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House of Commons
Wednesday 25 June 2014
The House met at half-past Eleven o’clock
Prayers
[Mr Speaker in the Chair]
Speaker’s Statement
Mr Speaker: Before I call Alec Shelbrooke, I wish to inform the House how I will be applying its sub judice rules to any exchanges on Mr Coulson’s case. I ask the House for some forbearance, as it is important to Members and those outside the House that the position is clear. The House will know that Mr Coulson has now been convicted on a charge of conspiracy to intercept communications. The court has not yet sentenced Mr Coulson for that offence. There has as yet been no verdict on two charges against him of conspiracy to commit misconduct in public office. The rules of the House’s sub judice resolution, which the House rightly expects me to enforce, apply to criminal cases which are “active”. They cease to be active when, and I quote,
“they are concluded by verdict and sentence”,
At the same time, the House’s resolution gives the Chair discretion in applying the rules. I have taken appropriate advice, as the House would expect—and, indeed, been in receipt of unsolicited advice, for which I am of course grateful. In the light of all the circumstances, I have decided, one, to allow reference to Mr Coulson’s conviction; two, not to allow reference to his sentencing by the court, such as speculation on the nature of that sentence; and three, not to allow reference to those charges on which the verdict is awaited. I rely on hon. Members to exercise restraint, but if that proves unavailing, I will of course intervene. I hope that is helpful to the House.
Oral Answers to Questions
Cabinet Office
The Minister for the Cabinet Office was asked—
Trade Union Facility Time
1. Alec Shelbrooke (Elmet and Rothwell) (Con): What recent progress he has made on reform of trades union facility time in Government Departments. [904453]
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude): Mr Speaker, with permission I will take questions 1 and 10 together.
At the time of the last general election, there was no monitoring of taxpayer-funded trade union facility time in the civil service. We now have controls in place that saved £19 million last year, and we have already reduced
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the number of taxpayer-funded full-time union officials from 200 in May 2010 down to around a dozen this month.
Mr Speaker: I allowed the right hon. Gentleman to continue his answer, but my office advises me that it has not been notified of the grouping to which he refers. It might have been the intention, but my office indicates that it has not been notified of it, which obviously it should have been.
Alec Shelbrooke: In the past, Departments gave paid time off for union conferences. Can my right hon. Friend confirm that this Government will not be spending taxpayers’ money packing civil servants off to the seaside?
Mr Maude: Under the rules that operated under the last Government, it was absolutely the case that thousands of union officials, paid for by the taxpayer as civil servants, were given paid time off—sometimes, extraordinarily, with paid travel and expenses—to attend union conferences at the seaside. We have stopped this. They can take unpaid time off to attend conferences, and any decision to award paid time off is entirely at the discretion of the Minister in charge of that civil servant’s Department.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): Will the right hon. Gentleman ensure that the guidelines will allow those people responsible to the Home Office for the efficient administration of passport services to be involved in the consultation to find a solution to the crisis, given that they predicted it in the first place?
Mr Maude: It remains and has always been the case that union officials are entitled to paid time off to pursue their union duties, as opposed to activities. If those discussions are in pursuit of their duties because they relate to particular employment issues, that will of course continue to be the case.
10. [904463] David Morris (Morecambe and Lunesdale) (Con): What has my right hon. Friend put in place to monitor and indeed limit the facilities provided to trade unions at taxpayers’ expense within the civil service?
Mr Maude: Again, there were no arrangements at all to monitor what facilities were being made available to union officials at taxpayers’ expense. We have now put in place arrangements to try to find out exactly what is going on, but I regret to say that the data are not yet complete. However, we will continue to pursue this.
Jonathan Ashworth (Leicester South) (Lab): The Paymaster General will of course be aware that many private sector employers, such as Rolls-Royce, Jaguar Land Rover and Airbus, all take advantage of facility time, because they know it helps with workplace relations and with their obligations to consult. The private sector can recognise the benefits of facility time, so rather than knocking facility time in the public sector, why can he not recognise its benefits for that sector?
Mr Maude:
I do recognise the benefits, which is why—even if we wanted to, which we do not—we are not proposing to get rid of it altogether. All we are saying is that it should be in accordance with the law and the obligations that the statute places on us as
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employers. I am the first to recognise that there are often advantages in being able to resolve disputes quickly and locally before they escalate, which is why some facility time will continue to be available.
Departmental Efficiency
2. Nick Smith (Blaenau Gwent) (Lab): What recent progress he has made on the Government’s efficiency agenda. [904454]
5. Henry Smith (Crawley) (Con): What progress he has made on his programme of savings through efficiency and reform of central Government. [904457]
7. Charlie Elphicke (Dover) (Con): What estimate he has made of the savings arising from measures to increase departmental efficiency; and if he will make a statement. [904460]
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude): On 10 June, my right hon. Friend the Chancellor and I announced savings through efficiency reform of central Government of £14.3 billion for 2013-14, against a 2009-10 baseline. Those savings are both recurring and non-recurring items, and include £5.4 billion from procurement and commercial savings, £3.3 billion in project savings and £4.7 billion from work force reform and pension savings.
Nick Smith: The Government have said that they want to move jobs out of Whitehall and into areas such as south Wales, but in August 1,000 jobs could be offshored, perhaps to India, from the Ministry of Justice shared services centre in Newport. Will the Minister look at this again?
Mr Maude: Earlier this week, the MOJ announced its plans to take forward the agreed plans on shared services, which were first put forward under the Labour Government in 2004 but did not begin to be implemented until 2012. There are major efficiency savings to be made. I am sure that SSCL—Shared Services Connected Ltd—the shared service company the MOJ proposes to use, will look carefully at all the facilities and will want to concentrate activity at the most effective and efficient ones, and I see absolutely no reason why Newport’s should not be among those.
Henry Smith: I am grateful to my right hon. Friend for his answer and for the significant amounts of taxpayer money that the Cabinet Office is saving. What role can greater digitisation play in obtaining further efficiencies?
Mr Maude: Moving public services online has a major part to play, both in making services more convenient and designed around the needs of the user rather than the convenience of the Government, and in making major savings. Typically, the cost of an online transaction is about one fiftieth of the cost of the transaction being done face to face, but for those people who are not online there will always be an assisted digital option.
Charlie Elphicke: Does the size of the savings being made not highlight the truly galactic waste of money by the previous Labour Government? Will my right hon. Friend set out his vision for further savings in the future?
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Mr Maude: No good organisation gives up on pursuing efficiency savings year after year. The Office for National Statistics has shown that in the public sector productivity remained static during the Labour years while it rose by nearly 30% in the private services sector. If productivity had risen by the same amount in the public sector, the budget deficit that the coalition Government inherited could have been many, many tens of billions of pounds lower.
Jessica Morden (Newport East) (Lab): I want the Minister to understand just how fearful and uncertain staff at the MOJ shared services centre in Newport feel after this week’s announcement of privatisation. How can he justify the hypocrisy of the Prime Minister talking about the UK becoming an onshoring nation when under this contract jobs could be offshored? What guarantees are the Government offering that these jobs could stay in Newport?
Mr Speaker: Order. Before the Minister answers, the hon. Lady must withdraw the use of the word “hypocrisy”, as it relates to an individual Minister.
Jessica Morden: I withdraw it.
Mr Speaker: I am grateful to the hon. Lady.
Mr Maude: The hon. Lady is making assumptions about what will happen to those jobs which I have no reason to believe are justified. If the quality of the work and the efficiency at Newport is as good as she believes, I am sure that the management of SSCL will want to look carefully at retaining jobs there.
Mr Philip Hollobone (Kettering) (Con): Which part of which Department has provided the most fertile ground for efficiency savings?
Mr Maude: That is a very good question, but if I were to go through that in elaborate detail, you would cut me short, Mr Speaker. There are opportunities for efficiency savings right across Government and the public sector. We have made significant progress, but, as my hon. Friend would expect, there is considerably more that can and should be done.
Keith Vaz (Leicester East) (Lab): Serco had to repay £68 million and G4S £104 million because they overcharged the Ministry of Justice. Why are they still receiving contracts when they have obviously been very good at efficiently taking money off the taxpayer?
Mr Maude: The practices to which the right hon. Gentleman refers date from contracts let by the previous Government, and those malpractices had been going on for many years. It is because the quality of contract management in Government is at last beginning to improve that those malpractices came to light at all. Therefore, the taxpayer was able to be recompensed for the money that had been wrongly pumped out of the door during that time. We are making progress on this, but again there is more to be done.
Chi Onwurah (Newcastle upon Tyne Central) (Lab):
The Minister boasts that his efficiency agenda is cutting hundreds of millions of pounds from Government IT
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spend, but figures that we have seen show that IT spend is flat overall, and has in his Department and others, including the universal credit maxed out Department for Work and Pensions, risen massively between 30% and 70%. Will the Minister confirm that IT spend is not falling, and accept that it is his lack of leadership in allowing continuing turf wars between the Department for Business, Innovation and Skills, the Cabinet Office and DWP that is preventing the IT transformation that we need?
Mr Maude: The hon. Lady is completely right that we need an ICT transformation. What we inherited—the legacy—was a series of extremely expensive, opaque IT contracts. The Government did not even know what they were getting for what they were spending. We need to reform that. We must wait for some of these contracts, which were excessively long, to come to an end. That process is beginning. The British Government were spending more on IT per capita than any other Government in the world, yet our rankings, until recently, were falling. There is much to be done, but she is in no position from where she sits to be lecturing this Government, who are grappling with the issue.
Government Statistics
3. Kelvin Hopkins (Luton North) (Lab): What steps he is taking to ensure the accuracy of Government statistics. [904455]
The Minister for Civil Society (Mr Nick Hurd): The UK Statistics Authority was established to promote and safeguard official statistics for the public good. As the hon. Gentleman knows, it is an independent body directly accountable to Parliament, and it is responsible for assessing and monitoring the accuracy of Government statistics against the code of practice for official statistics.
Kelvin Hopkins: Estimates by the TUC and others of uncollected taxes—the so-called tax gap—are some three times higher than those figures given by Her Majesty’s Revenue and Customs and the Government. Are the Government simply massaging those figures downwards to disguise how appalling they really are?
Mr Hurd: I would like to think that this Government, unlike the previous one, are not in the business of massaging statistics. The central point is that we now have, as a result of the lack of credibility of statistics under the previous Government, the official UK Statistics Authority, which does an excellent job in safeguarding the integrity of public statistics.
Duncan Hames (Chippenham) (LD): The Nomis website publishes estimates of unemployment by constituency using the annual population survey, which itself uses a sample of under 300 people of working age per constituency. Does the Minister agree that it is incumbent on the publishers of local statistics based on national surveys to assist the users of those statistics in understanding the confidence intervals, which can swamp tiny sample sizes?
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Union Subscriptions
4. Mr Nicholas Brown (Newcastle upon Tyne East) (Lab): Which Departments have responded to his cross-departmental review of check-off deductions of union subscriptions. [904456]
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude): We have asked Departments to review their own arrangements. The civil service management code requires Departments to recover the cost of the provision of this service, but most do not do so. These reviews, therefore, are very timely.
