My concern is about the particular situation in Wales, which largely involves BBC Cymru Wales, ITV Cymru Wales, BBC Radio Cymru, which broadcasts Welsh language radio, and S4C, all of which contribute to the diversity of voices and images that we hear on the radio
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and see on our TV screens. It is of concern that English-language broadcasting in Wales is weak and does not really reflect the strength of local communities or the diversity of the English-language community in Wales when compared with the rest of the UK. Indeed, the Audience Council Wales, which works with the BBC, reported today that the 2014-15 budget has decreased and that the number of people tuning into BBC Wales has fallen, a pattern which is probably reflected in other parts of the UK’s local and regional broadcasting.
Given the ubiquity of Anglo-American broadcasting on television, I sometimes think that my constituents in Arfon know more of the workings of the LAPD than of the NWP—North Wales Police. I am sure that they could quote the procedures of the LAPD much more effectively. Print journalism in Wales is also weak, leading to a deficit of democratic debates. People in Wales tend to read newspapers from England—from London—and the coverage of Welsh life in general, and Welsh politics in particular, is small and vanishing. In fact, it was said that in one particular year the only coverage of Welsh agriculture on network news was the famous case of Shambo the Hindu bull, which was facing slaughter. That was the only thing reported about Welsh agriculture in an entire year—an “and finally” story if there was ever was one.
The main way for Welsh people to hear of events in Wales is through “Wales Today”, the BBC’s flagship Welsh news programme. It attracts an audience of nearly 300,000, which is good news—certainly for politicians—for TV diversity. Even given that success, and the BBC’s success in producing Welsh-language programmes for S4C, the Audience Council Wales has characterised broadcasts in English in Wales as being “closer to the cliff edge”, which must be a concern for Opposition Members and for the Minister.
I must inevitably turn to the most obvious example of diversity in UK broadcasting: a UK channel that does not even broadcast in English, namely S4C or Sianel Pedwar Cymru. I hardly need to remind the Minister of the cuts to S4C’s funding, not least the 93% cut in direct Government funding when they dumped most of the funding burden on the BBC. There is a measure of the 15-minute weekly reach of BBC programmes on S4C. In 2014-15, 131,000 people in Wales were watching such programmes. In 2013-14, however, the figure was higher at 155,000. I do not know whether that decline is permanent or perhaps just a feature of one year, but a drop of 24,000 must be of concern. All broadcasters face the challenge of declining audiences as people choose alternative ways of viewing programmes, such as online and, as it were, “out of time”, but S4C is the only Welsh TV broadcaster. It is the only place in the world—the universe—where Welsh-language TV programmes are available. In that respect, its decline is particularly serious and dangerous for the diversity of UK broadcasting in general.
That decline is countered somewhat by an increase in the accessing of BBC material online. I must be personally responsible for a large chunk of that, given that I watch BBC Cymru’s online output many times a day. Weekly hits have increased from 40,000 in 2013-14 to 89,000 in 2014-15, so growth has been rapid. I am also glad to say that young people are very much responsible for that growth, which is a hopeful sign for our future.
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Broadcasters need continuity of proper funding. It is a long-term business, and its base of expertise could be lost in a fairly short period of time. It needs that continuity in order to develop the world-class Welsh-language broadcasting that we need. The Minister will be aware of the campaign started by Cymdeithas yr Iaith Gymraeg—the Welsh Language Society—calling for statutory funding for S4C through a levy on larger broadcasters. I do not know how realistic that is—the Minister may like to comment in his response—but I am certain that we will hear a good deal more of that campaign over the coming months. This is just friendly advice and not in any way a warning, but the Welsh Language Society is very determined.
I might be knocking at a closed door, but I will end by saying that my party’s policy is for the devolution of broadcasting to the Welsh Government. The crucial matter—I think Labour colleagues share this view—is that broadcasting must have security of funding before that devolution can happen.
3.7 pm
Liz McInnes (Heywood and Middleton) (Lab): I thank my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) for securing this debate, which is timely and worthwhile and particularly relevant to my constituents, given that the BBC, since its move to MediaCity in the north-west, has become an important potential employer.
The BBC is quite rightly held in high regard in this country and around the world, but we must focus on areas where its service needs to be improved. Lord Reith summarised the BBC’s purpose in three words: inform, educate, entertain. That remains part of the organisation’s mission statement to this day, but public sector broadcasting needs to address other matters: inclusivity, diversity, equality, fairness and representation. My hon. Friend has rightly highlighted the lack of people from regional and working-class backgrounds on our screens and in management roles, but I will talk specifically about the representation of disabled people and about gender.
Quite simply, there are not enough disabled people on television. The BBC has announced plans to quadruple the number of people with disabilities that it puts on television by 2017, but those plans sound more impressive than they are. Just 1.2% of the people on BBC television are disabled. Quadrupling that figure will take it to only 5%. Disabled people make up about 18% of the population, so even 5% is 13 percentage points too few. For BBC television to fairly represent the disabled community and accurately reflect British society, the proportion of disabled people it shows needs to be multiplied not by four but by 15.
The disabled community is a cross-section of society. There are disabled people of every age, ethnicity, religion, gender, sexual orientation and political inclination. People with disabilities are frequently robbed of self-representation. In film, disabled characters are all too often portrayed by able-bodied people. I am glad that the BBC created the position of disability correspondent, but for disabled people to be properly integrated into television they need to appear constantly in programming that is not wholly about disability. It would be good if the BBC met its targets for increasing the number of people with disabilities in scripted entertainment by ensuring that
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more disabled characters are created and more disabled actors are employed to play them. An equally excellent and important strategy would be to ensure that more disabled actors are cast in roles for which it is immaterial whether the character is disabled or not.
Although great strides have been made on the portrayal of women by our public service broadcasters—there are many more women on our screens than there used to be—there is still a long way to go. Women make up 51% of the population, yet they are still under-represented on television and in management roles. In 2013, less than 18% of TV presenters over 50—not just in the news—were women. The BBC has a special duty, through the universality of the licence fee, to lead the way. It has identified gender equality as a priority. Tony Hall announced that, by 2015, 50% of breakfast presenters on local radio should be women. That is a good first step, but targets are needed in the news room, too. At present, there are not even publicly available gender statistics on the BBC broadcast reporters. What we see matters to all of us, and equality cannot be left to chance.
Watching or listening to a news broadcast might give the impression that there are plenty of women involved in news and current affairs broadcasting. On the surface, women appear to be well-represented. However, a closer look at the statistics shows that, despite making up more than half the population and a larger proportion of the TV and radio audience, women are severely under-represented on and off air in news and current affairs broadcasting.
A landmark House of Lords Select Committee on Communications report on women in news and current affairs broadcasting, published in 2015, highlighted concerns about the representation of women in news and current affairs broadcasting because of the genre’s wide reach and role in shaping public perceptions about society. It is well-documented that although women make up a significant share of broadcasters’ workforces, they are under-represented in flagship news. One study showed that there are three male reporters in flagship news programmes for every female reporter.
The House of Lords Committee also argued that women are poorly represented as experts in news and current affairs coverage. It underlined the expert women campaign run by Broadcast magazine in partnership with City University. It heard evidence that women make up only 26% of the people interviewed as experts or commentators and 26% of those interviewed as spokespersons.
In a typical month, about 72% of the BBC’s “Question Time” contributors and 84% of reporters and guests on Radio 4’s “Today” programme are men. The situation for older women is particularly bad. The Lords Committee heard from a number of journalists, including Miriam O’Reilly, who won an age discrimination case against the BBC. It concluded:
“The number of older women in news and current affairs broadcasting is too low. Evidence we have received suggests there is an informal culture of discrimination against older women within the BBC and other broadcasting organisations.”
John Nicolson: I am always interested in the Miriam O’Reilly case. She won the case, as we know, but has anyone seen her subsequently on screen?
Liz McInnes:
That is a very good question. I do not believe she has been able to find gainful employment in
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the media since the case. I have seen her, because she stood for the seat for which I was selected to be the Labour party’s candidate.
John Nicolson: So she has been doubly robbed.
Liz McInnes: I thank the hon. Gentleman for that intervention. It is a very good point. From talking to Miriam O’Reilly, I feel that by taking the case against the BBC she destroyed her career in broadcasting. It is extremely unfortunate, but it highlights the problems still facing women in the media.
It is extremely important that older women are represented on television as role models for younger women, for today’s older women and, indeed, for everyone. They have much to contribute. Gone are the days when women were seldom heard or seen in news and current affairs broadcasts. Nevertheless, our public sector broadcasters, Ofcom and the Government have a long way to go to achieve genuine gender balance, for older women in particular.
Mr Gary Streeter (in the Chair): The winding-up speeches now begin. I call Mr John Nicolson.
3.16 pm
John Nicolson (East Dunbartonshire) (SNP): I am grateful for the opportunity to speak. I congratulate the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) on securing this debate on diversity in public sector broadcasting.
I find myself in agreement with all the Opposition Members’ speeches. I cannot pretend there is an anti-Scottish bias as far as screen accents are concerned, in stark contrast to the bias against the English regions. From first-hand experience—I was a broadcaster myself—I can tell hon. Members that the BBC is comfortable with Scottish accents, and there are plenty of them, fortunately.
I did not know that the hon. Lady would raise the issue of the under-representation of other minorities—not least lesbian, gay, bisexual, and transgender people. Again, I can speak from personal experience. When I came out as gay when I was presenting “BBC Breakfast” on BBC 1, which I did for a number of years, I found that I was the first mainstream TV news presenter to do so. When I told the press office staff that I had given an interview to the Daily Mail, and that when asked about my home life I had been honest, they were aghast and told me that no BBC presenter had ever been openly gay before. I said: “Perhaps in news nobody has been openly gay before, but what about other fields?” They said that no one in any field had ever been openly gay. Larry Grayson and John Inman were, according to their BBC biographical notes, apparently just waiting for the right woman to come along.
That was in the year 2000, and I am not sure that much has changed. Why does it matter? As the hon. Lady rightly said, the faces and voices on TV, especially in news, should reflect the society in which we live. It is all about trust. I am the Scottish National party’s spokesman on culture, media and sport, and inevitably Scotland is my specialist field and interest. The BBC Trust in Scotland reports that less than half of the people in Scotland believe that the corporation represents their life. That is the lowest level of trust in the BBC of any of the nations in the United Kingdom, but it is no coincidence, given the number of TV programmes that are commissioned in Scotland and the jobs in Scotland.
