analyst K2A showed that money spent by customers increases in value as it goes to local suppliers, to customers as a dividend, and to employees in wages; they in turn spend a proportion of their money locally. The estimates, using the benchmarks that are accepted around the world for examining the value of business in local economies, are that co-operatives generate an additional £40 for the local economy for every £100 spent by a customer. Overall, that means that co-operatives, rather than generating profits for outside investors or national or even global suppliers, generate £100 million for local economies.
Gavin Shuker (Luton South) (Lab/Co-op): Does my hon. Friend agree that the impact of co-operatives in the economy is felt not only locally but in tax revenues to the Exchequer, which pay for public services? To cite a simple example, there has been concern about the levels of tax paid by some water companies. In comparison, Welsh Water is a co-operative that does extremely well on that front and on environmental sustainability.
Andy Sawford: My hon. Friend is right to highlight the importance of Exchequer receipts from co-operatives, not only through business rates and other forms of taxation paid by those businesses, but also because co-operatives in the UK employ so many people who are economically active and who contribute to tax returns. That is one of the benefits of co-operatives, and I am pleased that my hon. Friend brought it up.
As for local co-operatives, the secretary-general of Co-operatives UK describes the effect of keeping so much money in the local economy, and generating additional value there, with the term “sticky money”. Co-operative money is sticky money: I think it is a good term. He says:
“It stays local, because co-operatives employ local people, are owned by local people and try to source from local firms that do the same. Every pound spent in a co-operative shop is a real boost to the local economy.”
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Co-operatives are known as trusted local businesses. Indeed, my hon. Friend the Member for Islwyn has told the Chamber about his experience of that. I share that experience of growing up, and the values that can be seen in co-operatives. Today, the value that they offer to communities is incredibly important.
In my community, the main co-operative is the Midlands Co-operative. It is one of the largest independent retail co-operative societies in the UK. It employs 7,000 staff, is member-owned and has a board of directors, one of whom—I should declare an interest—is my father. It had gross sales of £670 million and a profit of £24.3 million in 2012-13. It operates across a wide range of sectors—food, funeral services, crematoriums, transport—and has more than 300 trading outlets in 12 counties. I want to highlight its achievements.
The Midlands Co-operative Society was recognised as co-operative of the year, which I am sure you welcome, Mr Hollobone, as you must shop, as I do, in a Midlands Co-op in your constituency. It has the highest trading profit of all independent co-operatives, and it rewarded its members with a £4.3 million payout; it created 300 additional jobs in its trading area; it invested more than £0.5 million to help its employees develop their skills; it funded local community projects to the tune of £1.5 million; and it has refurbished many of its outlets to make them energy-efficient, reducing energy consumption.
All the Midlands Co-op stores have a locally sourced range—I have already referred to the initiative to take primary school children to the co-operative’s working farms—and the supply chain benefit of sourcing locally from firms that are less than 50 miles away is incredibly important. In my area, and yours, Mr Hollobone, the supply chain benefit is known as a “Taste of Northamptonshire”. The Midlands Co-op helps vital community initiatives, so I was pleased to support the Corby women’s choir recently at a great local event, and I welcome the news that the co-operative is backing grass-roots football in Thrapston in east Northamptonshire. The benefits are enormous.
I want to say a few words in support of the comments made by my hon. Friends about co-operative housing. I was pleased to hear David Rodgers mentioned in his role in the International Co-operative Alliance, but I have known him for some years as the former chief executive of the Co-operative Development Society, which I think would lay claim to being the largest co-operative housing organisation in Britain—we can have that debate with my hon. Friend the Member for Rochdale (Simon Danczuk) another time—not only for owning many thousands of units of housing directly, but for supporting co-operative housing organisations throughout the UK. The CDS has been a pioneer in introducing new models of intermediate market housing—desperately needed in this country—by looking at examples in north America, especially Vermont, where co-operative housing makes a huge contribution to the housing supply and in particular to intermediate market housing, but also in northern Europe. In cities such as Oslo in Norway, more than half the housing in the city is co-operative housing.
We need to look at the real potential offered by co-operative housing models in this country. In particular, we could link co-operative and mutual models with community land trusts—for rural as well as urban areas—to engage communities in bringing forward
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significant new developments. Community land trusts offer real potential to capture land values—for example, exception sites can be made community land trusts—and that is something we ought to look at. Using the mutual models, benefits such as corporate mortgages and so on can reduce the cost to people of purchasing their own home. In particular, under flexible models of share ownership, people can buy equity shares in the overall housing trust, which they take on with an element of housing equity growth, if that happens over the time that they are in the housing. That is much better and more flexible for people than traditional ways of getting a foot on the housing ladder or a stake in the housing market.
The community mutual model, as developed in particular by organisations such as Mutuo, has been taken up in Wales. There are community mutuals in Rhondda, in Torfaen and elsewhere in Wales, but I want to see more in England. I also want to see more community gateway models in England, such as those developed by the Confederation of Co-operative Housing; community gateway housing mutuals exist in Preston, Watford, Lewisham and Braintree. On hybrid mutual schemes, Rochdale Boroughwide Housing, which has 14,000 units—I understand why my hon. Friend the Member for Rochdale says that it is an incredibly large and important co-operative—is using an innovative new membership-based model of housing provision.
Those are real opportunities, but I hope that the Government will look at some of the legislative opportunities that might be available in the next few years, including the important Bill to support co-operative housing introduced by my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), to better support the development of co-operative models in the UK economy. Co-operatives can provide enormous benefit and could prove to be as strong in this century as they were in the last.
Mr Philip Hollobone (in the Chair): A last-minute entry from Stella Creasy—I thought you would not be able to resist as soon as payday loans were mentioned.
3.35 pm
Stella Creasy (Walthamstow) (Lab/Co-op): Thank you, Mr Hollobone, for your kindness in letting me speak in the debate.
I pay tribute to my hon. Friend the Member for Islwyn (Chris Evans) for securing a debate that is incredibly important to us all in the co-op movement. I want to make a plea for the Minister to understand why it is so important for us in the co-op movement—those of us who have worked in co-operatives—to start from the mindset of co-operativism, rather than models.
It seems that the debate requires us to put on record the co-operative history of our constituencies. I am afraid that Walthamstow cannot—unusually—claim to be first in this matter. We can trace our co-op history back to 1840, and the former national offices of the co-operative movement are in Walthamstow—we have a beehive on Hoe street to prove it.
Walthamstow has a strong co-operative concern because we recognise what my hon. Friend the Member for Corby (Andy Sawford) was setting out: the powerful
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case, especially in recent economic times, for co-operative values and how they work. Why has the co-op economy grown by nearly 20% in the past five or six years compared with what we have seen in our national economy? In Walthamstow, we would argue that it is precisely because of the mindset that co-operativism brings with it—the idea that we work for a broader set of values, and that what we do together, through democratic participation, can reap rewards well beyond mere financial profits. I am disappointed that the hon. Member for Hereford and South Herefordshire (Jesse Norman), the founder of the Conservative co-op movement, is not present in the Chamber, because we are concerned that it has a preference for considering the technicalities of how people work together, rather than why they work together.
I liked the phrase “sticky money” that my hon. Friend the Member for Corby used. A fantastic study from Lincoln shows that co-operatives bring about a multiplier effect that is around six times that of ordinary organisations in a community, so they bring resources into an area. The co-op mindset brings unparalleled creativity to thinking, and I urge the Minister to look at the work of some of our co-op councils. On a recent visit to Oldham, I was particularly struck by the council’s work on debt and financial difficulties. The co-op council negotiated a 30% discount on bus passes for those who joined the credit union. The scheme has been a fantastic success: the number of people joining the credit union has increased massively, thus increasing the amount of money available to lend, while the scheme has been cost-neutral for the bus company and has helped to get the city moving, so it is win, win for everyone. Such creative thinking takes place when our bottom line is the people we serve, meaning that we see people as part of the co-op, rather than just customers. The danger of looking only at employee co-ops—the John Lewis model—is that we miss out on the vital impact of working with the users of our services.