Mr Brown: A number of Secretaries of State have already rejected the idea. The only one to take it forward ended up in court. They lost and had costs found against the Government. There is no public interest or cost saving in what the right hon. Gentleman is doing, so why does he persist in attacking the Government’s own employees for trying to act in combination by joining a trade union?
Mr Maude: This is in no sense an attack on membership of trade unions. [Hon. Members: “Yes, it is.”] We can see who speaks for the trade unions and for their paymasters. The right hon. Gentleman ought to know better, from his experience. Why is it that many trade unions do not rely on check-off at all but use the modern means of connection with their members of direct debit, which is available to all?
Youth Services
6. Pat Glass (North West Durham) (Lab): What steps he is taking to maintain the level of youth services provision. [904458]
9. Mike Kane (Wythenshawe and Sale East) (Lab): What steps he is taking to maintain the level of youth services provision. [904462]
The Minister for Civil Society (Mr Nick Hurd): We are supporting the voluntary sector in offering new opportunities for young people through programmes such as the National Citizen Service. In addition, we will be offering practical support to local authorities who want to deliver high-quality new services in an innovative way, for example by access to our £10 million support programme for mutuals.
Pat Glass: Youth services have largely disappeared under this Government and have been replaced by the National Citizen Service, which, despite the accolades that it receives in the House from Ministers, is turning into little more than an extra six weeks’ holiday for students and young people who really do not need it. What are the Government doing about youth services for the most vulnerable and those at greatest risk?
Mr Hurd: I am afraid that the hon. Lady is talking rubbish about the National Citizen Service. I refer her to the independent research which shows exactly the benefits that it gives to young people, which is why more and more of them are signing up to take part in it. She is right that it has been too easy to cut youth services at local level. There are no easy choices, but we are actively working with local authorities who want to commission in innovative ways to help them to deliver better with less.
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Mike Kane: The BBC has revealed that in real terms the amount spent on youth services has fallen by 36% in the past two years. Does the Minister agree with Fiona Blacke, the chief executive of the National Youth Agency, that in the areas with the greatest cuts, the opportunities for young people are being significantly diminished?
Mr Hurd: The Labour party continues to be in denial about why there were cuts in the first place. I have said very publicly that we are concerned that youth services have been too easy to cut, in part because there is insufficient evidence about the value of the work that they do in terms of outcomes. We want to work with commissioners to change that, but at the same time we are actively investing from the centre to create new opportunities for young people, not just through the NCS but by backing the scouts and other uniformed organisations and the organisations that have formed part of the Step Up to Serve campaign.
Sir Alan Beith (Berwick-upon-Tweed) (LD): Does my hon. Friend accept that well-directed youth work is a vital part of crime prevention and as such saves money and prevents victimisation in the long run?
Mr Hurd: I agree wholeheartedly. The Government are a strong supporter of the value of high-quality, well-structured youth services, which is why we are working with local authorities to help in their difficult task of delivering more with less, as well as supporting the voluntary sector to offer more opportunities for young people to develop.
13. [904466] Jason McCartney (Colne Valley) (Con): Hundreds of young people in my constituency have enjoyed the team spirit, camaraderie and community projects that the National Citizen Service brings. Will the Minister assure the House that even more NCS programmes will be rolled out this summer?
Mr Hurd: Yes, because young people want them. This summer the 100,000th young person will take part in NCS; 98% of young people would recommend it to their friends. There is a fantastic buzz around it because young people recognise that it is a fantastic use of their time and they get so much out of it.
Social Enterprises
8. Jeremy Lefroy (Stafford) (Con): What recent progress his Department has made on supporting social enterprises. [904461]
The Minister for Civil Society (Mr Nick Hurd): We are doing a great deal to support the growth of social enterprises. We are making it easier for them to access finance through social investment and to deliver public services through the Public Services (Social Value) Act 2012, and through a wide range of capacity-building support.
Jeremy Lefroy: Will my right hon. Friend update the House on the progress of Big Society Capital, in particular the provision of capital to smaller, local community social enterprises, which may need thousands or tens of thousands rather than millions?
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Mr Hurd: Big Society Capital is the first institution of its kind in the world and I am delighted to say that it is working very well. Its recent annual report shows that it has already made £150 million of new money available to social enterprises through 31 different investments.
Topical Questions
T1. [904443] Peter Aldous (Waveney) (Con): If he will make a statement on his departmental responsibilities.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude): My responsibilities are for efficiency and reform, civil service issues, public sector industrial relations strategy, Government transparency, civil contingency, civil society and cyber-security.
Peter Aldous: In March my right hon. Friend visited East Coast Community Healthcare, a staff-owned social enterprise providing community-based NHS and social care in my constituency. At present it is disadvantaged by having to pay more for insurance and IT than if it had remained in the NHS. Can my right hon. Friend give me an assurance that the Government will work with social enterprises such as ECCH to address such obstacles to their long-term success?
Mr Maude: I will certainly talk to my right hon. Friend the Health Secretary about that issue, but my hon. Friend will have seen, as I did when we visited that public service mutual, the extraordinary level of enthusiasm, commitment and dedication which, having spun out of the NHS to be a staff-owned mutual, was invested in their activity.
Michael Dugher (Barnsley East) (Lab): An excellent report published last week by the Centre for Regional Economic and Social Research at Sheffield Hallam university on the state of the coalfields confirmed that the most deprived areas of the country have the lowest concentration of voluntary sector organisations. On top of that, we know that local authorities in those same areas are suffering disproportionate cuts—a double whammy for the poorest parts of the country. Why are the Government not doing enough specifically to help the voluntary sector in the poorest parts of the country?
The Minister for Civil Society (Mr Nick Hurd): Well, we are. We set up a programme, Community First, which is delivering neighbourhood grants in the 600 most deprived wards in the country. We have also worked closely with the National Council for Voluntary Organisations and the Big Lottery Fund to use the European funding structures to unlock £500 million-worth of funding for social inclusion in some of the most deprived communities in the country. I hope that the hon. Gentleman will welcome that.
T2. [904444] Stephen Metcalfe (South Basildon and East Thurrock) (Con): I welcome the work that this Government have done to encourage volunteering, especially through the Points of Light programme. When will my constituents, who work so hard, be recognised through this programme?
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Mr Hurd: With more and more people volunteering, it is right that we should do more to recognise and celebrate their great work. Points of Light is a new daily award from the Prime Minister. Today he is announcing the 50th winner. I would welcome recommendations from all constituencies, including South Basildon and East Thurrock.
T3. [904445] Dan Jarvis (Barnsley Central) (Lab): City Year recruits 18 to 25-year-olds to volunteer as mentors and tutors in schools in deprived areas. They have a proven track record of tackling educational under-attainment and developing young people to become more employable and more engaged citizens. Will the Minister consider recognising a full-time year of voluntary service as a new pathway for young people, as a transition between education and employment, by giving it a status that will ensure that young people have confidence that their commitment is publicly recognised?
Mr Hurd: Like many Members across the House, I am a huge supporter of City Year. The Cabinet Office has backed it with a substantial grant and it is part of a wider coalition of organisations that got together to structure the Step Up to Serve campaign, which is supported by all three party leaders and led by the Prince of Wales and which aims to double the number of young people involved in volunteering. I hope the hon. Gentleman can welcome that.
T4. [904446] Julian Smith (Skipton and Ripon) (Con): As part of their long-term economic plan, this Government have saved £1.2 billion by rationalising the Government estate. That is the equivalent of 26 Buckingham palaces. What more can be done by local councils and local authorities to replicate such savings?
Mr Maude: We have already done a great deal on this front, as my hon. Friend recognises, but there is much more that can be done to collocate different public sector agencies, including local government. That not only saves a lot of money by sharing the overhead, but provides a much more convenient place for the citizen and businesses to interact with the state in its different forms.
T5. [904447] Mr Jim Cunningham (Coventry South) (Lab): The Government agreed to refund the Big Lottery Fund the £675 million taken for the Olympics. With the sales of the Olympic assets, is that still going ahead? How will the lottery be refunded if Olympic assets are leased instead of sold?
Mr Speaker: If the Minister heard that, I congratulate him on his hearing. The acoustics were not great.
Mr Maude: I heard some of it, Mr Speaker—enough to know that the right thing for me to do is to write to the hon. Gentleman with a detailed answer.
Mr Speaker: Before I call Mr Damian Collins at the start of questions to the Prime Minister, I wish to inform the House how I will be applying its sub judice rules to any exchanges on Mr Coulson’s case. I ask the House for some forbearance, as it is important to Members and those outside the House that the position is clear.
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The House will know that Mr Coulson has now been convicted on a charge of conspiracy to intercept communications. The court has not yet sentenced Mr Coulson for that offence. There has as yet been no verdict on two charges against him of conspiracy to commit misconduct in public office. The rules of the House’s sub judice resolution, which the House rightly expects me to enforce, apply to criminal cases which are active. They cease to be active when
“they are concluded by verdict and sentence”,
At the same time, the House’s resolution gives the Chair discretion in applying the rules. I have taken appropriate advice, as the House would expect—and, indeed, been in receipt of unsolicited advice, for which I am of course grateful. In the light of all the circumstances, I have decided, one, to allow reference to Mr Coulson’s conviction; two, not to allow reference to his sentencing by the court, such as speculation on the nature of that sentence; and three, not to allow reference to those charges on which the verdict is awaited. I rely upon hon. Members to exercise restraint, but if that proves unavailing, I will of course intervene. I hope that that is helpful to the House.
Prime Minister
The Prime Minister was asked—
Engagements
Q1. [904428] Damian Collins (Folkestone and Hythe) (Con): If he will list his official engagements for Wednesday 25 June.
The Prime Minister (Mr David Cameron): This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.
Damian Collins: Andy Coulson’s conviction shows that the parliamentary inquiry into phone hacking, of which I was a member, was consistently misled by him and others over the extent of, and knowledge of, phone hacking at News International. Does the Prime Minister agree with me that our first concern should be to see redress for the victims of phone hacking and to uphold the democratic principle of a free press?
The Prime Minister:
My hon. Friend is absolutely right. The first thing is that we should remember the victims, people who had their privacy wrecked, and we should ensure that that cannot happen again. As we do so, we must, as he says, cherish a free and vibrant press in our country. I said yesterday, and I say again today, that I take full responsibility for employing Andy Coulson. I did so on the basis of assurances that I received and that the Select Committee also received, but I always said that if those assurances turned out to be wrong, I would apologise fully and frankly to this House of Commons, and I do so again today from this Dispatch Box. I am sorry; this was the wrong decision, but I think it is right that we have had a public inquiry in this
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country, and it is right that we have proper investigations. Yesterday once again showed that no one is above the law in our country.
Edward Miliband (Doncaster North) (Lab): Today we know that for four years the Prime Minister’s hand-picked, closest adviser was a criminal, and brought disgrace to Downing street. We now also know that the Prime Minister wilfully ignored multiple warnings about him. On 8 July 2009, The Guardian published evidence of phone hacking on an industrial scale while Andy Coulson was editor of the News of the World. At that time, Andy Coulson was his director of communications. What action did he take?