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Comparisons are worth while, so hon. Members must forgive me for providing some figures. Programmes originating in Scotland from BBC Scotland account for 2,321 hours, whereas in Ireland Raidió Teilifís Éireann commissions 4,700 hours, and in Finland, Yle commissions 4,900 hours. There is a terrible dearth of commissioning in Scotland. What about jobs? BBC Scotland employs 1,200 people, RTÉ 1,800 and the Finnish Yle 3,500. Money? BBC Scotland receives £201 million, RTÉ £286 million and Yle £386 million. Of course there is the added absurdity that Scotland is perhaps the only country in the world where the main 6 o’clock news programme runs no foreign news of any kind. There could be Armageddon in Carlisle and it would run an air show in Carluke as the main news story. It is a most peculiar position and it is one reason why the SNP is keen on having a Scottish 6 o’clock news with proper news values—local, national, UK and international news chosen on the basis of merit, as happens on the radio.
Chi Onwurah: I am surprised to hear what the hon. Gentleman says. Is he saying that if for example something happened in Newcastle, less than 100 miles down the road, it would not be reported in the Scottish news?
John Nicolson: No, it would not. “Reporting Scotland” does not report anything outside Scotland. It is a peculiar situation and very different from Radio Scotland, which makes decisions based entirely on news merit.
Hywel Williams: The hon. Gentleman will be interested to know that BBC Wales in English tends to be about Wales—some might say parochially about Wales—but that Radio Cymru and the BBC news in Welsh have amazing agility and an ability to identify Welsh speakers at the far ends of the globe. They can report in Welsh on earthquakes in Peru, or wherever it might be, almost immediately. That shows the value of broadcasters that are very close to the people they serve. Like the mafia, they know where they live. They know who they are.
John Nicolson: That is a charming comparison of BBC Welsh bosses with the mafia; I am sure they would welcome it.
There is enshrined, entrenched provincialism in much of the output of BBC Scotland. There have been some improvements, but in 2006, BBC commissioning accounted for only 3.5% of content from Scotland. That went up to 9% in 2011. The Channel 4 figure went up from 2.6% in 2006 to 4.1% in 2010. There were significant improvements in Gaelic broadcasting under the SNP Government. In 2007 when they took charge, there was limited Gaelic broadcasting, but the SNP has found £12 million per annum to fund BBC Alba, which now reaches 500,000 people a month. To put that in context, there are only 100,000 Gaelic speakers, so 400,000 people are watching it hoping to understand it. I should of course mention that it is subtitled, so they will understand it.
We are calling for the Scottish Government to be involved closely in all aspects of charter renewal, because Lord Smith was vague when he talked about SNP Government involvement. He said that the Government in Scotland should be involved, but did not specify how. It was our intention during consideration of the Scotland
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Bill to delete completely the reservation of broadcasting from the Scotland Act 1998, and we offered an amendment to that effect. Unfortunately, it was rejected by Scotland’s single Tory Member of Parliament, who is of course the Secretary of State for Scotland in the peculiar constitutional arrangement that we have.
We believe that responsibility for broadcasting should be transferred from Westminster to Holyrood. We believe in the retention of the TV licence. We believe in a fairer share of BBC income to reflect the licence fee revenue raised in Scotland, which would provide a boost of some £100 million, stimulating the creative sector and production in Scotland. We think the Scottish Government and Parliament should have a substantial role at all stages of charter renewal, leading to legislative responsibility for the BBC in Scotland. Just as Scotland already has devolved responsibility for press regulation, so too should it have devolved responsibility for broadcasting. Indeed, given the climate of hostility towards the BBC and public service broadcasting from the Government, there is a good argument for saying that the BBC would be safer in Scottish hands. It will be remembered that the Secretary of State’s appointment was greeted thus by various newspapers. The Sun said, “it’s payback time” and The Daily Telegraph declared that there was to be “war on the BBC”. Well, by their friends shall ye know them.
It is no secret that many in Scotland were deeply disappointed by the BBC’s behaviour during the referendum, which fell far short of high journalistic standards, because of a perceived lack of objectivity, but there is a difference between the way we responded to that, and the way that the Government see the BBC. We felt a bit like disappointed lovers discovering the infidelity of someone we rather cared for. The Government, of course, feel very differently. We do not share the post-divorce visceral hatred for the BBC felt by so many on the Tory Front Bench—assuming, of course, that a marriage ever took place.
I thank the hon. Member for Newcastle upon Tyne Central for securing the debate, in which there is strong Scottish interest. Beyond that, her general points about the vital need for diversity are well made. I hope that all hon. Members on both sides of the House share that view.
3.26 pm
Susan Elan Jones (Clwyd South) (Lab): It is a pleasure to serve under your chairmanship, Mr Streeter. I thank my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) for a thoughtful, insightful and passionate debate on a subject of great importance. Her speech was fascinating for the range—indeed, the diversity—of the material it covered. The issue is about fairness, and there is also a strong economic argument. There was a range of other issues too, including how various regions and nations of the UK are portrayed, as well as accents. It was an important speech.
I thank hon. Members who took part in the debate. The hon. Member for Arfon (Hywel Williams) raised important issues to do with English and Welsh language broadcasting, including S4C in Wales. Perhaps I may cheekily tag on to what he said an issue that I do not think he mentioned directly, but which is related and important. That is to do with BBC broadcasting in
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Wales, and making sure that all the regions in Wales are represented. For instance, I am thinking of the sad loss of BBC Radio Clwyd, when colleagues across the border have BBC Radio Shropshire. My hon. Friend the Member for Heywood and Middleton (Liz McInnes) made a powerful speech, especially as it related to disabled people’s representation, or lack of it, and to that majority that is often a minority—namely us women.
There are three public sector broadcasters: the BBC, Channel 4 and S4C. Wider public service broadcasting includes the main channels of ITV, STV, UTV and Channel 5. Key among those, of course, is the BBC. As we all know, we are about to start the process of BBC charter review. The sections of the Green Paper that have not already been leaked will be published on Thursday and the Culture Secretary will deliver an oral statement. I hope that all hon. Members who are present will be able to attend. We will then finally be able to get on with charter review, with less than a year and a half to go before it runs out; although one might be forgiven for thinking that we have already started, with the Conservatives briefing against the BBC, forcing it to accept back-room deals, and seeming already to have decided what they want. In the words of the Secretary of State:
“My private view has always been that you have a much smaller BBC doing a much more targeted output of clear public-service content.”
So a shrunken, weakened BBC, which does not try to provide something for everything, left doing worthy posh programmes, as America’s Public Broadcasting Service does. Most of us do not want a BBC like PBS, which has to interrupt its shows to beg for donations. Most of us want diversity. Think of the irony, if we had a BBC that showed not “The Voice”, but instead endless speeches by the Secretary of State for Culture, Media and Sport on BBC Parliament—that makes no sense.
We will campaign with the public for a big, bold BBC at the heart of our national life, showing popular programmes and providing something for everyone, a BBC that carries out the mission of its first director-general, John Reith, to “inform, educate and entertain”. The public will have their say, and we will see what kind of BBC they want, the kind of country they want. An extraordinary statistic in this digital age is the 97% of the UK population who use a BBC service every week and, if the Government pick a fight with the public over the BBC, it is not too difficult to guess who might come out worse.
The BBC is not perfect. That is why an open and consultative charter review is important. We can gather the views of the public and examine where the BBC is doing well and where it can improve. One area to improve on is clearly diversity, today’s topic, although we need to distinguish between perceived and actual diversity. Perceived diversity is what audiences perceive—do the faces on their television and computer screens, or the accents on their radios, look and sound like the United Kingdom? Actual diversity is more about the workforce—are all people from all the many parts of the United Kingdom, and all its walks of life, able to compete for and win BBC jobs?
“Diversity” covers a great deal. People have many different identities, and it covers characteristics such as race, gender, sexuality, disability, faith and age, and different backgrounds such as nations, regions, communities
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and socioeconomic classes. Our country is, thankfully, a varied, colourful, boisterous place, and the nation’s broadcaster needs to represent such diversity. That is so important that it is one of the BBC’s six public purposes:
“Representing the UK, its nations, regions and communities”.
Why should we care about diversity, whether perceived or actual? The golden thread running through the BBC is that it provides something for everyone. That is not only a matter of simple British fairness and niceness; the BBC is paid for by everyone through the licence fee. The BBC provides something for everyone on TV, on the radio, online and in many other ways. It is the nation’s broadcaster, at the heart of our national life. That means that it should reflect the nation back to itself, and be open to talent, no matter what its source.
First, the national broadcaster should reflect the nation back to itself because people want to see stories and information about their lives and areas. They want to see people like them on the screens and to hear voices like theirs on the radio. That is not only about feeling that people like us are represented; it is about ensuring that all our lives are represented and that all our stories are told. Secondly, the BBC should be open to all the talents. The cultural and creative industries now account for about one in 11 jobs, and the proportion is growing. The sector is the fastest growing one in our entire economy. It has been improving its productivity, sucking in investment and selling British creativity, and Britain itself, to the world. Jobs are generally well paid and meaningful. Put simply, they are the jobs of the future, and we need routes into such jobs for all. It is about equal opportunity—people should not be held back by one of their characteristics or the fact of their background.
That is why diversity is important, and everyone in the cultural and creative industries gets that. So what is the problem? It seems to be that the BBC is still not in the right place on perceived or actual diversity. Unfortunately, people from historically marginalised groups still feel under-represented and negatively portrayed by public service broadcasting. That came out clearly in Ofcom research for its third review of PSB: 55% of people from black and minority ethnic groups felt under-represented and a similar proportion felt that they were negatively portrayed; half of LGBT people and half of disabled people felt under-represented; in the north of England, 20% of people said that they felt negatively portrayed; and the figure in Northern Ireland, I believe, was 26%.
The workforce is still unrepresentative. As Lenny Henry made clear, the creative industries—the BBC is no exception—still do not represent ethnic minorities. A Creative Skillset census showed that between 2006 and 2012, black, Asian and minority ethnic representation in the creative industries had declined by 30.9%, to 5.4%, the lowest figure since the body started taking the census. Much more therefore needs to be done to improve. Positive steps have been taken. The industry has established a measurement system for workforce and on-screen diversity. Thanks should go to the Creative Diversity Network, which will help to get accurate, up-to-date information on diversity, so that we can see exactly where we need to improve.
Honesty is the first step towards improvement. In 2003, 91% of BBC network spend was in London. Today, 53% of network spend is outside London. For
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the first time, the majority of BBC staff are based outside London, in the nations and regions of the United Kingdom.
Chi Onwurah: I thank my hon. Friend for her excellent speech, which is a comprehensive overview of many aspects of diversity, including some that I could not touch on. On her last point, with regard to the BBC having so much of its spend and workforce outside London, which I applaud, there is also the difficulty of getting from Newcastle to Manchester, which is greater than getting from Newcastle to London. The move to Salford has to some extent pulled commissioning and opportunities away from the north-east.