I am also struck by the work that is being done in Lambeth. My community in Walthamstow has a big problem with gangs, and the work that Lambeth is doing on youth services and co-ops is fantastic, as is the response from the local community, so I encourage the Minister to look at that. I also encourage him to go to see the energy co-op in Brixton. I am sure that my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) was talking about such co-ops earlier, as well as about the work of Supporters Direct and especially the “Show Wonga the Red Card” campaign. Whether on housing, social care or energy, co-op solutions are bringing a new creativity to all our public services that is benefiting users and reducing costs.
We know that the market alone cannot provide, which is the problem that we have with payday lenders. As you suggested, Mr Hollobone, I cannot go through the debate without talking about that problem, because the market is failing consumers. Co-op solutions are providing the answers in communities such as Walthamstow, where we have 18 of those lenders on our high street alone. I encourage the Minister to think again about his opposition to a cap on the cost of credit, because only when the cost of credit is capped and we examine how to lend to people responsibly, as social finance models and credit unions do, will a difference be made.
We need co-operative thinking not only in the credit union movement and on payday lending—we need the cap and an expansion in affordable credit—but in our
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social care. The Minister should look at Nottingham Circle’s adult social care or at co-operative schools. When we work together as a society, and as the co-op movement is ingrained in us from the grass roots up, we deliver the kind of future in which everyone can prosper. When we do not work in such ways, we can learn a lesson from New Harmony, which was the fantastic co-op that was set up by Robert Owen in America, but that fell apart after 25 years because although it had the co-operative model, it did not have the co-op mindset.
The difference that co-op members and co-op thinking bring is an understanding of not just how people work together, but why they work together and in whose interest, so that is what I challenge the hon. Member for Hereford and South Herefordshire and the Government to learn from this debate. I thank everyone who has taken part in it, and I am grateful to my hon. Friend the Member for Islwyn for securing it. I look forward to many more co-operative debates in the House.
3.40 pm
Catherine McKinnell (Newcastle upon Tyne North) (Lab): It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing the debate, which is extremely timely, given that it is being held during this year’s co-operatives fortnight. My hon. Friend is well known and respected for his staunch support of the co-operative movement, and he serves as one of 32 Labour and Co-op Members, some of whom are members of the shadow Treasury team. The debate has included several excellent contributions that put the case for co-operatives and their impact on the economy, and I will mention a few of the most powerful points that were made.
My hon. Friend the Member for Islwyn made a characteristically passionate speech about rebuilding trust in our society and the role that the co-operative movement clearly plays and can play in future. My hon. Friend the Member for Rochdale (Simon Danczuk) rightly and proudly proclaimed the historical roots of his constituency as the birthplace of the co-operative movement. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) talked about not just the past and the present but the future of the co-operative movement, while my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) touched on the potential for the co-operative movement to make a real contribution to many of the challenges that we are facing—not just regarding our energy solutions for the future, but in housing.
My hon. Friend the Member for Corby (Andy Sawford) referred to “sticky money”, which is a useful way of thinking about the contribution that co-operatives make to the economy and the issue of trust to which my hon. Friend the Member for Islwyn so poignantly referred. My hon. Friend the Member for Walthamstow (Stella Creasy) made a late but welcome contribution on the many benefits that the co-operative movement brings in finding innovative solutions to the challenges facing us.
I want to add my wholehearted support to this year’s co-operatives fortnight, the theme of which is “Choose co-operative”. It seeks to raise consumers’ awareness and understanding of the diversity and benefits of
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co-operatives, most of which are local, loved and trusted firms. The co-operative movement employs almost 100,000 people in 2,800 food stores throughout the country, and I declare an interest as a regular shopper at my local Co-op store, which never fails to impress me with its contribution to the local community and its clear desire to put something back. The Co-op also has a significant work force and a dramatic impact on local economies. The Co-operative Group estimates that it contributed £2.2 billion to national wealth in 2012, while co-operative businesses turn over more than £37 billion a year.
We should focus on what makes the Co-operative Group, one of the UK’s largest private employers and the country’s largest mutual business, different. What makes co-operatives—to use the theme of co-operatives fortnight—local, loved and trusted? The speeches made by all hon. Members have provided the answer: the ethical values and principles underpinning those businesses of honesty, openness, social responsibility and caring for others. My hon. Friend the Member for Corby referred to the clear principles on which the co-operative movement bases its approach. They are powerful in themselves, and together they make an important contribution to the economy.
The co-operative movement is about a different way of doing business. It puts sustainability, the welfare of local communities—in the UK and overseas—and its members at the heart of everything it does. The co-operative sector has grown by more than 20% since 2008, despite turbulent economic times, and has around 15.4 million members. It demonstrates that is possible to run a viable, thriving business while staying true to all the social values and principles that saw the Co-operative Group supporting 12,000 community initiatives. My hon. Friend the Member for Corby referred to some of its important work in that regard.
Under the “farm to fork” programme, more than 17,000 primary school pupils were invited to visit Co-op working farms in 2012 alone. The Co-op plays an important role in meeting the rising challenge of childhood obesity and the importance of linking where our food comes from and how it is produced.
An issue that is close to my heart and that was key in bringing me into politics in my youth is fair trade, and the Co-op is delivering record sales of Fairtrade products. Indeed, with sales up 20% over the past 12 months, the Co-operative Group is the UK’s leading Fairtrade retailer, selling three times the volume of such goods that would be expected for a business of its size.
Crucially for the UK’s current and future economy, the co-operative enterprise hub is a nationwide programme that delivers support and assistance to up-and-coming co-operative businesses. It provides advice, skills and support for co-operatives that want to start trading, that are in their first year of trading, that are experiencing rapid growth, that are planning to move premises, that are developing a new product service or market, or that want to change their management structure. The valuable support of the enterprise hub has helped more than 1,000 co-operatives. I am sure that the Minister will want to commend the hub on that impressive figure and that he will suggest how the Government will support its important work.
I would be remiss if I did not mention that 37% of directorships in co-operatives are held by women, which contrasts starkly with 13% in leading companies. Will
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the Minister comment on that and explain what the Government are doing to learn from the work of co-operatives in supporting women to get to the very top of decision making?
Let me turn to financial services and the Co-operative bank. My hon. Friend the Member for Islwyn explained that his co-operative values and principles, combined with his background in the financial sector, led him to campaign on the need for greater transparency in banks’ activities and transactions through his Banking (Disclosure, Responsibility and Education) Bill. Sadly, it ran out of parliamentary time last year, but it would have ensured that everyone, regardless of their background, would have equal access to routine affordable financial services and credit. He said that it was time that banks started serving society, rather than the other way round, and we should all support that.
The shadow Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Streatham (Mr Umunna), has said that co-operatives are not guarantees of special wisdom or perfect foresight. It is still too early to make a proper assessment of what went wrong at the Co-operative bank that led to the bail-in that was announced last month, but I want to echo the views of hon. Members, including the hon. Member for Warrington South (David Mowat), that it would be incredibly disappointing if the Co-operative bank’s ethos was lost because of a slight change in the way its shares are bought and sold. I would be grateful for an update from the Minister on that important issue for those Members who expressed concern about it.
I finish by again thanking my hon. Friend the Member for Islwyn for securing this important debate and giving Members the opportunity to mark co-operatives fortnight in a very apt way. I look forward to hearing the Minister’s response to the positive solutions that we have heard today.