The Prime Minister: As I said a moment ago, the assurances I sought and received were the same assurances received by the Press Complaints Commission, by a Select Committee of this House, and by police investigations. They were also thoroughly gone into by the Leveson inquiry—an inquiry the right hon. Gentleman supported. He talks about warnings. Specifically on the warning from The Guardian, Leveson had this to say:
“The editor of the Guardian did not raise the issue with Mr Cameron at meetings both in the month after the article was published and the following year.”
He says this—[Interruption.] Hon. Members will want to hear it:
“there can be no criticism of Mr Cameron for not raising the issue”.
We had an exhaustive inquiry. I know the right hon. Gentleman did not like the result of the inquiry, but he should accept it.
Edward Miliband: That is a long-winded way of saying that, when it came to Andy Coulson, the Prime Minister just did not want to know the evidence. First warning: ignored.
Let us move on to May 2010. The Deputy Prime Minister warned the Prime Minister in person about his deep concerns about Andy Coulson. So he was warned by his deputy. What action did he take?
The Prime Minister: Every single one of these issues was dealt with by the Leveson inquiry. [Interruption.]
Mr Speaker: Order. Mr Lucas, calm yourself. I am trying to offer you, on a weekly basis, therapeutic guidance, but there is a long way to go. There needs to be calm on both sides of the House.
The Prime Minister: Every single one of these issues was dealt with exhaustively by the Leveson inquiry. The terms of reference of the Leveson inquiry were agreed by the right hon. Gentleman, and they included
“the extent to which there was a failure to act on previous warnings about media misconduct”.
That is what Leveson looked into. He looked into all of these questions about the warnings I was given and the response I gave, and he made no criticism of my conduct. I know that the right hon. Gentleman was disappointed by the Leveson inquiry, but he called for it, it took place, and he should heed what it said.
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Edward Miliband: No, this is about the Prime Minister’s character, his judgment, and the warnings he ignored, including from the Deputy Prime Minister. Warning No. 2: ignored.
Then, in September 2010, The New York Times published a front-page investigation detailing Andy Coulson’s extensive knowledge of phone hacking, which included one former editor saying:
“I’ve been to dozens if not hundreds of meetings with Andy”
when the subject came up. What action did the Prime Minister take?
The Prime Minister: All of these issues—every single warning—were dealt with by the Leveson inquiry: an inquiry the right hon. Gentleman called for and an inquiry whose terms of reference he agreed. I know he cannot bear it, but Leveson made no criticism of my conduct in this regard whatsoever. You cannot call for a judge-led inquiry, participate in a judge-led inquiry, write the terms of reference of a judge-led inquiry, and then ignore what it has to say. I have to say, Mr Speaker, that all of the questions he is raising today are not new; they are the questions dealt with by the Leveson inquiry. I know—[Interruption.]
Mr Speaker: Order. The Prime Minister is offering an answer and it must be heard. [Interruption.] Order. It must be heard by the House. Both sides must be heard by the House, and that will happen, as it always does, however long this session has to run—about that, let us be absolutely clear.
The Prime Minister: I can quite understand why the right hon. Gentleman does not want to listen to an eight-month-long inquiry that cost £5 million, that interviewed people under oath, and that was led by a judge, but that is what he asked for, that is what was delivered, and it did not criticise my conduct in this regard at all. Instead of casting aspersions about that, he should accept the inquiry that he supported.
Edward Miliband: No answer—[Interruption.] No answer on any of the questions. No answer on why he did not act on The Guardian; no answer on why he did not act on the Deputy Prime Minister; no answer on why he did not act on The New York Times.
Let us come to the issue of vetting. Amid all those warnings, the very least he should have—[Interruption.]
Mr Speaker: Order. I apologise for interrupting the right hon. Gentleman, but there is the usual ranting from the usual suspects. Be quiet, or if you cannot be quiet, and you have not got that level of self-restraint, leave the Chamber—we can perfectly well manage without you.
Edward Miliband: Let us come to the issue of vetting. Amid all those warnings, the very least that the Prime Minister should have done was insist immediately on coming to office that Andy Coulson should have the highest level of security vetting, as his six predecessors over the previous 14 years had had. Why did he not insist on that?
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The Prime Minister: Again, Leveson, in his inquiry, looked directly into that issue. This is what he found—[Interruption.] He concluded:
“The level of security clearance was not the decision of either Mr Cameron or Mr Coulson but the Civil Service.”
Those are the correct procedures. If the Leader of the Opposition’s contention is that direct vetting would have got to the bottom of Mr Coulson’s conduct at the News of the World, he should be very clear about what Leveson found. He found that
“the process of considering Mr Coulson for DV status would not have involved a detailed investigation of phone hacking at the NoTW”.
That undermines the entire case that Labour has been trying to make all morning. I know that the right hon. Gentleman does not agree with it. I know that he is so desperate not to talk about the economy, not to talk about unemployment, not to talk about the deficit, but he cannot rerun an inquiry that has already taken place.
Edward Miliband: Now it is clear from the Prime Minister—[Hon. Members: “Weak!] I will tell them what is weak: failing to stand up for doing the right thing, and that is what this Prime Minister has done. Now we know the rule of this Prime Minister: the buck does not stop here, and he blames the civil service. On the civil service—[Interruption.]
Mr Speaker: Order. Sometimes one has to repeat a thing because people do not get it the first time. If there is quiet, we will continue. If people try to shout other people down, against the principles of British democracy, they will be stopped in their tracks. It is very simple and, I would have thought, pretty clear.
Edward Miliband: On the civil service, can the Prime Minister assure the House that at no time did Sir Gus O’Donnell, the then Cabinet Secretary, or any senior civil servant raise concerns with him or his office about hiring Andy Coulson?
The Prime Minister: Gus O’Donnell made that very clear in the evidence he gave the inquiry. Indeed, on the issue of vetting, he was absolutely clear that the decision about vetting is for the permanent secretary at No. 10, Sir Jeremy Heywood, someone who has served Labour Governments with impeccable service as well as a coalition Government led by a Conservative Prime Minister. What the right hon. Gentleman is trying to do is go through all the old questions that were answered by the Leveson inquiry. He did not like the answer, because he wanted to try to prove some cooked-up conspiracy between the Conservatives and News International. He cannot manage to do it, because the Leveson inquiry cannot find it. He asked a minute ago what is weak. I will tell him what is weak: attacking Murdoch and then standing up with a copy of TheSun newspaper, only to apologise a few hours later.
Edward Miliband:
The Prime Minister said in his previous answer that Sir Gus O’Donnell was asked whether he raised concerns with him or his office about Andy Coulson. He was not asked that question at the Leveson inquiry. There is now a very important question, which the whole country will want an answer to, about
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whether Sir Gus O’Donnell or senior civil servants raised concerns with the Prime Minister or his office about Andy Coulson.
The truth about this is that the charge against the Prime Minister is not one of ignorance; it is wilful negligence. At the heart of this scandal are thousands of innocent victims of phone hacking that he did not stand up for. The Prime Minister will always be remembered as the first ever occupant of his office who brought a criminal into the heart of Downing street.
The Prime Minister: The right hon. Gentleman brought up the warning from The Guardian. I totally disproved him using the evidence. He brought up the idea of direct vetting. I have totally disproved him using the evidence. He cannot bear the fact that an eight-month inquiry which he hoped would pin the blame on me found that I had behaved correctly throughout. That is the case. All these issues were examined by the Leveson inquiry. If the right hon. Gentleman wants to debate the calls we make and the leadership we give, I am happy to do so anytime, because it is leadership that has got this economy moving, it is leadership that has got our deficit down, it is leadership that is putting Britain back to work, and it is the total absence of leadership from the Labour party that shows that it has nothing to say about Britain’s economic future.
Mr Speaker: Jake Berry—not here.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): After many months of vehement anti-Iranian rhetoric from the Government and now the sudden change of heart, does the Prime Minister believe that the maxim “My enemy’s enemy is my friend” trumps all else?
The Prime Minister: No, I do not believe that. I think we should judge every regime and every organisation on its commitment to human rights, the rule of law and building pluralistic societies. We should engage with the Iranians but, as I have said, with a very clear eye and a very hard heart. We should not forget what happened to our embassy or the things that they are responsible for around the world, but we should start to build a dialogue with them in the way the Foreign Secretary has set out.
Q3. [904430] Mr Nigel Evans (Ribble Valley) (Con): On Friday, my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) and I jumped from a plane 13,000 feet over the Yorkshire countryside—fortunately, we had parachutes and training from the Army’s Tigers parachute display team. As we approach armed forces day, will the Prime Minister pay tribute to our armed forces, and to the charities and the generous British people who do so much to support those who give such commitment to Queen and country, and will he reinforce the fact that this Parliament will never, ever underestimate the contribution of the armed forces of this country?
The Prime Minister:
I absolutely support what my hon. Friend has said and commend him for jumping out of an aeroplane with a parachute. Not only should we commend our armed forces, but it is right that we have put the armed forces covenant—the military covenant—into the law of the land. Armed forces day is now an important part of our national character. On
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Remembrance Sunday, we remember those who have served and those who have fallen, but armed forces day is an opportunity to celebrate all those who serve today, to thank them and their families, and to celebrate the values they live by and all they bring to our country.
Q4. [904431] Mr Ronnie Campbell (Blyth Valley) (Lab): Does the Prime Minister realise he has made history by employing a crook at No. 10?
The Prime Minister: I have given a very full answer to this. Obviously, I regret the decision to employ Andy Coulson on the basis of the assurances I was given, but what I would say is that no one made any complaints about the conduct of Andy Coulson while he was at No. 10. That stands in quite a contrast to the conduct of Damian McBride, Jo Moore and Alastair Campbell. What we had from the previous Government were dodgy dossiers, burying bad news and smearing Members of Parliament.
Sir Nick Harvey (North Devon) (LD): The firefighters’ dispute continues, with some worrying consequences and no sign at present of a resolution. Before Easter, Ministers at the Department for Communities and Local Government got the Government Actuary’s Department to cost a set of proposals that the Fire Brigades Union was ready to put to its members. Will the Prime Minister look back at that proposal even now, and consider whether it might still have a useful part to play in bringing an end to this dispute?
The Prime Minister: I am very happy to look at what my hon. Friend suggests. I know that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), has been working extremely hard on this issue. I think it is important that we listen to what the firefighters say but at the same time recognise that the pensions they have access to would require the building of a £500,000 pot for anyone else in our country. We should bear that and the taxpayers’ contribution in mind.
Q5. [904432] Mark Durkan (Foyle) (SDLP): Does the Prime Minister accept that his death at 60 proves that Gerry Conlon lost more than 15 terrible years in prison, and the anguish of his father’s torment, owing to the injustice from layers of this state? As well as his wider campaigning against injustice, there were two particular issues that mattered to Gerry in recent years. One was the need for proper, quality mental health services for those who suffered miscarriages of justice. Secondly—I would like the Prime Minister to address this in particular—notwithstanding the egregious 75-year seal put on the Guildford and other papers, Gerry was recently promised access to the archives at Kew and that people could accompany him. It was his dying wish that that would be honoured through the people he wanted to accompany him. Will the Prime Minister ensure that the dying wish of an innocent man is honoured?