Susan Elan Jones: I certainly empathise, and other regions might have other issues as well. I, too, would speak up about that as a Member from Wales, were I not speaking impartially.
Positive steps point the way to further improvement, but more remains to be done. During charter review, we will be calling on the BBC to live up to its role as the nation’s broadcaster and properly to represent our United Kingdom, which is a diverse country. People should be able to see their communities reflected back to them, and they should be able to compete for the jobs of the future. A big, bold BBC should be here to make that happen.
3.37 pm
The Minister for Culture and the Digital Economy (Mr Edward Vaizey): It is a great pleasure to appear under your chairmanship Mr Streeter, as always. I thank the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) for calling this important debate, which has ranged far and wide. It started on the important topic of diversity and ended with the perhaps equally important topic of the future of the BBC.
I hope that hon. Members do not mind if I single out some of the chutzpah displayed in speeches this afternoon. I was amused, for example, by the hon. Member for East Dunbartonshire (John Nicolson), who talked, as though butter would not melt in his mouth, about the security that the BBC would feel were it transferred en bloc to the Scottish Government. The same Scottish National party made the political editor of the BBC feel so welcome during the referendum campaign that the BBC appointed a bouncer to look after him. In a recent interview, Nick Robinson described the attacks on him as
“an utterly calculated attempt to put pressure”
“the week before the referendum…a deliberate attempt to wrongfoot and unnerve, if not me, then my bosses in order to alter the coverage.”
John Nicolson: I remind the Minister that the BBC felt so proud of its political editor that, immediately after his rather embarrassing performance with the former First Minister, he was sent to Northern Ireland. That is not normally where the BBC sends people during a referendum campaign if it thinks that they have covered it with glory. Furthermore, the Minister might recall that the political editor subsequently said that it was not his finest hour.
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Mr Vaizey: I recall. Nick Robinson has now obviously been brought back from the cold; I gather that he is to be a presenter on the “Today” programme, taking over from Jim Naughtie, another fine Scottish voice represented on the nation’s flagship programme. Mr Naughtie will be a sad loss, although he will carry on as a special correspondent.
If people had not been listening carefully to the hon. Member for Arfon (Hywel Williams) they might have been under the impression that S4C funding had been cut by 93%. Of course, S4C remains one of the most generously funded broadcasters—not just in this country, but anywhere in the world. It does an outstanding job of promoting Welsh programming and the Welsh language. It is, of course, a great Conservative achievement: it was set up under Margaret Thatcher’s Government.
Finally on my theme of chutzpah, before a raft of interventions comes my way, I should mention the Opposition spokesperson, the hon. Member for Clwyd South (Susan Elan Jones), who talked about how her party wants a big, bold BBC. She failed to remind us of how the last Labour Government drove from office not only the chairman of the BBC but its director-general, because of their objections to some BBC coverage. I am not sure I am going to take lessons from any of the parties on the Opposition Benches about the future of the BBC. No doubt when the Green Paper is published on Thursday, they will take the opportunity to make their points to the Secretary of State during his statement.
I return to the main theme of the debate, put forward so ably by the hon. Member for Newcastle upon Tyne Central: diversity in broadcasting and, in particular, class and regional representation. The BBC is an important player in that. It goes without saying that its increased representation in Salford in the north-west, for example, has made a material difference to regional representation. Its representation in Glasgow in Scotland is also important. Just three weeks ago we had an important debate in this Chamber in which lots of MPs from the west and east midlands called for greater BBC representation in the midlands—Birmingham, in particular. I hope our Green Paper will reflect those calls and provoke a debate.
On the issue of representation of people from different socioeconomic classes and regions, as well as black and minority ethnic people, people with disabilities and women—the hon. Member for Heywood and Middleton (Liz McInnes) ably raised the need for both disabled and female representation in broadcasting—I echo the words of the hon. Member for East Dunbartonshire: I wholeheartedly agree with the sentiments put forward by all those who have spoken.
To pick up again on the themes put forward by the hon. Member for Newcastle upon Tyne Central, the question is about fairness—that goes without saying—but there is also an economic and business case, which she was right to mention. For example, Sheryl Sandberg, the chief executive of Facebook, points out in her book that there is a need to pursue gender equality not just because it is fair but because the economic and business case for it is overwhelming. That case stacks up on whatever kind of representation one wishes to talk about.
To the points that the hon. Lady made so ably I would add that such representation is particularly pertinent to the media. The media reflect—or should reflect—the society in which we live, so it is important for all of us
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living in the UK that, when we turn on our television or listen to whatever media we choose, we feel that the media reflect the kind of society that we live in. The power of the media is not simply in reflecting our society; whenever we see significant under-representation in any profession, the media can be a powerful advocate. If someone sees themselves represented on screen not just as themselves but as a lawyer or teacher, or any other profession that springs to mind, that is incredibly important. That is why it is so important to focus on this issue.
I hope that in those remarks I have demonstrated my answer to the hon. Lady’s first question, about whether I shared her concern. I certainly do. Her second question was about whether I thought that socioeconomic and regional background were important factors to take into account—again, the answer is yes, I do. She asked me whether we can make more progress, so I will concentrate on some progress that we have made, albeit in perhaps a slightly narrower field than she covered in her speech.
We know that the position is not good whichever way we look at it. The proportion of people from BAME backgrounds working in film, television, radio, video and photography has not increased in recent years. People with disabilities are significantly under-represented. Women make up only a third of employees in the film and TV industry despite making up more than half the population. As the hon. Member for Heywood and Middleton made clear, in flagship news programmes there are three male reporters for every female one. Employment in television and film has traditionally been low in the north of the UK, Wales and Northern Ireland.
Over the past couple of years, I have concentrated on BAME diversity in particular. I am happy to say that I was spurred into action by campaigns such as those in which Lenny Henry—Sir Lenny Henry, now—was being significantly vocal. In that respect, we have made some progress. All the main broadcasters are now committed to significant and stretching targets to increase diversity in broadcasting.
For example, the BBC has said that at least 15% of people on air will be from BAME backgrounds within three years, and that it will double BAME representation at senior level. The hon. Member for Newcastle upon Tyne Central mentioned the other difficulty that we must not lose sight of: that although we might be good at recruiting talented people at the start of their careers, there is a massive falling off when people reach mid-management level. ITV published its proposals at the end of last year. Sky has announced what is probably the most ambitious target—to see one in five significant on-screen roles going to people from BAME backgrounds. Channel 4 set out its new diversity charter in January.
The British Film Institute has put in place a system to ensure diversity in all films it funds in future. I was pleased that we were able to work with the Equality and Human Rights Commission and Ofcom to look at specific guidelines on the Equality Act 2010. Broadcasters are understandably nervous and do not want inadvertently to breach the Act; we need to make absolutely clear the progress they can make without doing so.
The most significant development, which addresses the wider point about socioeconomic diversity, is the new work being undertaken by the Creative Diversity
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Network, an organisation funded by the broadcasters—Channel Five has recently rejoined it following its change in ownership. Previously it had a rotating chair and non-permanent staff. It now has a permanent chief executive, a permanent chair, in John McVay from the trade body Pact. It is launching a monitoring scheme called Project Diamond, which will be uniform across all the broadcasters. Although this might sound a long way away, it is a difficult and complex project to put in place and so we are hoping to see the first data from it early next year. At that point I hope we will have got to the stage where broadcasters have nowhere to hide. The figures may be bad or shocking, but my hope is that people will not see that as an excuse to turn on each other but as an opportunity to learn what the baseline is against which they need to make progress.
We should not stop at broadcasting. We also need to look at theatre, and indeed at the arts in a much wider sense. I hope that in all those areas we will get to a position of no longer having to think about these issues and seeing people in roles and jobs, on and off screen, regardless of their background. That is very important.
There are other issues. As the hon. Member for Newcastle upon Tyne Central made clear in her speech, these are difficult professions to break into. Doing so is often based on networking or on whether someone can finance their early career by effectively working for free. I am pleased that, with Creative Skillset, an employer-led agency that works with Government, we have put together a programme involving some 400 different creative industries to put in place needs-blind apprenticeships that will support people, whatever their background. I think we are up to about 8,500 apprentices, 1,800 paid interns and 1,200 trainees. In terms of supporting the creative industries outside London and regional and socioeconomic diversity, the work of Creative England, which is effectively the screen agency outside London, is very important. It works in film, television and the video games industry.
Due to the success of the tax credit, much more extensive media clusters are developing, which I think will address some gaping holes. For example, in Northern Ireland, I think it is fair to say that “Game of Thrones”, which is now supported by the tax credit, has, in effect, created a very high-quality television cluster within Belfast and beyond. Screen Yorkshire is doing a fantastic job in attracting inward investment into Yorkshire. I have mentioned Salford, and we know that many Members of Parliament are also keen to see greater representation in Birmingham.
Finally, I take up the challenge that the hon. Member for Newcastle upon Tyne Central put to me: to get a casting director from London—I assume she means from London; if they were from Newcastle, it might be slightly pointless—to go to a northern state school. My challenge to her is to nominate the state school and the show. Touch wood, I will be free—and I will still be in this job—to go with the casting director and take them from the cosy metropolitan world they inhabit in central London to see some real acting talent, hopefully, in the hon. Lady’s constituency.
Mr Gary Streeter (in the Chair): You can’t say fairer than that. Chi Onwurah has a few moments to wind up if she wishes to take them.
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3.51 pm
Chi Onwurah: Thank you very much, Mr Streeter, for chairing what has been, as I think we can all agree, a very well informed and reasonable debate with a good deal of consensus—apart from when the question of the BBC’s charter renewal was touched on, which was not necessarily within the original remit of my debate.
I thank everybody for their contributions, including my hon. Friends, the Front Benchers and the hon. Member for Arfon (Hywel Williams). In this wide-ranging debate, there was a great deal of agreement on the importance of diversity, including, as my hon. Friend the Member for Clwyd South (Susan Elan Jones) set out, to both sides of the House, as well as economically and in terms of fairness for a big, bold BBC.
I am pleased with the Minister’s response about the casting director, and I look forward to choosing the show. In general, I agree with much of what he said; I agree that there are many initiatives and that he has a focus on them. I would like, however, to see more of a focus on socioeconomic background; perhaps that can be his next area. Whereas I talked about fairness and the business need for diversity, he made a very good point in saying that the issue is about showing role models to all of us. All of us need role models, which can be significant in changing the opportunities and ambitions of people more generally.
I shall nevertheless send the Minister all my questions in a letter, because the questions about data and their collection were perhaps not covered fully. I also say to the broadcasting industry that the data can effectively be collected automatically, because there is voice and facial recognition, and in future there will be nowhere to hide. I suggest to the broadcasters that they share the data now, while they can have some control over how it is understood, before they are exposed by big data in relation to all the gaps within their diversity representation.