3.50 pm
The Economic Secretary to the Treasury (Sajid Javid): It is always a pleasure to serve under your chairmanship, Mr Hollobone, and I congratulate the hon. Member for Islwyn (Chris Evans) both on securing this very important debate and on putting forward his case so eloquently. He entered Parliament in May 2010 and he has already made an outstanding mark. I would like to respond to the issues raised by hon. Members, and I will try my best to capture them all, including some of the questions from the shadow Minister, the hon. Member for Newcastle upon Tyne North (Catherine McKinnell).
As many hon. Members will be aware, the Government’s approach to mutuals was set out in the coalition agreement, where we committed to “promote mutuals” and “foster diversity” in the UK economy. That commitment, made in the Government’s founding document, underscores the importance that we attach to the sector. I would like to talk this afternoon about the contribution that the co-operative and mutual sectors make to the economy, and, I hope, to reassure all hon. Members of our determination to support them in their efforts.
First, however, I turn to the Co-operative Group itself, as raised by the hon. Member for Islwyn and other hon. Members. As the hon. Gentleman will be aware, the Co-op is at the forefront of the mutuals sector, with more than 4,800 retail trading outlets and an annual turnover of more than £13 billion. Clearly, the Co-operative
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bank is an important part of the Co-operative Group. I was pleased to see last month that the group has committed to strengthening the bank’s position, including through a commitment to inject capital. It would not be appropriate for me to say more, other than that the group is rightly taking action and strengthening its banking arm through that recapitalisation.
I turn to the co-operative sector as a whole. The Government have made it clear that the co-operative sector is of great importance to the UK economy. That case was made especially well by the hon. Member for Corby (Andy Sawford). In fact, co-operatives are ingrained in our culture. As we have heard, the first recorded co-op in the world was set up in Scotland in 1761. Building on those foundations, the birth of the modern co-operative movement can be credited to the Rochdale pioneers, no less, in the mid-19th century, as we heard so well from the hon. Member for Rochdale (Simon Danczuk). He correctly said that I am a Rochdale boy, and it is something that fills me with great pride. There are people in this world who do not know where Rochdale is—however shocking that sounds—but when they are told that it is the home of the co-operative movement, they immediately recognise the town’s importance. I am sure that the hon. Gentleman would agree.
From those humble beginnings, a thriving co-operative sector has blossomed. The UK now has more than 6,000 independent co-ops, and there is a co-op in every single postcode area. Those organisations provide valuable services across a wide variety of industries, including agriculture, finance and energy production. However, we should also remember that although co-operatives focus on serving their members, they are also businesses. The co-op sector in the UK had an overall turnover of well over £36 billion in 2012, which is why, in line with the Government’s commitment to promote mutuals, we have taken steps to support the sector and to enable it to thrive further.
Last January, my right hon. Friend the Prime Minister announced the co-operatives consolidation Bill, which will be introduced to Parliament in December this year. Although the Bill will not contain any new legislation, it will put all co-op legislation in one place, reducing complexity and making it easier for new co-operatives to be set up. I know that that will be welcomed by the co-operative movement.
In addition, we will consult very shortly on a further package of measures to support the co-op sector, including making insolvency procedures available to co-ops, so that a troubled co-op has more chance of being rescued. The hon. Member for Rutherglen and Hamilton West (Tom Greatrex) rightly raised the issue of football supporters’ trusts. As he will know, the Football Association is concerned about the inability of those trusts to go into administration. The changes that we propose in the consultation will hopefully help to satisfy that requirement, and help that sector of mutuals—football supporters’ trusts and others—to thrive further. We will also consult on raising the amount of withdrawable share capital that an individual member can invest in one society, so that co-ops can more easily raise capital from their members.
A very important subsection of co-ops, as we heard, is the credit union sector, which provides a mutually owned option for customers looking to save, take out loans, or, in some cases, to get current accounts and
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even mortgages. We have heard many Members today speak about the sector eloquently, including the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), the hon. Member for Islwyn, and the hon. Member for Walthamstow (Stella Creasy).
We have taken a number of specific measures to support the sector. Most visibly, the Department for Work and Pensions co-ordinated a recent feasibility study to examine the future of credit unions. It was announced only last week that the Government will take forward the study’s findings. That includes the Department for Work and Pensions making a further investment of up to £38 million over the next three years in credit unions, with the aim of supporting the credit union sector to provide sustainable financial services for up to 1 million additional people.
The feasibility study also proposed raising the maximum interest rate that a credit union can charge to 3% a month. The Government have announced that we will take that proposal forward, and it will apply from April 2014. That will enable credit unions to break even on the low-value, short-term loans that are the most expensive to issue, and to become more stable over the long term. That will be an alternative, as we have heard from some hon. Members today, to other avenues for borrowing for short-term loans, such as payday loans.
Stella Creasy: It is fantastic to hear the Minister supporting credit unions doing short-term lending. If he recognises that credit unions can do short-term lending at capped rates, why does he not think that payday lenders could lend at capped rates and introduce a cap on the cost of credit?
Sajid Javid: The hon. Lady will know that we have rightly given the power to an independent regulator to set capped rates, if it thinks that is appropriate in future. That is the correct way to deal with the issue.
In the interests of time, I must plough on. If we are to consider the wider mutuals sector, we should also consider building societies, which remain another key focus for the Government. We set out our approach to applying the recommendations of the Independent Commission on Banking on building societies in “The future of building societies” consultation paper. The consultation closed last year, and we are now considering how best to treat building societies in line with our aims. We will set out our proposed approach in due course.
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Several other questions were asked, and before I conclude, I will try to answer some of them as best I can. A number of hon. Members raised the issue of co-ops in the energy sector. The Department of Energy and Climate Change published a call for evidence on community energy in June 2013, and it will publish a community energy strategy for autumn 2013. That highlights the Government’s commitment to supporting community energy projects.
A number of hon. Members raised the issue of housing. I agree that the co-operative sector has an important role to play in housing, particularly because, between 1997 and 2010, we saw a decline in social housing in our country of more than 421,000 units. I think that the co-operative sector can make a contribution to turning that around, and it will benefit from Government funds that have already been made available, in particular, for affordable housing.
The hon. Member for Islwyn raised the issue of Northern Rock. We believe that the sale was in the best interests of the taxpayer, securing the long-term future of Northern Rock plc and increasing competition in the banking sector. The decision to proceed with the sale was based on the advice that the Government received from United Kingdom Financial Investments Ltd and independent advisers, having considered all bids and all other potential options.
Finally, in the interests of time, I will just address one more issue about the use of the name “co-op”, which was a good point made by the hon. Member for Rochdale. That is something, as he rightly identified, that is being looked at by the Department for Business, Innovation and Skills. I am aware that very strong representations have been made to the Secretary of State for Business, Innovation and Skills, not least by Ed Mayo of Co-operatives UK. The Business Secretary has committed to looking into the matter further and to making an announcement shortly.
In conclusion, I reiterate the Government’s support for the co-operative sector, and I thank all hon. Members who have taken part in today’s debate, especially the hon. Member for Islwyn for making his case so well.
Mr Philip Hollobone (in the Chair): Order. All good things must come to an end. I thank all hon. Members who took part in the debate and I ask those who are not staying for the next debate to leave quickly and quietly, because we are moving on to the important topic of selective licensing of landlords on the basis of poor housing standards.
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Selective Licensing of Landlords
4 pm
Graham Jones (Hyndburn) (Lab): It is a pleasure to serve under your chairmanship, Mr Hollobone, for what I believe is the first time. During this short debate, I want to make the case to the Minister that the Government should introduce measures to amend selective licensing of private landlords in order to allow local authorities to tackle poor-quality rented housing. They should do so by amending the Housing Act 2004 to create a third reason to bring forward a licensing scheme, adding to that of low demand and/or antisocial behaviour. I am talking about changes that will allow local authorities to add new licence conditions if they so choose.