The Prime Minister:
I am grateful to the hon. Gentleman for raising this, and for the way in which he does it. It is hard to think what 15 years in prison, when you are innocent of a crime of which you have been convicted, would do to somebody. It is absolutely right that a
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previous Prime Minister apologised as fully as he did when this came to pass. I am very happy to look at the specific request about the records at Kew, which has not been put to me before, and perhaps contact the hon. Gentleman about that it.
Mr Peter Bone (Wellingborough) (Con): Unemployment in north Northamptonshire is down by a third. Last week, this Conservative-led Government approved the Rushden Lakes development—2,000 new jobs, a major retail park and a fantastic leisure facility. Will the Prime Minister explain how we have such a success? Could it be down to his long-term economic plan?
The Prime Minister: I am grateful to my hon. Friend for detailing what is happening in Northamptonshire in terms of the extra jobs and the development. I think what it proves is that we have an entrepreneurial economy, particularly in Northamptonshire, but we need key developments to go ahead to help unlock the jobs, growth and investment that we need for our country.
Q6. [904433] Chris Bryant (Rhondda) (Lab): The Prime Minister said yesterday that he was just giving Andy Coulson a second chance. That means that the Prime Minister knew that there was a first offence. He knew from the very beginning that he was taking a criminal into Downing street, and then he refused to sack him. Yesterday—and again today—he was busy praising Andy Coulson. What message does that send to the victims? Is not the truth of the matter that the Prime Minister is only sorry because he got caught?
The Prime Minister: I am afraid that on this issue the hon. Gentleman has got it wrong time and time and time again. What I said about giving someone a second chance was because the individual in question had resigned as editor of the News of the World because of what had happened. Let me just refer the hon. Gentleman to what he said in this House of Commons. He said that there was no doubt that there was a
“deal…secured between the Conservative party and News International…before the general election”.—[Official Report, 13 November 2012; Vol. 553, c. 32WH.]
After eight months of an inquiry that cost £5 million, that was found to be complete and utter rubbish, yet have we ever heard one word of retraction from the hon. Gentleman? As ever—not a word.
Sir Gerald Howarth (Aldershot) (Con): May I congratulate my right hon. Friend on his judgment and resolution in standing up for Britain’s national interest on the question of the presidency of the EU Commission? May I put it to him that he is in tune with the concerns of the public right across Europe, unlike so many of our continental partners?
The Prime Minister:
I think it is important on this issue to stand up and speak for what you believe in. I believe that the European Commission President should be chosen by the elected Heads of Government and Heads of State on the European Council. That is the right approach, and it is wrong to sign up to this power grab by the parties of Europe and the European Parliament. I also think it is important that the people involved
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understand that we need reform in Europe. It does not matter how hard I have to push this case, I will take it all the way to the end.
Q7. [904434] Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): They have been to breakfast with Boris, to tea at No. 10 and have danced with the Business Secretary, but businesses in Shoreditch and the City still cannot get superfast broadband. This is now a national embarrassment. What is the Prime Minister going to do?
The Prime Minister: We have put a huge amount of money into expanding superfast broadband, and we are now doing better than other European countries in terms of the roll-out of our network and the speeds that are available. My right hon. Friend the Secretary of State for Culture, Media and Sport is working very hard to deal with those areas of the country that do not yet have superfast broadband, and I will make sure that he puts Hackney firmly on his list.
Philip Davies (Shipley) (Con): The Prime Minister recruited Andy Coulson in 2007. In 2009, Nick Davies of The Guardian came to the Culture, Media and Sport Select Committee and said:
“I have never seen a piece of paper that directly links Andy Coulson to any of the activity that we are discussing of either kind.”
In February 2010, the Select Committee, on which I serve, concluded, with all-party support:
“We have seen no evidence that Andy Coulson knew that phone-hacking was taking place.”
Does the Prime Minister agree that those who now claim they knew he was involved in 2007—that seems to include the current Leader of the Opposition—should explain why they did not pass on that information to the police or to the Select Committee? Or are they trying to rewrite history to deflect attention from their own chronic leadership shortcomings?
The Prime Minister: I think my hon. Friend put it rather better than I did—[Interruption.] Thank you.
Q8. [904435] David Simpson (Upper Bann) (DUP): I am sure that the Prime Minister and the whole House will join me in welcoming the successful visit by Her Majesty the Queen and the Duke of Edinburgh to Northern Ireland this week. Will the Prime Minister also join me in condemning Sinn Fein’s foolish approach to welfare reform, which, instead of protecting the vulnerable in Northern Ireland, is costing the Northern Ireland Executive £5 million per month in fines?
The Prime Minister: I agree with the hon. Gentleman on both counts. As ever, the Queen’s visit to Northern Ireland has been a huge success, and it has highlighted the economic renaissance that is taking place there. With over 800 foreign investors, Northern Ireland is now one of the top UK destinations for investment. May I just say that I am extremely envious of Her Majesty’s being able to see the iron throne on the set of “Game of Thrones”? That is now one of the most successful television productions anywhere in the world, and it is hosted in Northern Ireland.
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The hon. Gentleman is also right about welfare reform. The point of it is to help people to get back to work, rather than just to cut budgets, and we need to explain to all the parties in Northern Ireland that we should be engaging in welfare reform to help to get people back to work.
Q9. [904436] Guy Opperman (Hexham) (Con): On this side of the House, we have a long-term economic plan, with education funding at its heart and as a consequence. This can be seen in the enhanced £269 per pupil funding that all schools in Northumberland will receive next April. Does the Prime Minister agree that we need to continue to make progress on education funding, so that as the plan takes effect we get fairer funding for all the schools in this country?
The Prime Minister: My hon. Friend is absolutely right to say that education and better schools and skills are at the heart of our long-term economic plan. He should note that we are spending £18 billion on school buildings during this Parliament, which is more than Labour spent in its first two terms combined. Specifically on the issue of a fair national funding formula, we have made some progress by allocating £350 million to the least fairly funded local authorities. That will make a real difference in the coming year.
Jim McGovern (Dundee West) (Lab): On Monday morning, before boarding the 9 o’clock train from Dundee to London, I joined a picket line with members of the Public and Commercial Services Union. They were protesting against the closure of Her Majesty’s Revenue and Customs offices in Dundee and trying to protect their terms and conditions. Their main concern, however, was that they believed there to be a Government plan for the privatisation of HMRC. Will the Prime Minister assure those members that there will be no such plans on his watch?
The Prime Minister: The plan we have for HMRC is to make it more efficient and more effective at collecting taxes from the people who should be paying them. That is the plan.
Q10. [904437] Andrew Stephenson (Pendle) (Con): On Sunday, 17-year-old James Goodship tragically drowned in Lake Burwain in my constituency. His death has left his family and friends, and the local community, in shock. As this week is drowning prevention week, what can the Prime Minister do to raise awareness of the dangers of open water and to improve water safety, particularly during this warm summer?
The Prime Minister: My heart goes out to the family that my hon. Friend has mentioned, and he is absolutely right to raise this issue. For anyone to lose a son in such a tragic way is absolutely heartbreaking. We need to spread better information about the dangers of swimming in open water. We also need to do more to teach swimming and life-saving skills in schools. I also think that the heroism Bill that we are bringing forward—which will help people who want to do good and rescue people—will help, in a small way, as well.
Hazel Blears (Salford and Eccles) (Lab):
Hundreds of young British men and some women are fighting in Syria and now with ISIS in Iraq. Some of them will come back to the United Kingdom trained, radicalised and ready to attack. Our Prevent programme has been
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cut by £17 million, and the funding for local authorities to do the essential long-term community work has all but disappeared. Will the Prime Minister undertake an urgent review of the Prevent strategy to make sure that we have the plans and the resources to protect our young people from the extremists?
The Prime Minister: I have great respect for the right hon. Lady on this issue, because she has always spoken clearly about the need to confront not just violent extremism but all forms of extremism. This Government have made sure that the Prevent programme is properly focused and works to target those at most risk of being radicalised. As well as doing that, we need to make sure that we shift resources in our intelligence, security and policing services to target those who are potentially returning from Syria or Iraq so that they are properly covered and dealt with. We have made a large number of arrests and we have confiscated passports. We have taken all the action necessary to keep our country safe.
Q11. [904438] Annette Brooke (Mid Dorset and North Poole) (LD): Julia’s House, a wonderful children’s hospice in my constituency, is currently carrying out research with Bournemouth university into the impact of short breaks on family relationships. Will the Prime Minister give higher priority to the funding of short breaks as an invest-to-save measure?
The Prime Minister: I absolutely agree with my hon. Friend about this issue. Any family bringing up a severely disabled child knows that finding one of these hospices—I will never forget finding Helen House in Oxford, which was actually the first children’s hospice, I think, anywhere in the country—is a complete life saver as they carry out brilliant, brilliant work. That is why we have committed over £800 million for local authorities to invest in short breaks for disabled children, and I am sure that this research by Bournemouth university will help inform our work in the future.
Q13. [904441] Mr Gerry Sutcliffe (Bradford South) (Lab): Is the Prime Minister aware of the alleged mis-selling of cash-back warranties by Scottish Power? Does it concern him as much as it concerns me that one of the UK’s largest utility companies has allegedly tried to evade paying back money to 625,000 people, many of whom are the poorest in our society? I wonder whether he would be prepared to meet me and a cross-party delegation to get to the truth of the matter.
The Prime Minister: I commend the hon. Gentleman for raising the issue. Of course, this took place over a decade ago and it was looked at at the time by the then Department of Trade and Industry, but in the light of the concern among members of the public about the outcome of the liquidation, I would like to encourage the hon. Gentleman to give the Business Department all the new information that has come to light, if he has not done so already, and I will fix a meeting for him with the Business Secretary and members of the all-party group so that we can try and get to the bottom of this issue.
Richard Benyon (Newbury) (Con):
My constituent Michael Butcher installed CCTV in his mother’s flat because she was a dementia sufferer, and he recorded on
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it a brutal assault on her by her carer. Unbelievably to me, the Crown Prosecution Service has refused to prosecute her carer, because it says it is not in the public interest. Does my right hon. Friend agree with me that we as a society should be totally intolerant of all attacks on vulnerable people with dementia?
The Prime Minister: It would not be right for me to comment on a CPS decision in a specific case, but on the general point about whether we should be intolerant of breaches of care against elderly people, particularly those with dementia and who are reliant on others, yes, we should. Our dementia strategy is all about not just increasing the research into trying to tackle dementia but about making sure that our care homes and hospitals and, indeed, communities become more dementia-friendly.
Q14. [904442] Yasmin Qureshi (Bolton South East) (Lab): Did Gus O’ Donnell or senior civil servants raise directly with the Prime Minister any concern they may have had about Mr Coulson?