That this House has considered diversity in public sector broadcasting.
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Domestic Renewables Industry
[Mr Nigel Evans in the Chair]
3.56 pm
Mike Weir (Angus) (SNP): I beg to move,
That this House has considered regulation of the domestic renewables industry.
I am pleased to appear under your chairmanship this afternoon, Mr Evans—however, perhaps the motion should read “failures in regulation of the domestic renewables industry”. At the outset, I say that this is not an attack on Government policy, but it is about raising consumer issues that have arisen in my constituency with two constituents who have had difficulty with installations and have found, frankly, that the regulation of the industry gives them little, if any, protection.
The first case I refer to involves Mrs Leslie, who comes from a small village near Forfar. She had photovoltaic installation in her home and, after a while, discovered a leak in the roof below the installation. It was not immediately obvious because it leaked into the attic and not into her living quarters. She had a loan from the Energy Saving Trust Scotland to fund the work, which had to be conducted by a microgeneration certification scheme—MCS—member. She sought advice from them about what she should do.
In the correspondence that took place before Mrs Leslie contacted my office, she was advised that the accreditation body for her installer, which had since entered administration, was NICEIC—which sounds like something from “Spamalot”, but apparently means the National Inspection Council for Electrical Installation Contracting. I duly contacted this organisation to explain what had happened in her case. I understood from her that an eligibility condition of the Energy Saving Trust loan was a borrower obligation that the works be conducted by a MCS-certified installer. As I said, the leak had not been immediately apparent after installation because the water penetration was in the attic and had not reached the ceiling of her domestic accommodation. However, it transpired that the installer had ceased to trade, and because of the terms of the loan that she had received from the Energy Saving Trust, she was unable to find builders certified and competent to conduct the necessary work.
I asked whether NICEIC would confirm what warranties were in place in respect of the work conducted by the members of its organisation and provide leads to suitably qualified builders who could conduct the necessary remedial works. Four days later, NICEIC wrote to advise that, although the installer had been registered with it in 2012-13, the installer had not been registered with it at the time of the installation. It therefore referred us to a rival registration body going by the name of NAPIT—the National Association of Professional Inspectors and Testers—with which the installer was registered at the time and which should have, we were told, assessed the installer for competence in the technology used.
I duly wrote to NAPIT, again asking what warranties were in place in respect of the work. It responded in a letter received on 26 February, confirming that it had held a registration for the installer until one month after the installation of the panels, so cover should have
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applied. Anybody with any sense would think that, if there was registration with a reputable body, they should be covered. It turned out, however, that the installer had failed to process a work notification on the NAPIT database that the work had been carried out. As there was no record of the work, there could be no warranty. I have to say to the Minister that I was as baffled as my constituent that an installer could deprive a consumer of applicable warranties by the simple expedient of failing to report that the work had been carried out. Although this installer was apparently registered, there was no warranty because of some failure on the part of the installer. That gives no protection to the consumer who was relying on that accreditation when they took the work on.
I established, via Glasgow City Council trading standards—the company was based in Glasgow—the identity of the liquidator, and my constituent has now submitted a claim, but as we all know from other liquidations, it is unlikely that she will get much out of that. We continued to engage in correspondence with Scottish Renewables and the Energy Saving Trust with a view to having the loan condition that all works must be conducted by an MCS-certified contractor waived, as the constituent was having problems getting a certified installer to perform the repairs. Just after the election, we were advised that, in the circumstances, they were content for her to engage a contractor of her choice to fix the roof and that they would not hold that to be a breach of the borrower obligation. Fair and well—it was good that that happened. At least, she might have some help, but she still had to pay for that herself because of the lack of any help through the registration process.
Throughout the process, my constituent was left asking, “What does approval by the Energy Saving Trust, the microgeneration certification scheme and the various accreditation schemes mean and what is it actually worth when you find yourself in this situation?” When that was put directly to the Energy Saving Trust, it explained, on 12 May, that
“whilst recommending that householders use MCS-certified installers”,
“is not involved in the certification, approval or monitoring of such installers”.
However, the home renewables loan scheme makes it a borrower obligation that loan recipients use such an installer. That appears to be a restriction of trade and distortion of the market that should clearly signal to consumers that this is an accreditation of real value, but as Mrs Leslie found, it had no real value at the end of the day. I share her concern that public money is being channelled to companies that are basically being allowed a competitive advantage on the basis of assumed competence without their being subject to proper scrutiny.
Three months before my constituent’s installation, the Department of Energy and Climate Change published its “Microgeneration Strategy”, in which it was asserted:
“In many cases, the non-financial barriers to microgeneration uptake are best tackled by the industry itself, with Government support where required. This is the basis of the action plan in the Strategy, which set out key deliverables, milestones, and responsibilities in the following areas… The Microgeneration Certification Scheme…will be made more effective, through simplified processes, improved governance and better alignment with existing certification schemes and testing requirements at the European and international level”.
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From that, I would suggest that a consumer is entitled to assume that the MCS has real value to them, but that is not what my constituent has found. The document says:
“On insurance and warranties, actions will be taken to help policy makers and the industry better understand the consumer protection structure, so that this is accurately reflected in regulation and the industry’s everyday processes. This should lead to consumers making better informed choices.”
But again I would say, if the choice is looking at the installer and the regulator, that my constituent did go through the MCS, did go through two regulators and was no better off at the end of the day.
“The MCS is making good progress in improving its governance. The scheme will be re-established as a free-standing, not-for-profit company, limited by guarantee.”
In the same month as that was published, the chief executive of the Energy Saving Trust had an article on the Which? Conversation part of the Which? website in which he said:
“As the supply chain scrambles to keep up, it’s fallen to two industry-backed and government-approved schemes to help regulate the market. The Microgeneration Certification Scheme…sets industry standards for installers of small-scale renewables and the REAL Assurance Scheme covers all non-technical aspects of an installation, from pre-sale contact to post-installation services.
Our concern is that the rapid expansion of the small-scale renewable market has stretched the capabilities of both these schemes to safeguard the consumer against poor installation and customer service.”
To back that up, I asked the Library for some figures on complaints dealt with by the Renewable Energy Consumer Code. It appears that the number went from 607 in 2011 to 1,892 in 2014. That is a very substantial number, even allowing for the fact that there are liable to be more installations now than in 2011.
In its document for the trade, the microgeneration certification scheme boasted:
“Being a part of this energy revolution will develop green skills and wider business opportunities, which the MCS brand will support by providing a mark of confidence. MCS will also enable you to access markets and reduce costs to your customers by assuring quality, knowledge and understanding are built into all aspects of the pre-sale and installation activities.
We believe that, by having the MCS Logo you will be able to distinguish yourselves as an installer company of merit.”
That is what consumers would expect when seeing that accreditation on an installer’s brochures, invoice or whatever. My constituent not unreasonably believed that, as a recipient of an advance of public money in the form of loan funds, she was being invited to select a contractor from a list approved by Government agencies. She trusted that their selection was a form of approval that was contingent on demonstrable competence. She has been let down twice, first by an installer that was neither technically competent nor financially solvent and secondly by an approved accreditation scheme that produces warranties that fail to materialise if the contactor fails to report the job. Is the Minister satisfied that the microgeneration certification scheme, which apparently fails to monitor the administration of guarantees and warranties, is fit for purpose? It appears that in this case it certainly was not.
The second case is also from the Forfar area. I do not know whether Forfar has been particularly unfortunate in this regard, but my constituent Mrs Hosie had a
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similarly unhappy experience. In June 2010, she had an air source heat pump installed by an MCS-approved installer, E. Scallan Ltd, certified by BRE Global. It soon became apparent that the air source heat pump was using a lot of electricity and that the installer was unable to remedy the situation. Mrs Hosie contacted BRE, which said that the installer had moved on to another accreditation body—NICEIC. When contact was made with that body, it emerged that the installer had moved on yet again, to the aforesaid NAPIT, but under the name Scallan Renewables.
Mrs Hosie then contacted the Renewable Energy Consumer Code and, after a conciliation stage, applied to go to arbitration in February 2014, during which it became apparent that when the installer applied on 25 January 2012 to change the name of the registered code member from E. Scallan Ltd, it had failed to disclose that Scallan Renewables, as a partnership, was a separate and distinct legal entity from E. Scallan Ltd. In its submission, Scallan Renewables argued that Mrs Hosie’s contract was with E. Scallan Ltd, not Scallan Renewables, which had no liability. Mrs Hosie, not unreasonably, argued that Scallan Renewables was registered under RECC with the same membership number as E. Scallan Ltd and that the businesses were significantly intertwined. The arbitrator, however, dismissed Mrs Hosie’s claim, on the basis that transfer of the membership number from ESL to Scallan Renewables did not constitute a transfer of legal liabilities, while acknowledging that the contractor had not made the position clear.
The RECC executive asserts that the contractor is in breach of the code because it did not advise the executive that the change of name was allied to a change of legal personality; and that, had it done so, RECC would have thoroughly scrutinised the request and sought undertakings that the new body would be asked to confirm that it would assume responsibility for contracts and warranties in the name of the former entity. In other words, as far as RECC was concerned all that happened was a change of name, but the effect for Mrs Hosie was to remove all her legal protection. The fact that such rigorous scrutiny is triggered only if the contractor seeking a name change flags up the simultaneous change of legal personality calls into question the effectiveness of the code as a consumer protection measure. As in this case, the installer can simply fail to mention that fact to RECC and all protection disappears.
As things stand, RECC has a prima facie finding that the contractor is in breach of the code and has brought it into disrepute, and documentation relating to that is published on the RECC website. None of that, however, has produced a solution for my constituent, who remains considerably out of pocket and disadvantaged, while trying to sell her house. She feels, not unreasonably, that a plethora of accreditation bodies have failed to secure proper consumer protection and that she is left with a system that is not fit for purpose but has been part-funded by the taxpayer.
My constituents feel that the Government need to be much more hands-on in securing proper regulation of the sector, particularly when substantial sums of public money in loans and grants are at stake. Of course, under the Government’s green deal schemes, many people have been persuaded to look at renewable
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energy schemes as a way of reducing their own energy consumption and helping to meet our green energy targets and climate change targets. Considerable amounts of money have gone into those schemes, but unless robust regulation is in place to protect the consumer and give them confidence that, should anything go wrong, there is a way of making a complaint and getting restitution, the schemes will be seriously imperilled. I urge the Minister to consider whether the schemes need to be looked at and stronger regulation implemented to ensure that consumers who are trying to do the right thing are properly protected.