At the moment, there is a huge problem, which is recognised by hon. Members on both sides of the House. Chronically poor housing persists, and in some areas, such as Haslingden and Hyndburn—my constituency—in huge concentrations. Local authorities are not fully able to enforce the housing standards enshrined in the 2004 Act—notably, the housing health and safety rating system. In itself, that is an inadequate standard that does little to tackle anything but the absolute worst of conditions.
Most local authorities faced with concentrations of poor housing do not have the resources to inspect, report, prosecute and enforce housing standards. Amending the 2004 Act would allow councils to fund, by means of selective licensing schemes, enforcement of decency standards as applicable to the area and as deemed appropriate by the local authority. That would bring the private rented sector into the 21st century. The Local Government Association has come out in support of that approach, and a large number of local authorities support the extension of the selective licensing system to cover qualitative standards in the rental market. That approach would, by the very nature of a selective licensing scheme, focus on areas of particularly poor housing and, crucially, it would meet the original aim of the Act—to improve housing standards.
In Haslingden and Hyndburn, low demand has led to considerable speculative property buying, resulting in a bloated private rented sector. Those areas typically contain old housing stock. They are areas of existing low demand and low value.
Mr Jim Cunningham (Coventry South) (Lab): I totally support what my hon. Friend is saying about a licensing scheme and expanding the abilities of local authorities to help, but does he agree with me that something should happen in addition to that, particularly in relation to poor housing? The Government should consider a return to what we used to call improvement grants, which were abolished by the previous Conservative Government. Also, given that rents are going through the roof, that should be examined.
Graham Jones:
Those are obviously two further issues, on top of the issue that is being discussed today. I certainly would call for a review to consider those two aspects of housing market renewal or housing regeneration. Obviously, on the grants issue, all Governments must now face up to the economic reality of Government expenditure. In the future, that issue may be a consideration,
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but I would like to focus today on the selective licensing aspect as a part-way answer to that shortfall in funding, which my authority certainly used to receive.
According to the Hyndburn stock condition survey, 78% of the stock in Haslingden and Hyndburn is pre-1919, compared with the national average of 45%. Entire streets are almost exclusively owned by landlords, to the extent that people are conscious of what I will describe as “landlorded” areas, where renting but more particularly buying is avoided. In my constituency, 15% of the stock is privately rented—that is the old figure; the percentage is rising, as it is nationally—compared with the national figure of 11%. However, when we zoom in on the poorer areas, we find much higher concentrations of privately rented properties in particularly poor condition, which are often owned by a small number of individuals. According to the last Hyndburn borough council stock survey, 26.6% of private rented properties had category 1 hazards. That is the highest rate of any form of tenure. If we zoom in on the Spring Hill and Scaitcliffe areas, the rate rises to 52.4%. If we looked at specific neighbourhoods or streets, it would be considerably higher still.
Despite the existence of legal powers and the duty on councils to enforce the housing health and safety rating system, there is still a high number of non-decent and dangerous homes. Hyndburn council has had the deepest budgetary cuts. It was surpassed in percentage terms only by Great Yarmouth and neighbouring Burnley. The figure was 16.9%, making it particularly difficult to employ staff to do such work. The reality across the UK is that councils do not have the resources to enforce and prosecute when it comes to the housing health and safety rating system. Extending the scope of selective licensing would in part resolve that.
Andrew Stephenson (Pendle) (Con): I congratulate the hon. Gentleman on securing this debate on a very important topic. As he will know, my constituency faces similar housing challenges to his. There are well over 1,000 empty properties and similar problems with rogue landlords. I know that he is very keen on selective licensing, but does he not agree with me that voluntary landlord accreditation schemes, such as the one operated by Pendle borough council, can deliver the same kind of results as he hopes to achieve through the extension of the selective licensing regime?
Graham Jones: In part, I share the hon. Gentleman’s ambition for voluntary accreditation schemes. In Hyndburn—in the wider constituency—there are 2,500 to 3,000 empty properties. I find that the accreditation schemes go some of the way and encourage those who wish to participate and to provide a tenanted property of a decent standard, but the rogues or poor landlords or long-distance landlords do not want to be accredited and do not participate in such schemes, and they are the people who are the target of any action to try to improve a neighbourhood, a particular property or the conditions for an individual or a family. Accreditation schemes have a role to play and can offer advantages, such as discounts in the licensing scheme; accreditations are often a passport to a reduced licence fee. There we have a reason to have an accreditation scheme, and such a scheme does encourage higher standards. But when it comes to minimum standards, we have to go further. One sits above the other, I believe.
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The work load of the council in dealing with private landlords and the sector is disproportionately large because of the size of the rented sector in the constituency of the hon. Member for Pendle (Andrew Stephenson) and in Haslingden and Hyndburn. Adding simple standards to a licence would be no great burden to the scheme, either financially or in terms of time spent on inspections, with the licence fee funding the extended enforcement activities of environmental health officers and landlord accreditation officers within the scheme.
I shall now deal with the effect that poor-quality homes have on the housing market, which is an important and neglected aspect of this matter. Poor-quality housing is one of the most visible social problems where it is prevalent, and unfortunately in many areas there are large concentrations of extremely poor privately rented properties. As well as the individual tragedy for the young family or particularly the young children in those properties being forced to live in unacceptable conditions, poor landlords cause wider degeneration issues. Streets and neighbourhoods quickly go into decline. While the south of the country and other high-demand areas are suffering a housing crisis of under-supply and high rents, low-demand areas are suffering an altogether different housing crisis—a crisis of substandard accommodation and unwanted properties to let, which are often abandoned. It is the mark of a civilised society that landlords provide tenants, and crucially their children, with basic elements to a property, such as double-glazed windows, a decent heating system, good insulation, safe electrics, and a reasonably modern kitchen and bathroom, which we would all expect in a property in which we lived.
People do not wish to live in sub-standard housing. Tackling low-demand and anti-social behaviour is important in itself, but it is not enough. Low-demand areas turn quickly into streets full of voids, as in my constituency and the constituencies of the hon. Member for Pendle and other hon. Members. Streets are effectively abandoned, which brings down the whole neighbourhood for a generation. The old ways of regeneration through Government grants have gone, for the time being. We must accept the economic times in which we live, and such a licensing scheme is an answer to that reality—a change for the future.
Standards should be another basis for selective licensing, because they fit with the original purpose of the powers, as defined in the 2004 Act. Poor housing standards are hugely damaging to the housing market in an area. They result in people living in areas they no longer wish to be in, lead to negative equity for innocent owner-occupier neighbours, and explain in part why one in 13 properties stands empty in my constituency. There needs to be recognition that undesirable, poor-quality private sector housing is a cause, as well as a symptom, of low demand and weak markets. Making such a change would complement the original aims of selective licensing. The Minister might be able to point to many examples where that is not the case, but I would make a powerful case—one that I am sure he would accept—that in too many areas poor standards are a reality and local authorities should be allowed to license landlords and bring housing up to a reasonable standard. I hope that he will not respond by simply restating that local authorities
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already have such legal powers; he must recognise that there are problems in the private rented sector that are not being resolved in the existing framework.
These are austere times, when Government programmes for deprived neighbourhoods have all but run dry. Driving up conditions through selective licensing could rebalance housing markets and provide prospective residents and tenants with greater confidence. Cash-strapped town halls need new, more value-driven solutions to the problems of poor housing; a modified 2004 Act might just provide them. Selective licensing was brought in to deal specifically with the problems of declining neighbourhoods, and now it must be extended to meet that ambition.
In conclusion, the private rented sector cannot be seen in isolation from the wider housing market and owner-occupation. Aspiration cannot be removed from whole neighbourhoods. Tenanted families should have the right to a property we ourselves would call a home: double-glazed windows; a decent heating system; good insulation; safe electrics; and a modern kitchen and bathroom. If we make a very small change in the law, we could begin to tackle endemic poor standards in the private rented sector, which would, importantly, give the young children of the future the hope of a better life—a decent life—away from squalor and, more crucially, begin seriously to tackle low demand and regenerate some of England and Wales’s most deprived areas.