The Prime Minister: A number of senior civil servants gave evidence to the Leveson inquiry and were closely questioned by Leveson. The whole process of the employment of Andy Coulson, his arrival in No. 10 Downing street, his vetting and the warnings that were given—each and every single one was dealt with by the investigation that the Leader of the Opposition supported, but the Leader of the Opposition cannot bear the fact that an independent, judge-led inquiry came to that conclusion. He is the first Leader of the Opposition not able to ask for an independent judicial inquiry—because he has already had one.
Richard Graham (Gloucester) (Con): Although the World cup football results may not have been quite what we wanted in England, we have the 2015 rugby world cup to look forward to. As my right hon. Friend knows, four foreign teams will be playing in Kingsholm in my constituency. Does he agree that this is a great opportunity to use the Chancellor’s new brownfield site fund, plus perhaps a new city deal from the Department for Communities and Local Government, to ensure that the regeneration of our small cities is ready for the world cup 2015?
The Prime Minister: My hon. Friend is right to say that after the disappointment of the football, and also of that stunning test match where we lost on the second last ball, it is perhaps time to look to rugby to provide us with something to lift our spirits.
Mr Speaker: Last but not least, Caroline Lucas.
Caroline Lucas (Brighton, Pavilion) (Green): In my constituency, one-third of homes are in the private rented sector. Tenants are often ripped off and forced to move at a month’s notice, and the average rent for a two-bedroom home is £1,200 a month. Will the Prime Minister back my call for a living rent commission to explore ways of bringing rents back into line with the basic cost of living?
The Prime Minister: There is a debate shortly on the private rented sector and how we get more houses and more competitive rents. Of course we want more competitive rents, but looking at the policies of the hon. Lady’s party it seems as if it would never build any houses anywhere for anyone, and as a result rents would go up.
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Point of Order
12.36 pm
Mr Robert Buckland (South Swindon) (Con): On a point of order, Mr Speaker. Is there any way that we can place on the record my understanding that the reason for the absence of my hon. Friend the Member for Rossendale and Darwen (Jake Berry) is that his wife has been rushed into hospital and he has had to attend at her bedside?
Mr Speaker: There is, and the hon. Gentleman has helpfully done just that. I thank him for that, just as I think the House will thank him. Needless to say, we wish Mr Berry’s wife a speedy recovery.
Bill presented
Small Business, Enterprise and Employment bill
Presentation and First Reading (Standing Order No. 57)
Secretary Vince Cable, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Secretary Michael Gove, Secretary Chris Grayling, Secretary Edward Davey, Mr Oliver Letwin, Andrea Leadsom, Michael Fallon, Matthew Hancock and Jenny Willott, presented a Bill to make provision about improved access to finance for businesses and individuals; to make provision about regulatory provisions relating to business and certain voluntary and community bodies; to make provision about the exercise of procurement functions by certain public authorities; to make provision for the creation of a Pubs Code and Adjudicator for the regulation of dealings by pub-owning businesses with their tied pub tenants; to make provision about the regulation of the provision of childcare; to make provision about information relating to the evaluation of education; to make provision about the regulation of companies; to make provision about company filing requirements; to make provision about the disqualification from appointments relating to companies; to make provision about insolvency; to make provision about the law relating to employment; and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 11) with explanatory notes (Bill 11-EN).
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Opposition Day
[2nd Allotted Day]
Private Rented Sector
[Relevant Documents: First Report from the Communities and Local Government Committee, Session 2013-14, on The Private Rented Sector, HC 50, and the Government’s response, Cm 8730.]
Mr Speaker: I inform the House that I have not selected the amendment in the name of the hon. Member for Brighton, Pavilion (Caroline Lucas).
12.37 pm
Emma Reynolds (Wolverhampton North East) (Lab): I beg to move,
That this House recognises the private rented sector’s growing role in meeting housing need; notes that there are nine million people, including more than one million families with more than two million children, now renting privately; notes with concern the lack of stability and certainty that the sector provides to those who rent privately; further notes the increasing cost of renting and the unreasonable letting agent fees levied on tenants; calls on the Government to bring forward legislative proposals to reform the sector by banning letting agent fees being charged to tenants and making three year tenancies the standard for those who rent their homes in the private sector; and further calls on the Government to act on unpredictable rent rises by prohibiting excessive rent rises during longer-term tenancies.
The Opposition have called this debate because we believe that the private rented sector is simply not fit for purpose—in fact, it is more suited to the 1980s than the 21st century. The sector has grown massively in size, and is beyond recognition in terms of the demographics and character of those renting from private landlords. Some 9 million people now rent privately—more than those who rent a social home. More than a third of those who rent privately are families with children, and nearly half are over 35.
Many people who are renting privately do so not out of choice but because they cannot get on the housing ladder and are being priced out, or because they cannot secure a social home. Private renting is not a cheap alternative—far from it. In fact, it is the most expensive type of tenure. On average, people renting privately spend 41% of their income on housing, compared with 30% in the social rented sector and 19% for owner-occupiers, but that extra expense is not buying greater stability or higher standards. In fact, those who rent privately are more likely to live in a non-decent home than in any other tenure. We have one of the most short-term, insecure and unstable private rented sectors in Europe.
Dr Julian Huppert (Cambridge) (LD): The hon. Lady is right to highlight the problems with the private rented sector. I presume she is aware that I tabled a private Member’s Bill on this subject last year. Does she support its contents, and can we work together to make some progress on it? Many people across the House share these concerns.
Emma Reynolds: There is cross-party concern on this issue, but the question is whether the Government are willing and able to take action; I am afraid that up until now they have not been.
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Ms Diane Abbott (Hackney North and Stoke Newington) (Lab): Is my hon. Friend aware that the issues in the private rented sector are a particular problem in London, where renters are the victims of an increasingly dysfunctional housing market and spiralling house prices and rents?
Emma Reynolds: My hon. Friend pre-empts a point I was about to make. She is absolutely right that the private rented sector is particularly problematic in high-demand areas, not only in London, but in Oxford, York and other parts of the country where demand is far outstripping supply, which is one of the reasons rents are so exorbitant.
Ian Paisley (North Antrim) (DUP): I appreciate the hon. Lady’s point, but she did not mention—inadvertently, I know—Northern Ireland, which, as I am sure she knows, particularly suffers from a lack of supply in the private rented sector.
Emma Reynolds: I thank the hon. Gentleman for reminding me of that fact.
The status quo in the private rented sector is good for neither landlords nor tenants—both parties need and deserve greater stability—but the Government do not have to travel to Venezuela or Vietnam to find a more stable, just and equitable private rented sector: 10 years ago, Ireland introduced four-year tenancies, with a ceiling on rent increases linked to average market rents. As set out in the motion, our reforms would give greater stability and peace of mind to the 9 million people renting in the private rented sector.
Sir Bob Russell (Colchester) (LD): Will the hon. Lady accept that in 13 years the last Labour Government built fewer council houses than even the Thatcher Government? One of the reasons for the housing crisis, including in the private rented sector, is that the last Labour Government did not build council houses; the coalition Government are starting to build them.
Emma Reynolds: I will take our record over the Government’s record any time. We built 2 million houses in government, 500,000 of which were affordable, and I am really proud of the decent homes programme, which transformed the council housing stock in our country, which was left in a shocking state at the end of the ’90s.
Mr Mark Prisk (Hertford and Stortford) (Con) rose—
Emma Reynolds: I want to make a bit of progress, as I know that several hon. Members want to speak in this debate, but I will give way shortly.
I shall set out the three proposals in our motion. First, we would legislate for longer-term tenancies; secondly, we would act on unpredictable rent rises; and thirdly, we would ban letting agent fees on tenants. On the first element, our motion calls on the Government to legislate to make three-year tenancies the norm. Under our proposals, tenants would have a six-month probationary period, and as long as they respected the property and paid their rent on time, they would then have the stability of the rest of that three-year period. Of course, we would build in protections for landlords—that is obviously essential—but crucially it would provide much-needed stability for private renting tenants.
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Mr Andy Slaughter (Hammersmith) (Lab): Security of tenure is crucial. Under the coalition Government, which the hon. Member for Colchester (Sir Bob Russell) supports, councils are discharging their responsibilities into the private rented sector, and tenants are regularly being evicted only because they are reliant on housing benefit and because rents are so high—in my constituency, it costs £770 a week for a three-bedroom flat—and according to the Under-Secretary of State for Communities and Local Government, the hon. Member for Keighley (Kris Hopkins), who has responsibility for housing, the fact that they are on benefits is a good reason to evict them.
Emma Reynolds: The housing Minister’s comments were absolutely appalling, and it is a shame he is not here so that we can debate them with him. It simply is not acceptable for a private landlord to evict somebody just because they are on benefits, which is why we are proposing to get rid of no-fault eviction.
Emma Reynolds: I give way to the former housing Minister.
Mr Prisk: The hon. Lady says that a Labour Government would legislate for a minimum of three years. Is she telling the House that no shorter tenancies would be allowed under a Labour Government, and if there would be exceptions, what would they be?
Emma Reynolds: The hon. Gentleman raises a key point—in fact, he has pre-empted the very next section of my speech. He is absolutely right that there would still be students and people working in different parts of the country who would want more flexibility. Our proposals do not exclude that; they include it. Essentially, however, our main message today is that whereas 20 years ago students and people moving around the country were the main groups renting privately, there is now an increasing number of people who are settling in the private sector—they can be individuals, couples or families with children. We think that the current set-up does not cater for that growing group of people within the private rented sector.
Caroline Lucas (Brighton, Pavilion) (Green): I absolutely follow the logic of what the hon. Lady is saying, so I put it to her that, following that logic still further, why have the official Opposition not adopted the position of Shelter and others that are looking for a five-year minimum tenancy along those lines?
Emma Reynolds: We are calling for a three-year tenancy. We think that we need to change the culture of short-termism that has developed around the private rented sector. We certainly draw a lot of inspiration from the excellent work done by Shelter, and many of its proposals are a feature of our proposals.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op):
I draw Members’ attention to my entry in the Register of Members’ Financial Interests. Does my hon. Friend agree that we need to encourage longer-term landlords, such as the former owners of the New Era estate in Hoxton, which has just been sold on? Tenants
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there are facing huge rent increases. Many people have lived there for over 20 years and felt that they had security, but that is no longer so certain. Does my hon. Friend thus agree that the long-term tenancies are important?
Emma Reynolds: Absolutely, which is why we would legislate for long-term tenancies. We simply do not agree with the Government that a voluntary approach is appropriate. Longer-term tenancies are simply not coming about, so the people my hon. Friend talks about face great insecurity.
Paul Uppal (Wolverhampton South West) (Con) rose—
Emma Reynolds: I will give way to my parliamentary neighbour, but then I want to make some progress.
Paul Uppal: I worked in the real estate sector for 20 years. I accept that the hon. Lady is sincere in her desire for long-term tenancies, but the way to achieve that is to bring institutional investment into housing. The last time we regulated rents to regulated tenancies, it destroyed the sector, and investment went from residential into commercial property.