4.12 pm
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom): It is a great pleasure to serve under your chairmanship, Mr Evans. I am extremely sorry to hear about the experiences of Mrs Leslie and Mrs Hosie, and I hope that the hon. Member for Angus (Mike Weir) will pass on to them an assurance that we will look into their cases with the regulatory bodies that he has mentioned. I will write to him about that. He is absolutely right to raise those cases; it is incumbent on us as MPs to raise specific cases whenever things go wrong. I hope that in talking about the subject and how the system works, I will be able to give him some reassurance that such cases are not the norm and that we will look into them. To have any problems is not good enough, but I believe that we have a robust system that is working.
I am grateful for the opportunity to take part in this debate with the hon. Gentleman. He has raised some interesting points about domestic renewable energy in the UK, particularly about the importance of ensuring that the right measures are in place to strengthen consumer protection. I hope that as I set out the steps that industry and other key stakeholders are taking to strengthen consumer protection, I will be able to reassure him, Mrs Leslie and Mrs Hosie.
We want to see more consumers choosing to heat their homes and generate their own electricity through renewable sources of energy. The development of a sustainable market for those technologies is possible only if consumers are confident that the market can deliver high-performing installations and provide for redress when things, unfortunately, go wrong.
We have demonstrated our commitment to small-scale renewable energy through the feed-in tariff and the renewable heat incentive scheme. The feed-in tariff has been a success since its introduction in April 2010. Some 700,000 installations, totalling 3.5 GW, registered for the scheme during its first five years up to April 2015. The domestic renewable heat incentive has had 37,000 installations register since April 2014.
The Government’s financial incentive schemes require installations of up to 45 kW for heat and 50 kW for electricity to be carried out by certified installers, as the hon. Gentleman points out, under the microgeneration certification scheme or an equivalent scheme. The Government do not regulate the market but rely on self-regulation through the MCS and compliance with building regulations, which is similar to the approach in the oil and gas industry.
The MCS is an industry-led scheme that covers product and installation company certification. The scheme works
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within the parameters of third-party certification according to established European and international requirements. The certification bodies that operate in the scheme are assessed and accredited by the United Kingdom Accreditation Service, or by equivalent national bodies if based in other countries. The scheme covers the whole United Kingdom. I am informed that 327 MCS installation companies are registered in Scotland, but many of those that are based in other parts of the UK offer services in Scotland.
MCS installers must also be members of a consumer code that is approved under the Chartered Trading Standards Institute consumer codes approval scheme. The only such approved code at present for the small-scale renewable energy sector is the Renewable Energy Consumer Code, which the hon. Gentleman mentioned. I am told that RECC carries out strenuous due diligence on all businesses that apply to join the code. In particular, it is designed to ensure that bogus companies and other businesses with directors or senior staff who have a questionable trading history are not admitted to the sector. An independent applications panel reviews the evidence and takes those important decisions.
In 2014, of more than 1,184 membership applications, 30 businesses were referred to the applications panel and 20 were refused membership on the grounds of the risk that they posed to the sector. RECC monitors all members closely, and any that appear to be breaching the code are subject to a disciplinary procedure. If a complaint cannot be resolved within a reasonable timeframe, the consumer may refer it to the independent arbitration service. An arbitration award is binding and enforceable. In 2014, 50 cases were referred to the independent arbitration service for resolution.
The Department of Energy and Climate Change takes any mis-selling, fraud or poor-performing systems in our support schemes extremely seriously. For example, last year, we introduced a service to enable consumers to obtain reliable estimates of potential renewable heat incentive payments to help them to verify quotes from installers.
We must recognise that, considering the hundreds of thousands of systems installed under the financial incentive schemes, the number of complaints that have been raised is relatively small. By way of example, RECC has estimated that 0.7% of all domestic solar PV installations in 2014 resulted in a complaint being registered with them. In other words, there were 754 complaints out of 110,120 installations. I am absolutely not complacent, because that is 754 complaints too many, and the hon. Gentleman has raised two such cases that we will look into. Nevertheless, the system appears to be working to a reasonable standard.
In addition to RECC’s internal complaints handling and independent arbitration service, there are other established dispute resolution processes for domestic
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heat and electricity generation. Those processes are regularly reviewed by a range of key stakeholders from industry, consumer organisations and the administrators for the financial support schemes. The MCS reports that the total number of installations across the full range of technologies since August 2012 was approximately 395,596. MCS received 1,348 complaints during the same period, which represents 0.34% of the installations registered since August 2012. The majority of consumers are content with their installation, although we recognise that the statistics do not cover complaints that may have been registered with other organisations such as a citizens advice bureau or trading standards.
As a result of its desire to reduce the complaint rate still further, MCS will introduce an alternative dispute resolution scheme in September. The scheme will be mandatory for certified installers should a consumer wish to go down that route, and it will give consumers an additional mechanism for resolving disputes that builds on the current RECC provision. Additionally, MCS is looking to strengthen the insurance-backed warranty schemes, building on what is currently required by the RECC code, which will give consumers further protection where companies leave the scheme and are no longer trading. Mrs Leslie’s case, which the hon. Gentleman mentioned, will potentially be covered by that new provision.
The issue of installation companies flitting between certification bodies to avoid discharging their responsibilities to consumers has been raised with my office. Both MCS and RECC enforce the safeguards that are in place to prevent that practice. However, MCS is considering tightening those safeguards through the introduction of additional requirements for certification bodies. Those changes aim to ensure consistency in the operation and enforcement of the certification requirements while improving the visibility of companies that may be acting unscrupulously.
I make it clear that we are absolutely not complacent, but it is important to recognise the many companies that are doing the right thing in meeting their obligations under the MCS and RECC schemes. The additional measures that are being developed, together with better co-operation across the sector, should help to weed out companies that are not interested in meeting industry standards.
I am grateful to the hon. Gentleman for securing this debate. I will write back to him specifically on the cases that he raises, and I hope to see the domestic renewables sector fulfilling its potential across the UK, with consumers having the confidence to play their part.
4.22 pm
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Shared Ownership Housing
4.30 pm
Iain Stewart (Milton Keynes South) (Con): I beg to move,
That this House has considered shared ownership housing.
It is a pleasure to open the debate under your chairmanship, Mr Evans. I wish to advance some thoughts that I have had for some time, and which were debated in my constituency at the general election, about how the shared ownership model could be expanded and improved to become a larger and more successful sector of the UK housing market.
Housing issues are rightly high on the political agenda. I do not propose to analyse some of the broader issues about housing supply or schemes such as Help to Buy, rent to own, the right to buy for housing association tenants and so on, although I will refer to them as I explain my proposals for shared ownership. My proposals would assist with the size of the overall housing supply and operate alongside other policies, not replace them. They fit neatly into other recent and planned developments, such as the liberation of pension funds, which the Chancellor of the Exchequer is introducing. I will turn to those later in my speech, but first I shall explore why I and many others believe that the shared ownership housing model has not fulfilled its potential.
At its heart, shared ownership is a simple concept that helps people who aspire to own their own home to get on the housing ladder. Rising house prices increasingly make the goal of raising a deposit and taking out a mortgage beyond the reach of many, even those earning decent incomes in some parts of the country. In addition, for young people, the cost of repaying student loans post-graduation plus the need to begin building pension funds limit the affordability of a home buying. I know from the experiences of many people in my constituency that policies such as Help to Buy are popular and effective, and that will be the same for other welcome initiatives from the Government such as the proposed discount for first-time buyers purchasing a new brownfield property.
Without help from the bank of mum and dad, or if someone is not already in a council or housing association property—for those people the right to buy is, or will be, an option—getting on the housing ladder will remain elusive, and for many people the private rented sector will be their only option. As we all know, rents can be at a level that makes saving for a deposit and mortgage difficult. Shared ownership offers people the chance to gain some equity and move towards full ownership. It also offers greater security of tenure than renting. I do not wish to do down the private rented sector; far from it. It fulfils a valuable role, particularly in areas where there is a highly mobile population, such as in university towns and cities, or in places, including parts of my own constituency, where dynamic economic activity requires shorter-term tenure housing stock. There will always be people who want to rent privately for short or long periods for a wide range of reasons, and the buy-to-let market helps fulfil that goal. As the Chancellor rightly identified in the Budget, the buy-to-let sector cannot become too dominant. The Governor of the Bank of England pointed out that that could pose a risk to the country’s economic stability. In addition, if it is too
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large, it will continue, through simple supply and demand forces, to push the affordability bar higher still for people who aspire to own their own home.
There is considerable evidence to show that home ownership remains the tenure of choice for most of the population. I see it in my own constituency, where we have considerable new housing development, and large numbers of the new houses are not bought by aspirant owners but by buy-to-let landlords. As well as restricting the supply of new housing to would-be owners, there is also some evidence to suggest that too high a concentration of buy-to-let properties is not as conducive as a broader housing mix to developing community stability. I have noted comments from the National Housing Federation, Orbit Group and the Chartered Institute of Housing that having a stake in their own home makes people more likely to invest in their neighbourhoods. For those reasons, I see a greater role for shared ownership.
Shared ownership is not a new concept. Many residents already use it successfully. Its main advantage is that it allows a route into home ownership for low and middle-income families who could not otherwise afford a full equity mortgage straightaway. There is not one shared ownership scheme; there are various schemes, but they share the common feature of allowing an individual to take out a mortgage on an initial share of a property. They then pay rent on the proportion owned by the housing association and mortgage repayments on their share, with the option to buy more shares in the property later—a concept known as staircasing. The National Housing Federation has shown that, by and large, the combined rent and mortgage payments under shared ownership are considerably lower than equivalent full mortgage repayments or full private sector rental payments for equivalent properties—so far so good, but I believe that there is huge untapped potential in the sector.
The Government’s affordable homes programme will run until 2018. It commits £1.7 billion in capital grant funding for affordable homes outside London, and includes provision for shared ownership. I am also aware, from the autumn statement and the spring Budget, that the Government have been looking at rule changes, which should reduce bureaucracy in the system and remove some of the barriers. Those are all very welcome, but I believe that we can go further still. My motivation in securing the debate is to make some suggestions as to how that might be achieved.
Jim Shannon (Strangford) (DUP): I am grateful to the hon. Gentleman for bringing the issue to Westminster Hall for consideration. In my constituency of Strangford, a great many people are involved in the co-ownership scheme. It has enabled those on low incomes to get on the housing ladder. The only thing that concerns me is this: for someone who is paying 50%, perhaps they should seek financial advice at the beginning about what happens when it comes to buying the other half, moving the other half through, or even legal problems if they cannot make their mortgage payments. Does the hon. Gentleman think that there should be more help to look at the long-term financial implications for those who want to go into co-ownership?