4.13 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster): It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Hyndburn (Graham Jones). He is a passionate advocate for this important issue and I am genuinely grateful to him for raising it. As I will say in a moment, this is our second time discussing these issues in a relatively short time.
As the hon. Gentleman knows, the private rented sector is an important part of our housing market. Some 3.8 million households live in the sector, which has seen a huge increase from including 9% of all households in 1988 to about 17% now. The Government actively support that growth. Our “build to rent” fund will support new high-quality, large-scale development for private rent. Notwithstanding the problems he raises, most private sector tenants are happy with their home and the services they receive: the English housing survey found that 84% were satisfied with their accommodation, compared with 77% of local authority tenants. The average tenancy has extended, and now lasts for about two years; nearly 20% of tenants have lived in the same property for more than five years. Importantly, the same survey found that 91% of tenancies were ended by the tenant, rather than the landlord. It is pleasing to note that rents are stable. The latest figures from the Office for National Statistics show that over the past year rental increases were below inflation: in England, they rose by 1.3%, while in London, the figure was higher at 2.2%, but still below inflation.
I know the hon. Gentleman and many members of his party have been keen to push for a national register of landlords. The Government have rejected that proposal, not least because it would cost some £330 million over 10 years—costs that would be passed on to tenants. He rightly raised concerns about some landlords, and I am aware that a minority of landlords fail to meet their
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basic responsibilities: they neglect their properties and exploit their tenants by placing them in unsafe and unsuitable living conditions. We should focus our attention on them; a point he rightly raised today. Frankly, those landlords have no place in the sector and we are determined to take firm action to crack down on them, which is why earlier today we announced that £3 million of funding would be made available to support local authorities dealing with particularly acute and intractable problems caused by rogue landlords. I am sure that we will discuss access to that funding with the hon. Gentleman.
We have been concerned in particular about beds in sheds—the extreme manifestation of rogue landlord problems. Backed by £2.6 million of Government funding, more than 500 illegally rented outbuildings and overcrowded homes have been discovered. Just this morning, a successful raid was carried out in Hillingdon, where two sheds were found to be being used as illegal accommodation, two of the occupants of which were found to be illegal immigrants and were detained by the police.
I know that many properties in the hon. Gentleman’s constituency are old, frequently in poor condition and, as he said, expensive to heat. Such homes can be less desirable than more modern buildings, and therefore more difficult to rent out, so the properties stand empty for long periods, blighting the local area. Of course, where a property is in a dangerous state of disrepair and there is a risk of harm to the occupants, the local authority should make use of the powers under the 2004 Act to take enforcement action. I discussed that with the hon. Gentleman when we met last month. In some areas, where demand is low, landlords need support to improve empty homes and bring them up to modern standards, which is why my Department gave a grant of £9.4 million to the Pennine partnership, which includes his constituency, to help refurbish and bring empty properties back into use. Hyndburn borough council received a £3.8 million share of that grant to develop the Woodnook neighbourhood, which will be complemented by a loan of £2.5 million from round 1 of the Get Britain Building fund.
Graham Jones: Will the Minister give way?
Mr Foster: I am happy to give way. I want to illustrate that we are providing support to housing of the type that the hon. Gentleman describes in his constituency.
Graham Jones: I want to put it on record that the meeting we had a month ago was very constructive. I acknowledge that £3.8 million has come to the Hyndburn area for some 200 properties. My wider point is that we have 3,000 empties and 4,000 to 4,500 rental properties; the empties are largely part of the rental market. There is a much bigger problem, for which selective licensing would have a broader reach with a broader brush, but I appreciate that we are dealing with 200 properties through the scheme that the Minister mentioned.
Mr Foster: I am grateful for that acknowledgement. There is, of course, always more that can be done. The hon. Gentleman will know that we have recently given local authorities the power to increase council tax by up to 100% for empty properties—
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Mr Foster: I know what the hon. Gentleman is going to say.
We have also given local authorities the power to increase council tax for such properties by 150% after two years. Let me just say to the hon. Gentleman—[Interruption.] I will let him intervene, and I will then answer the question I know he is going to ask.
Graham Jones: I think the Minister knows what I will say—he is correct in saying that. I hope that I represent the hon. Member for Pendle in saying this, because it affects us both. We are in a unique position in that our areas are not in a unitary authority, so the rise in council tax cannot be put back into dealing with empty properties because it all goes to the shire authority, to be spent on other services. That is a problem that we face in local government structures, so although the measure is welcome, it is not helpful on the ground.
Mr Foster: May I just say—as I was going to, because I knew that that was the matter that the hon. Gentleman would raise—that the measure puts pressure on landlords to take action to get properties back into use, even if the extra money from the council tax does not go directly into the local council? It is, therefore, an important measure, in that it puts additional pressure on landlords.
The hon. Gentleman has rightly acknowledged that local authorities have a range of powers with which to tackle problems with poor housing, of which selective licensing is just one. He also rightly said that, at the moment, selective licensing can be introduced only when a local authority is able to demonstrate that a particular area suffers from low housing demand or has a significant and persistent problem with antisocial behaviour. Selective licensing is not, of course, the only solution. It is important to remember that local authorities have other options open to them. One such option, which we strongly support, is to introduce a voluntary licensing scheme for landlords, which can, and does, help to raise standards across the board. My hon. Friend the Member for Pendle (Andrew Stephenson) referred to one such successful scheme in his constituency.
The hon. Gentleman suggested that the criteria for selective licensing should be made more flexible, by way of an additional criterion enabling it to be introduced when a local authority has general concerns about the quality of housing. Given that other enforcement powers are available, I am not yet—and the hon. Gentleman should note that I stress that word—convinced that that is necessary, but I am aware that there is little information about the use or impact of landlord licensing, whether selective or voluntary.
Graham Jones: Although the Minister and I have always had a constructive dialogue and share a similar thought process on the matter, we diverge slightly on this point because I believe that there is a role for selective licensing.
Regarding the two schemes, the housing health and safety rating system is run from within the revenue grant of a local authority—I have stated Hyndburn’s position—and the inspectors involved in landlord licensing cannot inspect for that scheme because it is a separate stand-alone one. There is a bilateral system, with two schemes being run in parallel, and there is a case for arguing that they come together.
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Mr Foster: I note the hon. Gentleman’s point. I remind him that because the Government have removed much of the ring-fencing from local government funding, it is for local government itself to decide how to make use of the funding.
May I now be positive? I recognise that perhaps we do not have enough information about the impact of licensing schemes, and I have, therefore, asked my officials to gather information over the summer on how the schemes are used and on the impact they have locally, and I hope that the hon. Gentleman will be willing to contribute information that will help us in our consideration. Although there are no immediate plans to review the legislation, we are keen to ensure that local authorities are able to use it proportionately and effectively. The information gathered on how existing licensing schemes work in practice will be used to inform an update of the current guidance for local authorities on selective licensing.
I am grateful to the hon. Gentleman for raising this issue. It is important that local authorities have the right tools to manage housing in their area as effectively as possible, while not putting undue burdens on landlords who already provide a good service. I hope that the hon. Gentleman will recognise that I seek to be as helpful as possible. We need more information before any further decisions can be taken, and I hope that he will participate by providing information that will help us.
Graham Jones: I want to place it on record that the Minister is trying to be as helpful as he possibly can, but I would like to see the Government go further and faster, and a visit to some of the worst areas might accelerate their thinking on the issue.