Emma Reynolds: I agree with the hon. Gentleman’s first point, and Sir Michael Lyons and his housing commission are looking into that. We absolutely need institutional investment in the private rented sector— I agree on that point—but what we are suggesting, as I shall explain in more detail in my speech, is not to go back to 1970s rent control. In fact, what we are suggesting is not that different from what the Secretary of State suggested back in October, which was to have predictability in respect of rent increases. That is not to say that the market should not set the rent up front—the agreement on rent would obviously happen between the tenant and the landlord at the start of the tenancy—but at the end of years one and two, there would be an agreement—a benchmark and a ceiling—which is what happens in countries such as Ireland, Spain and elsewhere. That actually looks pretty similar to the press release put out by the Secretary of State in October, and we do not think that that would have a negative impact on supply.
Emma Reynolds: Let me make some progress; otherwise, I will be crowding out others who want to speak.
There are now 2 million children living in the private rented sector. Private tenants are nine times more likely to move than those in any other tenure. Research done by an academic, Christopher Arnold, in the black country, which, as the Minister will know, is a part of the country close to my heart, suggests that one of the main drivers of children becoming NEETs—not in education, employment or training—later in life is frequently to do with moving from house to house and from school to school during childhood. We really need greater stability for families with children.
It makes absolute sense—I hope that all Members will see this—for the default tenancy to be longer than the six to 12-month assured shorthold tenancy that is now the norm. Our proposal today is so difficult to argue against that many Government Members seem to
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have embraced the idea—well, apart from the Conservative party chairman. On hearing our proposals, his first reaction was, regrettably, to say that these proposals were “Venezuelan-style rent controls”. It seems that the right hon. Member for Welwyn Hatfield (Grant Shapps) had not spoken to his right hon. Friend the Secretary of State, who states clearly on his website that plans for longer-term tenancies
“will also give tenants the know-how to demand longer-term tenancies that cut costs and meet their needs”.
Was the Conservative party chairman suggesting that his right hon. Friend the Secretary of State had gone all the way to Venezuela to draw inspiration for the Government’s private rented sector proposals, or was he comparing his right hon. Friend to Hugo Chávez? Alternatively, the Secretary of State may have gone all the way to Venezuela to observe its bin collection regime, but perhaps that is an issue for another day.
I can only assume that, having examined our proposals in more depth, the Government realised that they were pretty similar to what they themselves had proposed, although we have also suggested that there should be legislation to back it up.
Neil Parish (Tiverton and Honiton) (Con): Will the hon. Lady give way?
Emma Reynolds: I will, but then I must make some progress.
Neil Parish: I think that longer-term tenancies are a great idea, but would it not be an even better idea to make that voluntary and allow the private sector to embrace it, thus keeping the supply of housing in the rented sector? Would that not be better than using legislation?
Emma Reynolds: It may sound like a terrific idea when the hon. Gentleman voices it in the House, but it clearly is not working. Most of the 9 million people who are renting in the private sector—including the 2 million children who are members of the families who rent—face insecurity year in, year out, not knowing whether their children will stay in the same school, or whether they will be in the same local authority area.
I was talking about Government Members. Let me complete the hat trick. During the week in which we presented our proposals, the Minister for Skills and Enterprise, the hon. Member for West Suffolk (Matthew Hancock), said on the BBC’s “Daily Politics”:
“On the rents issue, we put forward that policy at our conference last year”.
Is it not interesting that there seems to be such agreement across the House on this matter? Writing in The Spectator, the hon. Member for Rossendale and Darwen (Jake Berry), the Government’s housing adviser, called not for three-year tenancies, but for six-year tenancies. He said that the private rented sector was not fit for purpose, and was
“blocking aspiration and isolating families”.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op):
My hon. Friend has articulated very well what Labour Members feel about a Government who are quick to criticise our proposals without doing anything themselves. Does she share my concern about the fact that, although
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the Government announced last October that a model tenancy agreement would be published, we are still waiting for it nine months on?
Emma Reynolds: Indeed. I have before me a press release from the Secretary of State, which contains plenty of warm words but no action.
Let me explain further the second element of our proposals, to which there has been an hysterical reaction from, in particular, the Conservative party. I must make it clear, in order to avoid any more ridiculous misinterpretation, that the Labour party is not proposing a return to 1970s rent control. We are proposing that landlords and tenants should agree and set initial rents based on market value, and should conduct rent reviews no more often than once a year.
As Ministers will know, there are different housing markets in different parts of the country. In areas of lower demand there is not a great deal of pressure on rents, but in areas of high demand, real problems are caused by excessive rent increases. We propose that there should be an upper ceiling on any rent increases. That works well in Ireland, Spain and other parts of the world.
Jim Shannon (Strangford) (DUP): I congratulate the Opposition on raising an issue in which every Member of Parliament has an interest. In my constituency, demand greatly outstrips supply, which is leading to housing problems and problems with the allocation of housing benefit. Does the hon. Lady share my concern, and that of many people outside the House, about the fact that rent arrears are causing financial difficulties and evictions? Is it not time for us to address this issue before it becomes too difficult to do anything?
Emma Reynolds: There are problems with rent arrears, notably in the social housing sector. Many people are, for the first time in their lives, finding it difficult to pay their rent and finding themselves in arrears because of the Government’s callous bedroom tax.
Our reforms will be good for tenants, but they will also be good for landlords, and it will be essential for us to provide the right safeguards for them. The vast majority of landlords in England are small landlords with one or two properties, and they regard their extra house as a pension pot. They are interested in the increase in the value of their property over time, and in finding good tenants who pay their rent on time and treat the house like a home. We want to work with landlords to ensure that we get the balance right, but we also feel that tenants deserve extra protection and longer-term tenancies.
Meg Hillier: Will my hon. Friend give way?
Emma Reynolds: I am going to make a bit of progress, because many Members on both sides of the House rightly take an interest in this issue. I will stop talking about the Secretary of State, because he seems to be becoming slightly annoyed about it.
Let me finally deal with the third element of our proposals. We will ban the charging of letting agents’ fees to tenants. Too many letting agents charge extortionate fees every time there is a change of tenancy.
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James Morris (Halesowen and Rowley Regis) (Con): Will the hon. Lady give way?
Often both landlord and tenant are charged for exactly the same service, which is otherwise known as double charging. I am afraid that it is not just a matter of a few rogue letting agents; it has become widespread bad practice throughout the industry. Mystery shopping conducted for the Labour party established that some tenants were being charged up to £450, and Shelter found that some were being charged as much as £700.
James Morris: Will the hon. Lady give way?
Those fees have included the charging of hidden sums for inventories, references, check-outs and renewals, in addition to the large amounts of money that people must find for the payment of rent up front and deposits. One in four people must borrow money in order to pay the fees and obtain a home.
James Morris: Will the hon. Lady give way?
Emma Reynolds: In a minute, if the hon. Gentleman will be patient.
When a first-time buyer buys a property, that buyer does not pay the estate agent. The seller pays the estate agent, because the estate agent is working for the seller, in much the same way as the letting agent is working for the landlord. If first-time buyers do not pay to obtain the keys to their first homes, why should tenants have to pay £450, £700 or more in order to obtain the keys to theirs, when they are having to pay rent and a deposit?
James Morris: Will the hon. Lady give way?
Emma Reynolds: I will give way to the hon. Gentleman, who has been very patient.
James Morris: I understand what the hon. Lady is saying about the need for transparency in regard to letting agents’ fees, but some commentators have pointed out that one of the unintended consequences of her policy would be an increase in rents. In Scotland, which has introduced the policy, rents have risen by a greater proportion than in any other regional country in the United Kingdom. What does the hon. Lady make of that?
Emma Reynolds: I simply do not agree with the hon. Gentleman. According to Shelter, which conducted a survey of letting agents throughout Scotland, there is no evidence—[Interruption.] I allowed the hon. Gentleman to intervene; perhaps he will have the politeness to listen. The survey by Shelter established that, since 2012, landlords in Scotland were no more likely to increase rents than landlords elsewhere in the United Kingdom.
What the hon. Gentleman and other Government Members must ask themselves is this: is it reasonable for letting agents to charge whatever they want to charge? For that is exactly what is happening. Is it reasonable for a letting agent to charge £300, £400 or £500 for inventories, references, and all the other things
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that the landlord needs, because the letting agent is working for the landlord? And guess what? The landlord is paying a percentage—usually 8% or 10%—in order to pay management costs to the letting agent. It is not as if the letting agent is not getting any money out of the transaction.
We are merely suggesting that, given that the tenant does not shop around for a letting agent—the tenant shops around for a property—the tenant should not have to pay the fees. If Government Members want to set their faces against Generation Rent, let them go ahead and see what the electoral consequences are.
Mr Prisk: Will the hon. Lady give way?
Emma Reynolds: I will give way to the former housing Minister.
Mr Prisk: I think that we all share the ambition to get rid of shoddy practice, but what will Labour’s proposals do to prevent landlords from raising the rent? There is nothing there.
Emma Reynolds: I have explained very clearly. I am sorry that the hon. Gentleman did not listen. We will put a ceiling on rent increases during the three-year tenancies, at the end of year one and at the end of year two. In Ireland there is a ceiling on rent increases during its four-year tenancies, and there is also a ceiling in Spain. We will consult industry representatives in order to reach agreement on what the best ceiling would be, but Ireland—[Interruption.] Members should listen. Ireland uses the average market rent, which seems perfectly reasonable, and Spain uses a measure of inflation that takes housing costs into account.
We can have a sensible debate, but all I say to the hon. Gentleman, who is a former Housing Minister, and other Government Members is, why should not families have stability and security for three or four years to plan the lives of their children? Why should they face the insecurity of their rents going up excessively and their having to change area and school? Such insecurity is having a massive impact on the aspirations and life chances of children in that situation.
Andrew Gwynne (Denton and Reddish) (Lab): My hon. Friend is right to focus on unfair letting agent fees. Is she aware of the study by citizens advice bureaux that showed that 73% of private tenants are dissatisfied with the service they receive from their agents?
Emma Reynolds: I have seen that report. Citizens advice bureaux are not the only ones making that point—the Office of Fair Trading has said that there is a substantial level of complaints about the letting agent industry. I say to the Government: ensuring transparency is not enough. If I am a tenant, knowing that I am going to be ripped off by £400 or £500 will not make it any easier, or any cheaper.
Jeremy Corbyn (Islington North) (Lab):
I am pleased that my friend has moved on to the administration of the agencies. Is she concerned that there is some suggestion by “Panorama” and others of racial profiling of tenants by some agencies and that many agencies refuse to even
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accept an application from anyone who is on benefit, which completely discriminates against people who need to be rehoused urgently?
Emma Reynolds: Such practice is criminal and should not be happening. At the tail end of last year, I saw reports, following some mystery shopping, that letting agents were sometimes instructed by landlords not to take on people from the black and minority ethnic communities and that letting agents were sometimes doing that themselves. That is appalling, and I am sure that there is cross-party agreement on the issue. Such practice is already criminal. This is a matter of enforcement. The law is already in place, which should stop that; but unfortunately, it seems to be happening in the capital.
Mr Slaughter: Will my hon. Friend look at the condition of the private rented sector? Double the number of private rented sector properties are unfit compared with housing association properties. When tenants complain, they are often evicted and thrown out on to the streets.