Iain Stewart:
I will touch on that point a little later, because one problem with expanding shared ownership is that tenants can find it difficult to take a big additional
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equity share. I will touch on a proposal in a little while that helps to address the problem the hon. Gentleman rightly identifies.
Mr Stewart Jackson (Peterborough) (Con): I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I congratulate my hon. Friend on his excellent debate. Does he agree that, with respect to the Landlord and Tenant Act 1985, because housing associations are considered to be private entities, the reasonableness or otherwise of service charges concerns people who wish to staircase in terms of shared equity and shared ownership?
Iain Stewart: That is indeed a problem, and I am grateful to my hon. Friend for raising it. A linked issue, which I shall come on to, is that tenants can be liable for 100% of the maintenance costs of the property, but do not own 100% of the equity. That is an unfairness in the system that I hope will be addressed.
The Minister for Housing and Planning can relax; I do not expect an immediate answer to my suggestions today. In fact, some of them go beyond his bailiwick and are rightfully matters for his colleagues in the Treasury, but I hope to make them constructively and he can put them into his thinking box; they are proposals for the long term.
Organisations such as Shelter, the Cambridge Centre for Housing & Planning Research, Orbit, and the Chartered Institute of Housing have, at different times in recent years, conducted reviews of the shared ownership sector and produced some useful recommendations as to how it could be expanded and reformed. I will draw on those recommendations, and indeed the earlier intervention touched on them, too. However, I will also introduce some fresh ideas that are linked to the Government’s reforms of the pension system and also, possibly, to the neighbourhood planning process.
One problem that has been identified with the shared ownership concept is a lack of general information and understanding among the public about what it entails. Schemes such as Help to Buy have very quickly gained popular resonance—Help to Buy is widely understood and widely advertised—but the same cannot always be said of shared ownership. Shared ownership is a complex brand, and it can be hampered by a lack of understanding of what it is, how it works, who might be eligible and what journey a person would take if they started off down the path of shared ownership, which can include knowing what exposure they might have if they wanted to increase their equity share; that was the point made by the hon. Member for Strangford (Jim Shannon).
My first proposal therefore echoes the call that others have made to develop a more effective common marketing branding for shared ownership houses, and perhaps a one-stop shop to advise people who think that shared ownership might be for them. Clear Government backing, simplicity and a standard model would also help.
Another disincentive with the current system is the liability for maintenance costs, which I have already mentioned. In many cases, the tenant bears 100% of the liability for maintenance costs despite not owning 100% of the property. That cannot be right or fair. Surely it would be fairer to have such liabilities in the same proportion as the equity share.
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Issues have also been identified with the bureaucracy of the eligibility criteria. One person quoted in one of the studies I have referred to said that the system can seem more like an allocation process than being able to select one’s own home. The system can also be too rigid, and many users find it expensive and complicated to staircase—that is, increase their share of the equity—not least because revaluation costs are incurred at each stage. Hurdles are often encountered if a family wishes to move while keeping a share in a shared ownership property, either because they are moving to another town or city, or simply because they want to change the size of their property because their family circumstances have changed. Such difficulties contribute to a view in the financial world that shared ownership is a complex and risky proposition, which can diminish the appetite to lend and develop new products.
Some solutions to these problems have been suggested, and I am sure that the Government are considering which of them can make the current shared ownership schemes work better. One solution is micro-staircasing, although I hope that it is possible to come up with a slightly better name; it sounds like a flight of steps for very little people, and one of those horrible new words that will encroach into our language. However, it is a good idea. What it means is that, rather than someone having to take large steps up in the share of equity that is owned, smaller and incremental steps of perhaps 1% or 2% at a time can be taken, which would smooth out the path for both sides of the ownership. That would help to address some of the concerns that the hon. Member for Strangford raised.
These suggestions will help and I urge Ministers to look at them, but I am not sure that in themselves they will realise the full potential of shared ownership. So I will outline my principal suggestion about seriously expanding the sector and injecting new capital into it.
The Chancellor has rightly liberalised the pension annuity rules, and many people relish the opportunity of being free not to buy an annuity. Once the temptation to buy Maseratis, yachts or fancy foreign holidays has passed, many people will look for a solid investment home for their capital that will generate a decent income for their retirement. For an increasing number of people, investing in buy-to-let property is the answer, and I do not want to diminish the importance of that option. However, as I touched on earlier, buy-to-let is not without risk, and if too many people choose it, that can lead indirectly to problems.
Why should we not explore ways in which such investment capital could be used to fund an expansion of shared ownership? I believe this could be done on both a large scale and, perhaps more importantly, at a very local and individual level. I do not want to remove the important role that the public sector and housing associations play in funding shared ownership developments; what I am suggesting would sit alongside that model rather than replace it. However, at the large scale I would like the Government to explore ways in which developers and financial institutions could work together to develop investment vehicles so that the capital from pension funds could be used to part-fund the development of shared ownership properties on new housing estates. This is not a new concept. In essence, it goes back to the first principles of building societies before they morphed into something else, with all the associated problems.
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However, my suggestion could also apply on a much smaller scale. Let me give a hypothetical example. Imagine I was somewhat older and had recently retired, and that I wished to invest some of my retirement funds in property rather than in buying an annuity. I could choose the buy-to-let option and run the risk of an uneven income stream if it was not always possible to find tenants, and I would have to pay letting agencies to find and vet tenants. There is also the risk of having antisocial tenants, and I would still be liable for the general maintenance and upkeep of the property.
Alternatively, I could invest in a shared ownership property with another individual. I would still have a capital investment and would gain an income from a mix of rent and releasing further stakes of equity over time. I would have greater security of tenant, and a tenant who would have a keen interest in maintaining and even enhancing the value of the property. Again, I would like the Government to explore the viability of a legal structure through which such a small-scale shared ownership arrangement could work. Such a structure may require some financial incentives, but in the Budget last week the Chancellor gave one in the rent-a-room scheme, improving the tax incentive for that scheme. Once again, I accept that that goes beyond the powers of my hon. Friend the Minister for Housing and Planning, but the Government may wish to consider it.
Finally, this model could be applied at a community level, whereby a consortium of local residents could invest in new shared ownership developments for their particular area. We often hear complaints that young families are priced out of their home villages because of soaring property prices. This model could be a way round that. It could also link into the neighbourhood planning process, helping communities to plan for the extra housing that they want to see rather than the enormous and out-of-character developments that they often fear.
I freely admit that I am no expert in housing finance or planning. I am sure that there will be many experts and professionals who can shoot holes in what I have just proposed. However, Parliament is a place for debating ideas and presenting new concepts, and I give these ideas freely to the Minister, and indeed to anyone else who cares to listen to them and take them forward in a way that I genuinely hope will help more people to realise the noble aspiration of owning their own home. Let us not try to find a myriad of reasons why we should not do something; let us try to find lots of ways in which we can make it happen.
4.48 pm
James Cartlidge (South Suffolk) (Con): It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Milton Keynes South (Iain Stewart) on securing this debate. I declare my interest: I am a director of a shared ownership property portal, so I have a very direct interest in—and, obviously, experience of—this subject.
Before making my points, I will make one comment about my hon. Friend’s proposal. It is very interesting and ingenious, and focuses on an important issue for me—the growing intergenerational issue that we are starting to face as a country and about which we need
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to think creatively. However, the historic problem with private shared ownership or shared equity schemes, shall we say, is the horrible issue of mortgagee and repossession. In other words, what happens if someone fails to pay? The reason why shared ownership has been very successful historically is that shared ownership leases contain a mortgagee protection clause. The housing association is a regulated social landlord; it will not go bust. Mortgage lenders trust that system and therefore, in effect, in the event of repossession there is a structure to operate.
There is much potential in my hon. Friend’s suggestion, but it would probably still be necessary to involve a regulated social landlord. For example, a property could be purchased and the applicant would take out a shared ownership mortgage in the usual way, but perhaps the investment would be used to part-fund the regulated social landlord simply because of the issue of landlord and tenant. If people simply go into partnership, there would be the horrible issue of what happens in the event of repossession, which always complicates matters.
I have had significant involvement in shared ownership, which is underestimated. One of my hon. Friend’s best points was that share ownership is perhaps not as well known now as Help to Buy, even though it has been running since the early 1980s. Help to Buy is a strong brand, but there is a key difference: it generally refers to equity loans, or shared equity schemes, which in essence mean that people buy 100% of a property but take out a loan for 20% of the deposit, normally paying no interest in the first five years, but legally owning the whole property.
With shared ownership, uniquely, a tenant owns part of a property, and just that part. They pay rent on the remainder, but are tenants of a social landlord and able to buy more shares through staircasing, as my hon. Friend mentioned, until they own the whole property. It is the best product for supporting home ownership, because it is the most sustainable. Say, for example, that I can afford 35% of a property and pay rent on the remainder: I staircase only when my circumstances allow me to. If I can afford only to remain on 35%, I can remain.
Another great strength of the shared ownership product is resales—a secondary market, important in towns such as Milton Keynes. People who type “£100,000 in Milton Keynes” into Rightmove would not expect to see any properties, but lots will come up, and I guarantee that nearly all of them will be shared ownership properties. People who have bought a shared ownership share of a new property can resell their share on the second-hand market. It is incredibly popular and the only system available in which people can buy a low-cost home ownership product relating to a second-hand home. That allows properties to come on to market if people cannot do any more staircasing. It is one of the great strengths of the property market.
London in particular is incredibly dependent on the product. In my property portal, resale properties go quickly when they come on to the market in London. Some critics of shared ownership have mentioned the difficulty of reselling, but, as with any property, it depends on location and other factors. In London, I believe that 97% of properties resell quickly. That has certainly been our experience.
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There are weaknesses with the product. It can be complicated, but that is partly because it is restricted to those on lower incomes. The Help to Buy equity loan scheme has no income restrictions at all: there are good and bad reasons for that, but it is a different type of product. Shared ownership is targeted at those on lower incomes so it is not surprising that it has stricter rules. In London, local authorities will often overlay their own priorities and it can become quite a complicated product. There is an argument that, when the public purse assists people on to the property ladder, rules and restrictions should apply.
For me, the most important point is that shared ownership has less of an impact on the broader market. My worry about the equity loan product and Help to Buy is that there is a danger that it underwrites higher prices than there would otherwise be. With shared ownership, housing associations will take any profit and recycle it in building rental social rented properties and so on, for those on low incomes. Obviously, the same does not necessarily happen with equity loan properties. I am concerned that buying with a Help to Buy equity loan is simply maintaining prices at a higher rate than would otherwise be the case.