Mr Foster: I am grateful for the invitation to visit the hon. Gentleman’s constituency, and if the opportunity arises I will certainly do so. I should say, however, that I have recently made visits around the country, not least to look at empty homes—we are determined to do as much as we can to help bring them back into use—and I have had the opportunity to see areas that are very similar to the one I suspect I would find if I visited the hon. Gentleman’s constituency. Nevertheless, if I get the opportunity I will pay such a visit.
I am grateful for the hon. Gentleman’s generous remarks. We are trying to be as helpful as we can. I know that he would like us to go further, but I cannot commit to that without having more information. However, we will certainly look at the information we gather over the summer and see where it takes us.
4.26 pm
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Disabled Access (Train Stations)
4.30 pm
Rory Stewart (Penrith and The Border) (Con): It is a great pleasure to appear under your chairmanship, Mr Hollobone. It is an extraordinary testimony to the interest in disabled access that there is such a large turnout from all parties for this debate. I want to speak briefly to allow other hon. Members to intervene.
If we are looking for a distinctive British contribution to the world since the second world war, we could do a lot worse than looking at what has happened with disabled rights. Britain has genuinely been in the lead on disabled rights, and that has involved all parties. In 1970, Alf Morris introduced the first disability legislation in the world; he was the first Minister for the disabled. In 1995, the Conservative Government introduced the first disability discrimination legislation, and it was a Lib Dem and Conservative coalition that brought in the equalities legislation. That is something of which all parties should be proud.
The issue of disabled rights reflects two important moral insights: one is the contribution that disabled people make to our society, which we wish to celebrate, support and encourage, and another is the important issue of rights or equality—in other words, the fact that disabled people, along with all the other groups who have been focused on since the second world war, deserve equal dignity and respect.
I very much feel that fact personally. My younger sister is disabled, and over the past 20 years I have been struck by how generous and imaginative Governments have been in supporting her in education and transport, and now in providing her with mentoring in the workplace. Governments have done that in hospitals, and they have worked well in libraries and community halls. They need to do so, because there are 12 million disabled people in this country.
The great remaining challenge to Britain—the final frontier—is in transport. Sadly, transport has not quite reached the level that has been achieved in other public service provision. The rights for disabled people that were originally laid out in 1970 have not been fully realised in the field of transport, and that is becoming increasingly important. For example, the number of disabled people using trains has gone up by 55% or more in the past five years. About 77 million individual trips a year are now taken by disabled people.
Huge progress has been made in the constituencies of some hon. Members, and people have been in touch to congratulate the Government on the work already done on specific train stations. Nevertheless, it remains a challenge, particularly for smaller and more rural train stations. There are a number of reasons for that.
John Howell (Henley) (Con): That matter relates not just to regional stations. Goring station is in my constituency, which is a centre for disabled access, as it turns out. People travelling from that station have to go a huge distance beyond it or to fall short of it by a huge distance if they wish to cross platforms, because they have to do that at stations that have lifts to allow them to cross platforms and get a train going the other way.
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Rory Stewart: My hon. Friend makes an important point, because that is true. At a time when we are about to spend an enormous sum on High Speed 2, partly to accelerate people’s journey times, disabled people up and down the country face much longer journey times because of the necessity of travelling on—for example, from Goring to another station—to get from one platform to another. One of my constituents who is unable to get off the train at Penrith has to travel to Carlisle and wait for a train coming south, which adds approximately 50 minutes to her journey every time she travels.
Philip Davies (Shipley) (Con): I agree with what my hon. Friend is saying. Another example is at Menston station in my constituency, which has two platforms. People have to go from one platform and come back to the other—they have to use both. There are many car parking spaces for disabled people, but only a massive footbridge between the platforms. Whereas disabled people can park there, they cannot actually get from one platform to the other. Does he agree that that situation cries out for Access for All funding from the Department for Transport to make the station fully accessible for disabled people?
Rory Stewart: Absolutely. That is an exact example of the importance of the Access for All funding provided by the Department. I am sure that the Minister will discuss that at greater length. Of course, it is not quite as generous as we would like. There is not yet a legal obligation on the Government to provide Access for All funding, so it is unlikely to be able to provide for more than a minority of the cases represented by hon. Members in the Chamber.
Guy Opperman (Hexham) (Con): I welcome my hon. Friend’s campaign, which is supported by Northumberland and the Tyne Valley Line rail users group. Does he agree that the campaign to rebuild Gilsland station—it starts in my constituency, but ends in his—would be the perfect place to have a station with proper disabled access?
Rory Stewart: It is very difficult for me to disagree with my hon. Friend.
I have a more serious and general point that is worth raising with the Minister, who is kindly giving us his time today. One of the challenges for Gilsland and smaller remote stations is one of metrics and measurement, and about how the Government assess which stations to prioritise. Understandably, they tend to focus on footfall as a way of prioritising stations, but that misses many things. It misses the fact that a remote rural station suffers from general transport issues, such as fuel poverty and a lack of bus services.
Remote rural areas tend to have issues relating to an ageing population—demographic issues—that are not necessarily captured by the Government’s form of measurement. For example, the absolute number of people getting off at Penrith station is not that dramatic, but the number of people aged over 65 in my constituency will double in the next 10 years, so that the majority of people in my constituency will be over 65 in 10 years’ time. They may not have disabled cards, but to come down 45 steps with a 35 kg suitcase and get up the other side is not necessarily a problem simply for the disabled.
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Jim Shannon (Strangford) (DUP): I thank the hon. Gentleman for bringing this matter before the House. The reason why everyone is here is that we can all relate to this issue.
In a previous life in Northern Ireland, I was a Member of the Northern Ireland Assembly, which decided to introduce a strategy to address the issue. Every train and almost every station in Northern Ireland now has disabled access. Some £18 million was set aside last year for that purpose, and there are only two stations left to do in Northern Ireland. Is not the real issue that the Government have to set aside money to meet the equality legislation, as we decided to do to meet the needs of disabled people across the whole of Northern Ireland? We have two stations to do—almost there.
Rory Stewart: That is a wonderful example. The argument is about learning not just from Northern Ireland, but from the symbolic benefit. At a time when the public are increasingly frustrated and perplexed by what politicians are up to and about what our job is, such projects are highly visible—people can relate to them and see them—and they generate employment. They are exactly the kind of highly visible infrastructure projects that this Government are promising and that I believe we ought to be able to deliver.
George Freeman (Mid Norfolk) (Con): I am reluctant to interrupt my hon. Friend’s eloquent exposition. If I might be forgiven the pun, he is making a very good set of points. In particular, he makes a good point about how this country has reached out to the disabled community. Anyone who watched the Paralympics last year would be disabused of any remaining notion that disabled people are not able to rise to the challenge.
Does my hon. Friend agree that disability access is often access for others as well? At rural stations in my constituency, investment in disability facilities benefits bike users, mums with prams and others who are less able to get around. Does he agree that stations in rural areas, with rural broadband and infrastructure, are often the hub of a vibrant rural economy? In my constituency, Wymondham station is the model. I was recently lobbied by some constituents, led by Joy Batley. They have to get off at the southbound platform and get a taxi back to the other side to cross the track.
Rory Stewart: My hon. Friend makes a very eloquent statement. It strikes me that that point—that we should not focus simply on footfall or on disability numbers—is absolutely essential to make to the Minister. My hon. Friend’s argument is crucial: we are of course talking not just about people over 65 or those with prams, but about the usual requirements of tourists, for example. Many of us may represent constituencies that have a high number of tourists, who by their very nature tend to travel with large suitcases and bags.
Steve Brine (Winchester) (Con):
I congratulate my hon. Friend on securing this debate. He is absolutely on the right track—[Hon. Members: “Oh!”] Even as I said it, colleagues. May I welcome his debate today, and wish him luck with his campaign locally? If he wants some inspiration, he could visit the great city of Winchester where Network Rail has just announced that it is to install a footbridge over the station with a lift either
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side, so that disabled elderly people and visitors can get around. At the moment, the situation is exactly as my hon. Friend has been describing—getting taxis to go round the one-way system just to cross the bridge. He is welcome to come to Winchester at any time, and I am happy to spread a bit of light into his debate.