Emma Reynolds: Absolutely. That is why we proposed—I regret that the Government got rid of the legislation within weeks of getting into office—a national register of landlords and greater powers and flexibility for local authorities in areas where that is a particular issue. In London and other areas of high demand, it is a big issue. Those local authorities should have greater powers to introduce licensing schemes.
Nick de Bois (Enfield North) (Con): Will the hon. Lady give way?
Emma Reynolds: I will, and then I will wind up my speech.
Nick de Bois: In the motion, there is much that many can support, but where I struggle is on what you are saying about fees. You talk about limiting rents—
Mr Speaker: Order. I am not talking about anything. I think that the hon. Gentleman is referring to the hon. Lady.
Nick de Bois: I apologise, Mr Speaker. The hon. Lady talks about limiting increases in a three-year contract, but surely, without the fees, all that the agencies will do is front-load increases: we will see incremental, large rises at the beginning.
Emma Reynolds:
The hon. Gentleman raises a valid point. According to research by Shelter, which has conducted a thorough piece of work on the issue, only one landlord in 120 that it surveyed said that they had noticed an increase in agency fees and had passed that on in full to their tenants. Therefore, to be frank, the change we are suggesting is not that big. It is pretty big news for tenants, but it will not make a massive difference to the letting agent industry. It will have to change its business model slightly, but what it has done, especially in the years of the global financial crash, is shift ever so slightly, often little by little, the costs of the tenancy on to the tenant, who does not have the power and leverage to negotiate with the letting agent. The tenant sees a property that they like. They do not choose the letting agent. They do not have leverage over the negotiations.
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The landlord has that leverage, and the landlord should do the deal with the letting agent on the fees, including on the fee that the landlord pays the letting agent to manage the property.
Dr Huppert: Will the hon. Lady give way?
Emma Reynolds: I will not, as I have already given way to the hon. Gentleman and others want to speak.
The sad truth is that Ministers and some Government Back Benchers know that there is great concern about the instability and insecurity in the private rented sector, but they are simply unwilling to do anything about it. They have paid lip service to the concerns of generation rent, but they lack the courage of their convictions to bring about any meaningful change.
The Government have claimed that they are in favour of long-term tenancies and predictable rents. As I said, the Secretary of State has talked about inflation-linked rent rises, but four years into this Parliament, they have failed to act. I urge right hon. and hon. Members on the Government Benches to look carefully at our proposals to make three-year tenancies the norm, to put a ceiling on rent increases and to ban letting agent fees charged to tenants. It would be far better for the Government to take action now, but if they continue to ignore Generation Rent, the next Labour Government will not.
Sheila Gilmore (Edinburgh East) (Lab): My hon. Friend wants to end her speech, but I wonder whether she would be surprised to know that there will be a debate this afternoon in the Scottish Parliament on a similar subject. The Scottish National party-run Government are taking the same line as the coalition Government here and are resisting the motion proposed by my colleagues in Scotland, which is very similar to that which my hon. Friend has tabled.
Emma Reynolds: It is regrettable that the Scottish Government do not see the value of longer-term tenancies, predictability, stability and peace of mind for the millions of people renting in the private sector.
The Minister is an assiduous Member and a very eloquent one, but he has a tendency to lecture us on everything being our fault, despite the fact that he is the one in government. Therefore, in a spirit of co-operation and friendly advice, if he supports our proposals, he will have our support—it is a generous offer. I hope that he will have the 9 million people renting from private landlords in mind when he speaks. I also hope that he can engage with our proposals, which are reasonable and sensible. They are serious proposals for a vastly improved and more secure private rented sector. In that spirit, I commend the motion to the House.
1.7 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles):
It is a great pleasure to find myself doing combat with the hon. Member for Wolverhampton North East (Emma Reynolds). I hope that you will forgive, Mr Speaker, a brief further reference to “Game of Thrones” but I now know what the hound must have felt like when he faced Brienne of Tarth. I suspect that not everyone in the
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House will get that reference, but I recommend that Members look it up. It is intensely flattering to the hon. Lady. I feel sure that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Keighley (Kris Hopkins), who is the housing Minister, as a distinguished former soldier, would have been better equipped to fend off her attacks, but he is speaking at the Chartered Institute of Housing in Manchester. I know that he would like to be here.
The Leader of the Opposition’s motion follows a pattern that is becoming wearily familiar to hon. Members. I find myself wondering whether it is even becoming a little trying for you, Mr Speaker, although I am sure that you would never let it show. The pattern unfolds like this. The Opposition begin by identifying some real problems affecting people in the communities we all represent. Every Member knows from their constituency surgeries that irresponsible landlords and rapacious letting agents do exist. Every Member wants to deal with them. The Labour party then proceeds to slander an entire industry by claiming that the problems it has identified are an almost universal experience and that irresponsible and rapacious behaviour is typical business practice. After years of policy commissions and conference debates in which Labour Members worked themselves up into a righteous lather denouncing the horrors of capitalism, they then disinter a mouldy old policy from the 1970s, spray a bit of shiny new paint over it and present it as a solution to all the ills of the modern market economy. We have seen them follow that script in relation to energy bills.
Nick Boles: I will give way in a moment.
Now Labour Members are trotting it out for rental housing. It is difficult to say in which area their approach is more flawed.
Meg Hillier: This is not a throwback to an old era of problems; it is going back to an old era where there was security for tenants. Leaving aside the proposal of my hon. Friend the Member for Wolverhampton North East (Emma Reynolds), what are the Government doing to encourage long-term landlords who provide homes that are just for letting, not for future sale, so tenants can have a long-term future and have the security that my hon. Friend is talking about?
Nick Boles: In that old era, the amount of rental property in the country had fallen to 8%. It is now up at 18% because there has been investment in the sector; it is an environment in which people want to put their money.
Government Members recognise that there are some cowboys operating in the private rental sector. Some landlords are trigger-happy in terminating tenancies, using any excuse to turf out a responsible tenant who has just had the temerity to complain about some aspect of the property. Some letting agents and property management companies are greedy, gouging hard-pressed tenants for disproportionate fees without prior notice. That is why we are making letting agents publish all their fees in a prominent place and join an approved redress scheme, so that tenants can get a fair hearing and proper compensation. It is why we are developing a
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model tenancy agreement that landlords and tenants can use if they want to enter into a longer tenancy agreement.
Luciana Berger: Can the Minister tell the House when this model tenancy agreement might be available for use and for our constituents to benefit from?
Nick Boles: Our approach in government, unlike that of the last Government, is to consult the industry and tenants before we produce things. Therefore, I am happy to tell the hon. Lady that some time this summer she will see this model tenancy agreement. That is also why we have published the well-received “How to rent” guide that will empower would-be tenants and why we are developing a code of practice to drive up standards in the industry.
Jeremy Corbyn: The Minister will have heard my intervention on my Opposition Front-Bench friend. Can he confirm that the Government are prepared to take action to prevent racist discrimination by agencies and to stop agencies simply banning anyone in receipt of any state benefit even applying for a tenancy?
Nick Boles: I am grateful for that intervention because I entirely share the hon. Gentleman’s outrage at the suggestion that these practices are taking place. As the hon. Member for Wolverhampton North East (Emma Reynolds) said, there are already powers to deal with that, but it is important that they are used and enforced, and I hope very much that local authorities and police forces around the country will look closely at any evidence presented to them by “Panorama” or anyone else.
Fiona Mactaggart (Slough) (Lab): The question from my hon. Friend the Member for Islington North (Jeremy Corbyn) was not just about race discrimination, but about discrimination against tenants who depend on benefits to pay their rents. Is there any remedy for that?
Nick Boles: The hon. Lady will understand that obviously private owners of properties have some rights to decide who they let their property to, but I feel that it would be very strongly in the interests of all private landlords to work closely with people who are in receipt of local housing allowance and ensure that they too can access properties in the private market.
We will do nothing to undermine confidence in the long-term prospects of the rental market and drive away the institutional investors we need to expand the number of rental properties and improve their quality, but that would be the precise effect of the rent controls that the Leader of the Opposition proposes.
I hope hon. Members will forgive a brief foray into basic micro-economics, but I do think it is important in this debate. Owners of properties have a choice: they can either sell them and invest the money elsewhere, or rent them out. The more institutions we can persuade to invest in owning and renting property, the more options will be available to would-be tenants and the more likely it is that those who want longer tenancies with predictable rent reviews will be able to find landlords who are willing to offer them.
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If, however, investors in rental property think that their costs may increase while their rents are capped, they will do one of two things: they will either insist on a much higher rent up front, increasing the costs tenants face, or they will decide to sell the property into today’s buoyant housing market and invest the money elsewhere. The hon. Member for Wolverhampton North East is a highly intelligent woman and a much better economist than I am. She knows that this is the reality of the rental market, so why has she come to the House today with such an obviously idiotic policy? There are reasons.
Meg Hillier: Does the Minister not recognise that this growth in the number of individual landlords investing in the way that he has just described is one of the reasons why tenants have such insecurity? What are the Government doing—he is in government now—to encourage longer-term institutional investors to invest in properties that are solely for rent long term, so that tenants can get longer-term security?
Nick Boles: I am grateful to the hon. Lady for her intervention, as it is what I think is known as a soft ball, because this Government have of course done a great deal more than previous Governments to pull institutional investment into this sector. We have already identified in excess of £10 billion of equity that people are looking to invest in this sector. We have a £1 billion Build to Rent fund. We have £3 billion of guarantees for the private rented sector. The precise point here is that we will have some chance of pulling institutional long-term investment into higher-quality rental property if such investors have confidence that the rules of that market are not going to suddenly change and they are not going to suddenly find themselves being faced with unpredictable costs and capped rents. That is how we get institutional investment in, and it is precisely the opposite of what the Labour party is proposing.
Graham Jones (Hyndburn) (Lab): The Minister is making a fundamental point: he is saying that rents are indexed to capital values. Is that correct?
Nick Boles: I am not saying anything as complicated as that. I am a bear of a fairly simple brain, and I am simply saying that if someone cannot control their costs and is faced with capped or controlled revenues, that is a very risky environment and there are lots of other places where they can put their money, and we will see rental property returning to how it was until the housing legislation was changed: falling as a contributor to our economy.
Mr Andrew Love (Edmonton) (Lab/Co-op): The Minister said one of the factors that will give confidence to institutional investors is longer-term tenancies. However, the other issue, which he has not touched on at all, is of course reputational damage because of the difficult end of the rental market constantly receiving lots of very bad publicity. If he wishes to attract institutional investors, would it not be sensible to do more to deal with that reputational issue?
Nick Boles:
I agree with the hon. Gentleman in that, as in any industry, this industry will want to drive out the cowboys because they undermine the industry and people’s confidence in it, but we do not do that by
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imposing blanket controls that apply to both good providers and those few who upset the whole thing for everybody else.
Mr Slaughter: Is the Minister’s problem not that he sees this entirely from the landlord’s point of view and does not see the power relationship here? The reality for tenants in my constituency is that they are paying a fortune, often for very substandard properties, and cannot complain because they might be evicted. Is not the game given away by the Minister’s colleague the Housing Minister telling landlords “Well, if somebody’s on benefit, just evict them.”? Does the Minister support that?