This is such a huge issue for our country, as I hope to say in the Treasury debate quite soon. I apologise to the Minister if I am not around to hear his speech. A long-running issue with Britain’s economy is boom and bust related to the housing market. It is a fundamental weakness of our economic history—I hope it will not be one of our economic future—so we have to be ultra-prudent with products that intervene in the housing market.
Shared ownership’s record is sustainable: it does not stimulate prices to the same degree as equity loan; it encourages sustainable home ownership, because people buy what they can afford; and it is more affordable for people starting off in the market. If I wanted to buy a £250,000 property with an equity loan, I would have to get a mortgage of 75%, but if I bought it on shared ownership I could buy a share of as little as 25%. There is a danger that people who buy shares that are too small may never staircase—that is a risk with shared ownership—but of course they can sell that share to others on the second-hand market, which has a balancing effect.
Overall, the proposal is interesting. Something has to be done about the inter-generational gulf: people are retiring with significant capital and young people are working hard but do not have the capital to access the property market. There is a kernel within what my hon. Friend is proposing, although, as he admits, it will need a lot of detail and thrashing out. I think he has hit the nail on the head. This could be the way to take shared ownership forward to the next generation. Shared ownership certainly needs more support, because it is the best product available to support sustainable home ownership.
4.55 pm
Mr Stewart Jackson (Peterborough) (Con):
It is a pleasure to serve under your chairmanship, Mr Evans, and to follow my hon. Friend the Member for South Suffolk (James Cartlidge). I congratulate my hon. Friend the Member for Milton Keynes South (Iain Stewart) on his thoughtful contribution to a debate that is in some ways provocative. I have taken a great interest in this
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subject for many years, having been a local authority councillor for eight years and having had the privilege—many moons ago—of serving, in opposition, on the Department for Communities and Local Government Front Bench.
This debate is important because it leads us to some fundamentals. It cannot get any more fundamental: the debate about housing is the debate about who owns capital. If one is broadly supportive of owner-occupation, and of fairness and social equity, shared ownership is one of the best engines and catalysts to apply.
There is a crisis. Although I would, as a Conservative Back Bencher, say that the Government have done a pretty good job and have a strong track record in many areas—not least Help to Buy, the new policy on housing association right to buy, and other areas—in some respects there is a crisis of affordability, which is a function of a successful economy. I ask the Minister to bear in mind an important caveat: the London property market is not the national property market. London is, in a sense, a city state or economic microclimate and what applies to London would not necessarily apply to Milton Keynes, Stevenage, Peterborough or other parts of the country.
There are still significant issues around the need to drive up owner-occupation, which has fallen to about 64% of housing tenure now; it was hitting 70% 10 years ago. As Conservatives, and as a Conservative Government, we need to show strong support for home ownership and to make a value judgment about whether we can support the social rented model any longer. I understand that there is not really any ring-fence funding for social rent, other than specialist social rent such as extra care facilities for older or disabled people, where social rent will always be needed. There is now a different paradigm in play and a question about whether it has become too easy for housing associations, which are registered providers, effectively to warehouse social welfare dependency using social rent. We should not be nonchalant about that.
We need to ensure that housing associations really step up to the plate and do what they can to provide an all-round service for their tenants. Shared equity is part of that. In my local area in Peterborough, there is a good registered provider, Cross Keys Homes, which, among other things, goes into elderly people’s homes to check their wellbeing. It has an apprenticeship school to help young people and does a good job on antisocial behaviour and crime. Not all registered providers are like that.
Like everyone else in receipt of public money, registered providers make rational choices. If the rational choices are to carry on with a limited model of social rent, rather than developing their own products with market sale and particularly shared ownership, then they will continue to do that, because they have a vested interest in so doing. Other factors make that probable, too. It is a fact that since the downturn in the economy, there has been a consolidation with large developers. These behemoths—I will not name these massive companies, but they are aware of who they are—are limited in their strategic plans. They want a certain number of houses to be built; they do not like innovation, particularly; they want a very simple contractual relationship with a registered provider; and—let us be honest—they do not really buy into shared ownership as much as they should.
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One of our institutional problems, which arises from the financial crisis, is a paucity of understanding, across the whole sector—not least from homebuyers—about intermediate mortgage products. People often do not like them because they do not understand them. The very helpful Library briefing that accompanies the debate makes the point strongly that it can be extremely difficult for people to sell on properties. My hon. Friends the Members for Milton Keynes South and for South Suffolk made that point, too, and we need to look at it. We need to find a way to give a fiscal incentive through the tax system for people to develop better intermediate mortgage products to support shared equity and shared ownership. That is extremely important.
A lot of these marginal housing developments that might support more shared ownership are on brownfield sites. We all support development on brownfield sites. The Government in the Budget and the previous Government have done a lot to flag that up as an important area. It is important to encourage people to build on previously developed land. We always have problems with joint ventures, such as with European Union procurement rules, so we have to look at the matter holistically.
Another area related to shared ownership that the Government still have not got a grip on is real estate investment trusts—in fact, no Government have tackled the area properly in the past 20 or 30 years. Although shared equity and shared ownership are important, so is good quality housing. We have not yet been able to tackle the long-standing legal and financial difficulties that have been overcome in other places—in Europe, Canada and the United States. As my hon. Friend the Member for Milton Keynes South mentioned, REITs mean serious money going into the housing market to provide for pension funds and other institutional investments. We still have not got them right in this country, and I do not quite know why that is.
We can make things a lot simpler. It seems strange to me that the basic model lease contract that the Homes and Communities Agency has published for shared ownership properties precludes sub-letting. In a housing crisis, the simple question is: why? Is it an issue around ownership and the difficulties with dispute where the mortgage or rent is not paid? The Minister would be wise to look at that in the context of the Landlord and Tenant Act 1985, which I mentioned earlier. There is no evidence that expanding the shared ownership market would have any cumulative macroeconomic impact on the housing market. There is no empirical or academic evidence that it would drive up inflation. I stand to be corrected by any Members here or by any erudite and intelligent academics who are spending their afternoon watching this Westminster Hall debate, but I do not think I have seen the evidence. The Public Accounts Committee looked at the issue not that long ago.
We cannot necessarily rely on owner-occupation to drive up home ownership; I do not think it is possible, not least because of the issues I raised about London. I bought my house in London many moons ago, and it strikes me as astonishing—I will not give too much away, because Mrs Jackson will not be pleased if I do—that I could not buy that house now on my and my wife’s salaries, and I am a Member of Parliament.
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What is it like to try to buy a property in any of the 32 boroughs of Greater London for a probation officer, a police officer, a student nurse or a teacher? It is nigh on impossible. While we are at it, call me a little Englander but I do not think it is edifying to read of offsite flats overlooking Canary Wharf flying off the shelf in a matter of hours, with half of them bought by foreign investors. It is a skewed housing market where that happens while there are large numbers of homeless people in Greater London and many people on housing waiting lists.
We need to look at service charges and the HCA guidance. The HCA needs to give stronger guidance, as well as use money from the allocations of the affordable homes programme to encourage registered providers and housing associations to push forward with shared ownership. That is extremely important.
My final point is slightly tangential to the substantive debate; it is about housing allocations. We have to do something to boost shared ownership. We rely on home ownership at one extreme and social rent at the other. The parents of the young people who live on the Dogsthorpe estate in my constituency come to me and say, “My daughter or son is working. They are good, decent, law-abiding people, but they only earn £18,000 a year. They are band 3 or band 4, and they will never have a home of their own.” I have to look them in the eye and say, “There is nothing I can do about that”, but I do not want to be in that position. The Government and housing associations can contribute practically, and there is political will from the Treasury.
My hon. Friend has started an extremely important debate. The Minister has been experienced and thoughtful as both a local council leader and a Minister, and I am sure he will take the points on board and pass them on to the Secretary of State and the Treasury.
5.7 pm
Hannah Bardell (Livingston) (SNP): It is a pleasure to speak under your chairpersonship, Mr Evans. I thank the hon. Member for Milton Keynes South (Iain Stewart) for securing this debate, which has been interesting and informative and has heartened me in the wake of a Conservative Budget that has much in it that worries and saddens me. There seems to be consensus around the Chamber on shared ownership. As Members will be aware, housing is a devolved matter for Scotland, and that has allowed the Scottish Government to create a different story from that in the rest of the UK.
I will draw briefly on some of the interesting points that have been raised. The point on students being hindered by student debt is important. We heard in the Budget that student grants will be ended, so we need to look at the gulf that will develop between those on much higher incomes who have owned homes for a long time and the next generation of homeowners, many of whom are being locked out because of the disparity in house prices and other challenges.
Let me give some information about how we have dealt with the issue in Scotland. The latest figures show that the total of new build completions was up 4% to the end of 2014, and that was driven by a 16% increase for private-led sites. We had 15,541 homes completed in 2014, which was 657 more than in 2013. Total new build starts were up 15% in the past year. The Scottish
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Government outperform other parts of the UK. In Scotland, we have 63 new build social sector completions per 100,000 of population, compared with 46 in England and 25 in Wales. In the year ending December 2014, the rate per 100,000 of population for private sector completions was higher in Scotland, at 228, compared with 173 in England and 175 in Wales. In the latest year, an additional 30,000 or so private sector homes would have had to be built in England to match the Scottish completion rate. We have put that very much at the heart of what we want to do to provide affordable housing throughout Scotland.
A point was made about rural areas, which are particularly challenging. In some areas, people come from elsewhere in the country to what are considered beautiful parts of Scotland, such as Arisaig, where I have spent a number of summers over many years. I know stories of local people who have either returned to live in the area or tried to get out of social housing and into private housing but cannot because they are priced out by people coming from other parts of the UK and the world.
On shared ownership in Scotland, the SNP and Scottish Government have shown their commitment to supporting home ownership in a balanced, sustainable way by helping people on low and moderate incomes to become homeowners, if it is affordable for them. The low-cost initiative for first-time buyers—LIFT—programme brings together several ways of helping households to access home ownership. The new supply shared equity scheme allows first-time buyers to buy new build properties from housing associations, and the Scottish Government give grants to registered social landlords—normally a housing association or housing co-operative—to help them to build or buy new homes for sale.
In March this year, the SNP Government announced £70 million of funding for the open market shared equity scheme, allowing first-time buyers to buy properties on the open market. Priority access will be given to social renters, disabled people, members of the armed forces, veterans who have left the armed forces in the past two years, and widows, widowers and other partners of service personnel for up to two years after their partner was killed while serving in the armed forces. There is a marked difference in Scotland from the UK Government’s approach to housing. We are looking at investment, not austerity. Nevertheless, the £107 million cut from Scotland’s budget, on top of an overall 9% budget cut since 2010 and a 25% cut to the capital budget, is unacceptable and prevents the investment in housing projects that create jobs, forcing austerity on Scotland.