Rory Stewart: My hon. Friend is very kind. The situation in Winchester is exactly what places such as Penrith would dearly love—a lift and a footbridge across the station. At the moment, if a seriously disabled person is in a wheelchair at Penrith station, unless they travel up to Carlisle, they have to make a formal request—there are 14 formal requests a day and scores more that are not formally made in advance—which involves them being pushed across the great west coast main line in the gaps between trains travelling at 125 mph. Those are not exactly the kind of conditions that we wish to encourage.
Lisa Nandy (Wigan) (Lab): The hon. Gentleman is very generous with his time. Notwithstanding all the points that he has made, with which I agree, does he accept that there is a real issue about the disappearance of staff from many stations? However many adaptations we introduce, some people will always need extra help to get around. As well as needing that additional assistance, many people with disabilities have been subject to hate crime, and so may be deterred from travelling alone to places where there is not a staff presence.
Rory Stewart: The hon. Lady is absolutely right. She takes us back to the bigger strategic point that the Minister has had a grip on throughout this Administration, which is that we believe in rail and we believe in trains. We are investing an enormous amount of money in that idea. In doing so, we might as well get it right. The sums of money we are talking about to have the right kind of facilities available for disabled people are relatively trivial compared with this enormous bet that the Government are making and that the Opposition voted for on the future of rail travel. If we are spending £43 billion on a high-speed line so that people in my constituency can fly up to Lichfield and then on their trains fly up to Penrith, it would be a great pity if, at the other end, they were unable to get off the train at all.
Nigel Mills (Amber Valley) (Con): Does my hon. Friend agree that using footfall as a measure is pretty unfair on a station such as Langley Mill, which has a steep and slippery staircase? It is hard for many passengers to use the train. Perhaps if we had stations that were fit for the modern world, we might get the footfall. It is especially hard to understand when several million pounds can be found to invest in a station a few miles down the line, but a few hundred thousand cannot be found to put disabled access into an existing station.
Rory Stewart:
That is a vital point. It returns us to the general theme, which is that when we have made the big investment, the big bet, a relatively small amount of money would make all the difference in use. The fact that people in Penrith and the Border can get up to Cumbria in three hours and 15 minutes is the most extraordinary transformation—for tourism, for our
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economy, for small businesses, for people’s quality of life, for connections to other parts of the country, and for people’s ability to go abroad. All of that is being held back by what would probably be an investment of a few hundred thousand pounds to finish the job.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): I am grateful to the hon. Gentleman for giving way and I congratulate him on choosing such an important subject for debate and on his eloquence. He referred earlier to legislation that has been passed by this House, and I am sure that as he continues his research he will find that in 1986 I was fortunate enough to pilot through the House the Disabled Persons (Services Consultation and Representation) Act 1986. The thematic support for the Act was based on advocacy, because not all disabled people can speak for themselves. Some, as we know, were placed in guards’ vans at that time and given very little help. Can I get the hon. Gentleman to agree that, in addition to what he is doing, which is excellent, he will support advocacy so that those who cannot speak for themselves will find that their views do not go unreported?
Rory Stewart: Absolutely. Indeed, I pay tribute to the right hon. Gentleman for the extraordinary work that he did in the 1980s. Yet again, at a time of cynicism about Parliament, cynicism about Back Benchers, and cynicism about what people can contribute, the contribution that he made as an Opposition Back Bencher at that crucial stage was really heart-warming.
Andrew Stephenson (Pendle) (Con): My hon. Friend is being incredibly generous with his time. I congratulate him on securing this important debate. Does he agree that it is not just a matter of stations but a real lack of consistency between train operators on disabled access? A constituent of mine uses a mobility scooter, and I was told by Northern Rail that because it has 13 different types of train, most with ramps that are steeper than eight degrees and therefore in its eyes unsafe to use, she has to be accompanied by someone to fold and lift her scooter on to each individual train. In other parts of the country, train operating companies have come up with solutions to that. Does my hon. Friend agree that train operators should try to find a consistent common approach to the issue of access for people using mobility scooters? Perhaps the Minister could look at that as part of the franchise process.
Rory Stewart: My hon. Friend makes two important points. The first is about the inconsistency between operators, which is something that we have experienced very personally in Penrith. The apparently winning bidder for the west coast franchise committed to install a lift at Penrith station. When that franchise collapsed, having got a written commitment from the chief executive of that group, we ended up going back to Virgin and no such commitment is emerging. Virgin says that it has no interest in the work because it has only four or five years to run on its franchise. That has been a great disappointment for us and illustrates my hon. Friend’s point.
The second, bigger point, and the more important one, is that disabled access at the train station—in other words lifts—is only the beginning and not the end of the conversation. There are any number of other things to be considered. Some of them are to do with changes
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in technology available to disabled people, the increasing use of mobility scooters and the importance of being able to get them on and off trains and the height of the platforms—in many cases, the platforms are built at the wrong height for people to be able to get off the train. Those may be expensive interventions but they certainly need to be part of our objectives.
Another objective is access to disabled lavatories on board trains. Recently, one of my constituents was seated in the wrong carriage and was unable to access the disabled lavatory. No one was able to assist them to get from one carriage to another, and the result was really distressing.
To conclude, this is a matter of which Britain should be proud. All Back Benchers and all parties—all the way from Northern Ireland, through the Labour party, the Liberal Democrats and the Conservatives—have done an extraordinary amount to show what Britain means in terms of disabled rights and disabled access. This is also a Government who are proud of their infrastructure investments and their contribution to employment through infrastructure, particularly through railways. We must put those two things together. If we can do that, we can look forward to a day when all hon. Members will be able to access the wonderful conditions that are now available at Winchester station. All Members who have gathered today to talk about the problems of access in their own constituencies will be able to get to where we would like to be at Penrith, which is a world in which the millions of people using trains, including the 7.5 million tourists who go to the Lake district every year, will step off that train on to Penrith station and see a brand-new lift, and they will see it not just as an article of public convenience but a symbol of British civilisation.
Mr Philip Hollobone (in the Chair): We are now, metaphorically speaking, going to struggle with our suitcase over the footbridge from the hon. Gentleman’s remarks to the Minister’s response.
4.48 pm
The Parliamentary Under-Secretary of State for Transport (Norman Baker): That is the most eccentric introduction that I have had for quite some time, Mr Hollobone.
I congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart) on his contribution. I warmly welcomed the way in which he presented his case and endorse his analysis entirely. Let me say for the record that there is a good turnout for this debate. To be honest, it is a pity that it is not a one-and-a-half-hour debate, but I congratulate him none the less on taking a record number of interventions in a half-hour Adjournment debate.
In recent years, expectations about accessibility have changed, both among disabled passengers and the railway industry, and that is a good thing. The success of our transport networks in providing accessible journeys during last year’s Olympics and Paralympics shows what can be achieved. Unfortunately, however, many of our mainline railway stations date from Victorian times, and those 19th century stations were not built with the needs of 21st century passengers in mind, which has left us with the huge task of opening up the rail network to disabled passengers, which is obviously what we want to do.
Clearly, accessible stations make a huge difference to people’s journey experience—not only people with reduced mobility, but those carrying heavy luggage or pushing
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unwieldy pushchairs. From a personal point of view, I had no idea how inaccessible the tube network was until I became a dad and had to start lumping prams up and down stairs.