Nick Boles: I do not accept anything that the hon. Gentleman says, but then I never do. The fact is that the interests of his constituents who are tenants are best served by having more investment coming in, to produce rental property of a higher quality supplied by professional companies that they then will be able to access.
We have to ask ourselves why the hon. Member for Wolverhampton North East has come to the House with this policy today. The first reason is that her boss, the Leader of the Opposition, wants to be seen as the man who will stand up to business and impose his will on the unruly forces of the market. He is not much interested in housing, and, lucky fellow that he is, it is a very long time since he needed to find a flat to rent, so he does not much care if the policy will work; he just wants a policy that will beef up his brand as the scourge of British business, and on that at least he has definitely succeeded.
The other reason lies deep in the DNA of the Labour movement. It is addicted to compulsion and control. From Douglas Jay, who thought that the gentleman in Whitehall knows best, to Nye Bevan, who wanted to know if a bedpan dropped in a ward in Tredegar, to Ed Miliband, who wants to decide how much rent should be charged on every property in the country in three years’ time, the instinct is the same: to make people do the things they want them do in the way they want them to do it. So they ignored the fact that, without Government intervention, average tenancy lengths have increased by 6% to reach an average of more than 21 months—without Government legislation. They block their ears to the majority of young people—still a very important group of tenants—who say that they value the flexibility of existing tenancies and do not want to be bound up in a three-year agreement. They draw a veil over the awkward truth that the Royal Institution of Chartered Surveyors, which the hon. Member for Wolverhampton North East claimed was helping her to devise a benchmark for her rent controls, is doing no such thing and opposes the policy.
Last year, the Communities and Local Government Committee, chaired by the ever-wise hon. Member for Sheffield South East (Mr Betts), who is unfortunately not with us today, conducted a review into the private rented sector. It concluded that it did not
“support rent control which would serve only to reduce investment in the sector at a time when it is most needed. We agree that the most effective way to make rents more affordable would be to increase supply, particularly in those areas where demand is highest.”
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Perhaps the Chair of the Select Committee is not in the House today because he did not want to face the embarrassment of disagreeing so intensely with his own party’s Front Benchers. The approach that the Committee suggests is the right one.
Frank Dobson (Holborn and St Pancras) (Lab): On a point of order, Mr Speaker. Could you ask the hon. Gentleman to tell us whether he warned my hon. Friend the Member for Sheffield South East (Mr Betts) that he would be mentioned in this debate?
Mr Speaker: It is the normal courtesy so to notify. A simple nod of the head will suffice if the Minister did notify the hon. Gentleman.
Nick Boles: I entirely apologise—I did not know that that was the practice, and I should have. I assumed that the hon. Gentleman would be here because he is the Chair of the relevant Select Committee. I will write to him straight after the debate to apologise for having referred to him without warning him.
John Stevenson (Carlisle) (Con): I bring to the House’s attention my declaration in the Register of Members’ Financial Interests. Is the Minister surprised that the Opposition’s motion makes no reference to the supply of housing, an increase in which would transform the market for all sectors—privately owned, social housing and private rented?
Nick Boles: My hon. Friend is exactly right, and he brought that insight to the Select Committee review that led it to draw such intelligent conclusions. The Select Committee’s approach is the right one. It is the core of the Government’s strategy, and I would even go so far as to call it a central plank in our long-term economic plan. I therefore urge Members to oppose the motion.
Mr Speaker: Order. Colleagues will have noted that, on account of the level of interest, there is an eight-minute limit on Back-Bench speeches.
1.23 pm
Frank Dobson (Holborn and St Pancras) (Lab): We last debated private rents on 24 March, and at that time I and other London Members pointed out that ordinary Londoners were being priced out of the city. I do not mean the City where they play with money; I mean the great London conurbation. That is because there has been a total failure in the housing market, be it buying or renting. Increasingly, ordinary people can no longer afford either to buy or to rent in London, and the situation is still changing for the worse. Prices and rents are still going up and, if the Evening Standard is to be believed, according to a recent headline rents in London are rising eight times faster than wages. Rents are continuing to outstrip wages.
Meg Hillier:
Nowhere is that truer than in my constituency of Hackney South and Shoreditch, where private rents are out of the reach of many people, who are unable to live in the borough. Does my right hon.
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Friend agree that the resulting higher population churn causes real damage to the strength of our local communities?
Frank Dobson: I entirely agree with my hon. Friend.
Things generally have been getting worse, but there has been one enormous change for the better: the Labour party’s commitment to regulating rents and providing security of tenure in a way not proposed for a very long time. I am delighted to welcome this development, although personally I would go rather further. However, it is the right thing to do, it is popular, certainly with Londoners, and it is an approach that works.
We had the “less than GCSE” economics lecture a few minutes ago on the merits of encouraging investment in the private sector, and how it would be damaged by regulation. That ignores all the European evidence. Germany and Switzerland have a heavily regulated private sector, including rent regulation, and they have the highest proportion of people living in the private rented sector. They live, generally speaking, in rather good quality private sector flats and houses, certainly better than the average here. People in the Netherlands, where the first rent that anyone can charge is set, are better housed than most people in Britain. We simply cannot go on with the current situation—ruinously high rents—under this Lib Dem-Tory coalition.
Last year, the average weekly rent in London was 51% of average weekly pay. It is now 55%, which is clearly ruinous for tenants.
Ms Karen Buck (Westminster North) (Lab): Does my right hon. Friend share my disappointment that the CityWest Homes letting arm of Westminster Council recently advertised an ex-council flat for sale at £650,000, but in doing so mentioned that it has just been let for £500 a week? Does he think that tells us everything that has gone wrong with the central London letting market?
Frank Dobson: My hon. Friend—my good, long-term and hon. Friend—makes an excellent point, as usual.
I recently picked up a brochure advertising new apartments to rent in Bloomsbury. A two-bedroom flat costs £560 a week. That is £26,880 a year. Who can afford that sort of rent? A Russian oligarch, I am sure—even perhaps a Ukrainian oligarch—and perhaps a banker who spends their time advising tax swindlers on how to avoid paying more tax by investing in Luxembourg; and here I do not mention Mr Juncker. However, nobody who is contributing to the local community can afford £26,000 a year—no shopkeeper; no bus driver; no teacher; no research scientist at the shortly to open Francis Crick Institute; no nurse. As I said in my last speech on this issue, no new consultant surgeon at Great Ormond Street hospital or University College hospital can afford that sort of rent. As a new consultant, they get, at most, about £80,000 a year. After taking off their tax and national insurance, that leaves £40,000 a year. So somebody on £40,000 a year would have to pay £26,000 a year for a two-bedroom flat.
It is a ludicrous situation that is bad for tenants, obviously. People come into London, or go to their local hospital, relying on Great Ormond street or University college hospital to get the finest treatment and care in the land, but the people providing it cannot afford to live near those great hospitals. The situation is intolerable.
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But it is not just bad for the local community and tenants; it is ludicrously bad for taxpayers, because private sector landlords are getting a public subsidy from the taxpayer of between £9 billion and £10 billion every year—that is what is paid out in housing benefit. It does not stay in the handbags and wallets of the tenants; it goes to the landlords. The last time I checked, agriculture was getting a subsidy of only £6 billion a year, but apparently it is okay for the private rented sector to get a £9 billion a year subsidy.
The Mayor of London now says that when he wants an element of “social housing” in a new development, it will count as such if it is going to be asking up to 80% of market rents. Most people cannot afford to pay that, so his programme does nothing for badly off Londoners. What we need to do is build more homes—homes that ordinary people can afford. We have the ludicrous situation where people who are homeless and the responsibility of the local authority cannot be re-housed by the local authority, because it does not have enough flats and homes, and so it places them in the private sector, where they have no security of tenure and pay ludicrously high rents, which are being met largely by the taxpayer. No economic theory can possibly justify anything as daft as that. The worst thing someone can say about something these days is that it is daft, and that situation is extremely daft.
Clearly, we need to put more effort into getting new flats and houses built. I have a madcap scheme to create more land in London by decking over all the deep railway cuttings and either building housing on them or using them as green spaces in order to justify building higher-density housing next to them. That is the only way in which we will create more land in the area, and we need revolutionary ideas such as that. In the end, however, we have to get a grip on house prices and private rents. Unless we do that, we are ruining—
Mr Slaughter: Will my right hon. Friend give way?
Frank Dobson: I have given way twice and I ought to sit down before my eight minutes are up.
1.33 pm
Mr Mark Prisk (Hertford and Stortford) (Con): May I draw the House’s attention to my entry in the Register of Members’ Financial Interests?
Let me start by saying that I strongly believe in both a bigger and better private rented sector. As with the housing market as a whole, as we heard from the right hon. Member for Holborn and St Pancras (Frank Dobson), we need more homes in this sector and more homes to rent. That means securing substantial private investment into the sector, for the long term. As the Select Committee found, increasing supply is good not only for the market as a whole, but for tenants, as it gives them, finally, the opportunity to choose and that helps us to make sure that bad and mediocre landlords raise their game. Therefore, the argument for increasing supply is not just an economic one; it is a social argument on behalf of the existing tenants in the marketplace. That is why the Government were right in taking on and fully implementing the findings of the Montague report.
The hon. Member for Wolverhampton North East (Emma Reynolds) asked what the Government were doing to get institutional investors in, so I should mention the £1 billion Build to Rent fund and the up to
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£11 billion in housing guarantees. They are crucial, not just because they involve large sums, but because they are long-term commitments to a sector that needs them. May I say to my former colleagues on the Front Bench that we could speed up the due diligence process on the Build to Rent fund? I have raised the issue with Ministers before, but if we are to get these homes under construction, we might speed up that process. I am sure that the Minister replying to this debate will want to set out where the Homes and Communities Agency has got to on this, because I know he shares my ambition to get those homes under way.
The Labour party is in danger of cutting off the very investment it claims it wants. The hopeless muddle—I am being polite—around the announcements from its leader’s office on rents caused many investors real alarm. There are responsible long-term institutional investors who want to invest and provide the quality of home and the longer leases that the Labour party has rightly been calling for, but by muddling rent indexation with rent controls and by part of its leadership playing to the gallery, the Labour party has left a large question mark over its housing policy. If, heaven forfend, we were to find next May that we had a Labour Government, that party and its Front-Bench team—I think they know this, given their chuntering—would need to clear up the muddle or they simply would not get the necessary investment and therefore the necessary supply.
Labour’s policy for a national register of landlords is just a gimmick. As we have seen in Scotland, such a policy would have little, if any, impact on standards, but we would see a rise in rents. The Labour Government checked what a national register would cost: it would be £300 million. Who would pay it? Would it be the landlords? No, it would be the tenants.
Graham Jones: Does the hon. Gentleman understand how long it takes local authorities, including his, to find out who a private landlord is and how much money would be saved by knowing who the landlord was through a register?
Mr Prisk: There is a case for registers in individual local authorities but, as the Select Committee agreed, a national register applied on a rigid basis is not the answer.