We have shown in Scotland that investment in affordable housing can keep costs down, create jobs and, importantly, help to give people better lives. Commenting on the Budget measure that will remove automatic housing benefit for those aged 18 to 21, Shelter Scotland called it “shameful…unjustified and cruel”. If we are going to invest in the next generation of homeowners and people, we have to have good housing and good education, and the best start in life is imperative. This Budget is not going to do that.
5.12 pm
Dr Roberta Blackman-Woods (City of Durham) (Lab):
It is a pleasure to serve under your chairmanship again, Mr Evans, and to participate in this important debate. I
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congratulate the hon. Member for Milton Keynes South (Iain Stewart) on securing it. It is interesting that there has been pretty much consensus across the Chamber on the importance of investing in shared ownership.
We know that there is a housing crisis. Low to middle-income households earning between £20,000 and £40,000 were once able to afford a decent-quality home for their families. That is no longer the case. We are seeing a steady decrease in the number of homeowners as prices rise out of reach for increasing numbers of people. In fact, home ownership fell to a 30-year low of 65.2% in the last Parliament. Coupled with that decline, the crisis in housing supply and affordability is contributing to a whole range of social and economic problems—a point outlined well by the hon. Member for Livingston (Hannah Bardell).
Shared ownership is a clear route to solving the housing problems of those on low and middle incomes, yet it remains on the margins, and as a number of Members said so eloquently, very few people who badly want to get on the property ladder are even aware that it exists. The hon. Members for Peterborough (Mr Jackson), for South Suffolk (James Cartlidge) and for Milton Keynes South made that point really well. It has been noted that the Government’s Help to Buy scheme offers help to those who might be able to get into the housing market anyway, and it is of most benefit to families on middle incomes and above who struggle to save for larger deposits but can meet the demands of a mortgage. The same could be said of the starter homes policy.
Deposits are only one barrier to home ownership, and many low to medium-income households cannot afford deposits or mortgage repayments. For them, shared ownership is really important. They could also do with some financial advice to help them to secure shared ownership—the hon. Member for Strangford (Jim Shannon) made that point well.
In its 2012 report on shared ownership, the Resolution Foundation made comparisons with the private rented sector and cited the case of a couple with one child and a net income of £23,000. Under shared ownership, that couple could afford a 25% share of a two-bedroom home in 87% of local authorities throughout the country, but they could afford only the equivalent of private rented accommodation in 60% of local authorities, which shows how much more affordable shared ownership would be.
Why are user numbers not higher? In answer to a question I asked about shared ownership, the Secretary of State said that it accounts for only 0.76% of the total dwelling stock in England. A 2012 study by the Cambridge Centre for Housing and Planning Research showed only modest increases in the purchase of shared ownership units over the past 10 years. Clearly, a lot could be done.
It would be helpful if the Minister touched on a number of issues relating to shared ownership. Ownership status has not been designed to meet the needs of those who would benefit most. That must change. Mortgage availability is perhaps too limited, and the Government should review the capital weightings. Maintenance charges can be a serious problem for people, as can sector mobility—the low number of dwellings in the sector makes it hard for people to move. The Government should work with sector leaders to realise the sector’s potential and encourage the development of a voluntary code of practice.
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I welcomed the Government’s consultation on shared ownership earlier this year. I call on them to set out a clear longer-term housing strategy, with a pivotal role for shared ownership, rather than the many piecemeal schemes that they have pursued to date, and that should be put alongside a serious strategy for increasing housing supply.
5.17 pm
The Minister for Housing and Planning (Brandon Lewis): It is a pleasure to serve under your chairmanship, Mr Evans, for, I think, the first time. I congratulate the hon. Member for Milton Keynes South (Iain Stewart) on securing this debate on shared ownership. Towards the end of his speech, he rightly made the point that Parliament is a place for debating these ideas and putting them out there; he has taken great advantage of the opportunity to do so and given a good example of how our debates play through.
It is just over two months since the general election, and we are well on the way to planting the roots that will enable us to meet our manifesto commitment to helping people to meet their aspirations to own their own home. Shared ownership is an important part of that. Let us remember that when the Conservative-led coalition first came to power in 2010, we inherited a situation in which the banks were not lending, the builders were not building and people were denied the opportunity of home ownership. We had a long way to go from what Labour left us with: the lowest level of house building since the 1920s. There was also a top-down planning system, the regional spatial strategies, which produced not houses but that lowest rate of building.
We are now working to ensure that we can meet people’s aspirations to own their own homes by building on improvements in house building and support. Since 2010, more than 260,000 affordable homes have been delivered in England, including 41,000 for shared ownership. Our affordable homes programme has exceeded expectations by delivering nearly 186,000 affordable homes since April 2011—more than originally planned. In the first quarter of this year, house building completions were up by 21% on the same quarter last year. We will deliver 275,000 affordable homes over this Parliament to achieve the fastest build rate in some 20 years.
I turn now specifically to shared ownership. As hon. Members have rightly outlined, full home ownership can be a challenge for first-time buyers. Shared ownership offers a route through that via the part-buy, part-rent model. Purchasers buy a minimum 25% share in a new build property at market value, generally provided by a housing association, and pay a controlled rent on the remainder. Further shares may be bought until the property is owned outright. Shared ownership has proven over recent decades to be popular and it is clearly effective. Households that are otherwise priced out of the housing market get a chance to get a foot on the property ladder at a lower initial cost. For many people, shared ownership is a stepping stone to full home ownership, which is why it is such an integral part of the affordable homes programme. Some 41,000 shared ownership homes have been delivered since 2010.
We need to look for more ways to help identify and lift the other barriers to extending shared ownership.
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Following the autumn statement, the Government took a number of steps. We consulted on a range of proposals to streamline the process for selling on shared ownership properties and to increase mobility. We also held discussions with housing associations and lenders. The Homes and Communities Agency now has amended guidance and model leases to remove the pre-emption right for shared ownership properties that have staircased to outright ownership, making it easier for those who have met their aspiration for full home ownership through shared ownership to move on. I am happy to take up the challenge of my hon. Friend the Member for Peterborough (Mr Jackson) to ensure that the Government and the HCA look at the guidance to see what more can be done. We can always try to be better.
Hannah Bardell: Will the Minister give way?
Brandon Lewis: I will not because of the time.
The change came in to effect across England at the end of April and the Greater London Authority confirmed that it would mirror the changes in May.
I thank my hon. Friend the Member for Milton Keynes South for his ideas, and I am keen to finish in time to allow him to say a few more words. Some of the issues that he raised were mentioned in discussions earlier this year with providers and in the good work done by a range of people looking at extending shared ownership. His speech today included some interesting and new, but challenging, ideas that we will take away and consider. I hope that he will accept my invitation to come and talk to us in the Department for Communities and Local Government. We remain committed to considering suggestions that can enhance the contribution that shared ownership can make to extending home ownership.
My hon. Friend the Member for South Suffolk (James Cartlidge) rightly outlined the benefits of shared ownership. I have seen it for myself on tours around the country, during which I have seen shared ownership properties, not least here in London, with the great examples at the Olympic park that show how it allows people to get into home ownership in a place where they want to be. We have a complicated housing market, and it is absolutely right that the Government ensure that there is a framework that offers a menu of options, so that someone on the demand side looking to get into a home of their own can look across the menu to find the product that is right for them. It could be shared ownership, Help to Buy, right to buy, starter homes or one of the other products out there.
My hon. Friend the Member for Peterborough is right that we must remember that there is a market outside London. We might talk of a housing bubble, but some people around the country will be living in negative equity and will wonder what we are talking about. We must be conscious of that, and my hon. Friend was correct to mention right to buy.
My hon. Friend the Member for Milton Keynes South noted that it is right to do all that we can to support those who want to own a home of their own. We believe in helping people’s aspirations, which is why we will offer more than a million housing association tenants the option to buy their home in the same way that generations of local authority tenants have. Until now, those housing association tenants have received
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little or no assistance. That is unfair. Aspiration should not be determined or limited by the organisation that manages someone’s home, especially if it was ultimately funded by the taxpayer. That is why we will ensure that housing association tenants have the same rights to buy a home. Housing associations can play a key part in that, and I hope to see them build on the fantastic work that others have already done to develop the shared ownership model further and to help their tenants staircase to home ownership.
The Government are also committed to building 200,000 starter homes during this Parliament to be offered to young first-time buyers at a 20% discount on their open market value. The productivity plan published last Friday announced that we will introduce an ambitious package of planning reforms and proposals to help deliver starter homes and to show commitment through national planning policy changes, and with the housing Bill later this year, we will deliver the homes that we want to see built across our country.
Hon. Members were right to refer to large and small developers. Many large developers started off as small developers, but I would argue that the planning restrictions and the regional spatial strategies and regulations that were brought in under the previous Labour Government actually made it more difficult for small builders to become the larger builders of tomorrow. I suspect that even the larger builders would admit that they would like to see more competition coming through. That is why we want to create a simplified, faster and more efficient planning system that still reflects the loud voice of local people having their say. It is absolutely right that more small and medium-sized businesses come in and that we create an environment where they might be attracted to the shared equity or ownership model. My hon. Friend the Member for Milton Keynes South made an interesting proposal that could lead us that way and we can consider it.
I am proud to have been a part of the previous Government, the Conservative-led coalition, because we were the first since the 1980s to end a term with a larger stock of affordable housing, and we are committed
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to go much further. We will deliver an additional 275,000 affordable homes by 2020, with billions of pounds of public and private investment. We will support the housing association tenant who aspires to buy their home, which was not possible before. We want to support and help the young family who sign up for a starter home—tens of thousands of people have already expressed an interest—and the couple who have always dreamed of owning their own home. Help to Buy can make the difference in their ability to move up the ladder. We will support their aspirations. We will build more homes in every part of the country, while ensuring that we build the homes that we need for the people who need them in the places where they are needed. Importantly, they must also be of the quality that we all want to see. Shared ownership has a hugely important part to play in that. I support my hon. Friend the Member for Milton Keynes South in his desire to make that point loud and clear.
5.26 pm
Iain Stewart: It has been a useful debate and I hope that my contribution and those of the Minister and of other hon. Members have been helpful in sparking some wider interest in the expansion of a concept of housing that is fundamentally sound and enjoys support across the political spectrum. The Minister rightly said that housing should be a menu of options for people. I very much hope that we may have further discussions about how to increase the visibility and effectiveness of shared ownership. I will certainly take up his invitation to discuss ideas further and to sample whatever hospitality the Department for Communities and Local Government has to offer. For now, I thank all Members who contributed to the debate and you, Mr Evans, for chairing our proceedings with such aplomb.
That this House has considered shared ownership housing.