The Government therefore remains committed to making further improvements in this area and has continued to support—indeed, to expand—the Access for All programme, which the previous Government launched in 2006. The main programme, which is worth £370 million in 2004-05 prices, will deliver accessible routes at more than 150 stations. To secure value for money, stations were selected based on their annual footfall—several hon. Members referred to footfall during the debate—weighted against the incidence of disability in the area on the basis of census data. Around a third of the stations selected were chosen to ensure a fair geographical spread across the country. We also took into account the views of train operators and proximity to facilities such as hospitals, schools for disabled children and military rehabilitation centres. I noted the points that my hon. Friend the Member for Penrith and The Border made, so I will ask officials to consider whether the criteria should also take account of the nature of remote rural areas.
Duncan Hames (Chippenham) (LD): I thank the Minister for giving way and, indeed, for the inclusion of Chippenham railway station within the Access for All programme. However, it was more than four years ago when railway staff first told me that we were going to get lifts and disabled access at that station, but the scheme is still to receive planning permission from Wiltshire council. Does the Minister agree that a misguided sense of priorities is preventing us from having access for the 21st century on a Victorian railway? I am sure that the last thing that Brunel would have wanted was for such considerations to inhibit decent access to his railway at Chippenham.
Norman Baker: On Chippenham station, I am advised that Network Rail had to go through the lengthy planning process to which my hon. Friend correctly referred, which of course also involves building consent. In addition, it has to co-ordinate its plans with other projects in and around the station. However, I am told that that has now happened and that a detailed design for the project is complete. Work is due to start in November this year and to be completed by July 2014. However, I have asked Network Rail to review its time lines to determine whether it can accelerate construction, given the delay that has already occurred.
Andy McDonald (Middlesbrough) (Lab): Given the comments that have been made in the debate and the expectations on train operating companies to build in such facilities described by the hon. Member for Penrith and The Border (Rory Stewart), will the Minister consider giving some guidance on, or commenting about, the extent to which we could build these requirements into the franchising contract documentation and place obligations on the train operating companies to deliver those very facilities?
Norman Baker:
I want to come on to the various mechanisms through which improvements can be made, but the hon. Gentleman is right to say that, in theory, franchise requirements can be designed to achieve them.
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However, other methods are perhaps more effective. If I may make some progress, I hope that I will be able to give him some comfort.
Some 104 of the projects under the Access for All programme have already been completed, which is good news, and we expect the majority of the rest of the projects to be completed by March next year, which will be a full year ahead of schedule. The work has included significant engineering work at stations such as Clapham Junction, which is the station with the most daily train services in Europe and is now fully accessible for the first time in its 150-year history.
Mr Robin Walker (Worcester) (Con): I commend my hon. Friend the Member for Penrith and The Border (Rory Stewart) for securing this debate. I just want to thank the Government for the Access for All programme on behalf of my constituents who use Worcester Shrub Hill station, another magnificent Isambard Kingdom Brunel station that will be getting new lifts under the Access for All programme this year.
Norman Baker: I am grateful for that intervention. My hon. Friend’s constituents will doubtless be aware of his involvement in pushing for that particular improvement.
To build on the success of the Access for All programme, last year’s high-level output statement included £100 million to extend the programme until 2019, despite the difficult economic circumstances. We have asked the rail industry to nominate stations for inclusion in the extended programme, using the criteria to which I referred, and hopefully taking on board the point that my hon. Friend the Member for Penrith and The Border made about remote rural stations. We also want the industry to take account of factors such as improving inter-urban journeys and the availability of third-party match funding, which can be used to weight business cases for individual station projects. The views of local authorities are also important when considering these matters, so they will be taken into account.
We want to tie in access improvements with other projects to help to deliver efficiency savings by combining costs, including project management costs. For example, last November I opened a joint national stations improvement programme and Access for All project—two different funding streams—at Horsham station, which was worth more than £4 million of Government and local authority funding. This excellent project shows exactly what can be achieved when different stakeholders co-ordinate their plans to deliver a better experience for passengers. I would welcome more examples of such co-ordination in the future.
I would expect a number of stations that were close to being included in the current Access for All programme to be nominated again this time around. They include Penrith, in my hon. Friend’s constituency, where Network Rail has already been looking at options for providing step-free access. I know that the station is one of the few on the west coast main line without a proper accessible route, and that it is an important interchange with National Express coaches and bus services to other parts of the Lake district. All those factors will make Penrith a strong candidate for inclusion in the Access
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for All programme, although I obviously cannot guarantee that it will be included. Although Network Rail is busy considering the matter, I would expect Virgin, the train company involved, to be frankly a little more sympathetic than appears to have been the case to date. I expect the industry to complete the nomination process by the end of this year, which would enable us to be in a position to announce the successful stations by April 2014, the beginning of the next rail control period.
It is important to remember that improved access can often be achieved using relatively small amounts of funding, combined with innovative thinking by the industry, so the Access for All programme includes an annual small schemes fund of around £7 million a year. That money is allocated between the train operating companies, based on the number of stations they manage and how busy those stations are. Since 2006, more than £100 million of investment, including contributions from the train operators themselves and from local authorities, has seen projects delivered at more than 1,100 stations, which is almost half the total number of stations in this country.
A variety of projects have been supported, including: better provision of accessible toilets; customer information systems, which have now been installed at more than 80% of our national stations; blue badge parking spaces; and features such as induction loops at ticket offices to help those with hearing impairments. The work has removed barriers to travel for many disabled people, and these are real examples of projects that are delivered at a relatively low cost, but have high value.
In 2011, we released £37.5 million of Access for All mid-tier funding to help projects needing up to £1 million of Government support. A total of 42 projects were successful, ranging from the provision of step-free access—via lifts—at stations such as Alton, which serves Treloar college for physically disabled students, to a Changing Places disabled toilet at Paddington and easier access platform humps to reduce the stepping distance between the platform and train at several stations throughout the country. The first phase of those projects is now finishing, and the remainder of the projects are due to be completed by the end of this financial year.
I do not want to give the impression that that is all we are doing to improve access at stations, however. Access for All is over and above work delivered as part of other major investment programmes or work undertaken directly by train operators, which are each required to invest an average of £250,000 a year on improving stations under their minor works programmes as part of the franchise requirements. I understand that that money is now almost exclusively spent on access improvements. We heard mention of High Speed 2, and I want to make it clear that all new stations on the HS2 route or anywhere else—we are busy opening new stations under the new stations fund and the local sustainable transport fund—will be fully accessible.
We are determined to ensure that all rail vehicles are fully accessible, because there is no point in having accessible stations if people cannot get on the train. The latest figures show that more than 7,600 rail vehicles have been built or refurbished to modern access standards, which is 45% of all rail vehicles, including half of all trains—that is the difference between carriages and trains. More than 500 older rail vehicles have been fully refurbished to modern access standards, and contracts
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have been placed for work on hundreds more. Meanwhile, my officials, with assistance from the Disabled Persons Transport Advisory Committee, continue to provide compliance guidance to the rail industry ahead of the 2020 deadline for all rail vehicles to be accessible. It is a firm commitment of the Government that all rail vehicles will be accessible by 2020, and we are determined to make sure that that is kept to. By the way, there are similar commitments on buses, which are equally important, if not more so, for people in rural areas, as my hon. Friend the Member for Penrith and The Border will no doubt accept.
In summary, I hope that I have been able to demonstrate that the Government is committed—note to Hansard: the Government “is” committed, not “are” committed—to improving access at stations for disabled passengers
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through specific projects such as Access for All, as well as under improvements delivered as part of our wider commitment to improving the rail network.
I am grateful to hon. Members who contributed to the debate. The evidence of the turnout of Members demonstrates the importance that parliamentarians attach to this issue, and that is matched by the importance that we in the Department for Transport attach to it.
Mr Philip Hollobone (in the Chair): I congratulate the hon. Member for Penrith and The Border (Rory Stewart) on securing the debate.