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Westminster Hall

Wednesday 15 July 2015

[Mr Christopher Chope in the Chair]

Housing Supply (London)

9.30 am

Dr Rupa Huq (Ealing Central and Acton) (Lab): I beg to move,

That this House has considered housing supply in London.

In the 1937 novel “Coming Up for Air” by George Orwell, the narrator tells us that his neighbours all think they have bought their own homes, and remarks,

“they don’t, the building society does”.

Although it was an inter-war satire of social mores in the suburbs, many Londoners now in precarious employment and accommodation would welcome the possibility of being beholden to the building society—they may even kill to have a mortgage. As was written in the paper the other day:

“Increasingly…owning your house is the preserve of the rich. Home ownership levels in England are plummeting just as new homes are shrinking”.

That was not in the Morning Star or the Socialist Worker; it was in The Sunday Times property section. This debate is supposed to be on the housing supply in London, but it would be no exaggeration to say that it is on the housing crisis in London, as that is what we now face.

I will base my observations on having been the MP for Ealing Central and Acton since May and having lived in Ealing since 1972. The seat is mixed in terms of tenure and nature, and spans urban and suburban densities. There are multiple issues relating to housing in London: the first-time buyer market and the resulting so-called generation rent; the numbers of young people living in shared houses, or even with their parents, right up to their 30s; the ability of councils to build houses with proceeds from sales; the disastrous new right-to-buy policy; the axing of Labour’s decent homes standards; the changing definition of affordability; and the dwindling number of key workers in the capital.

Housing is a vital issue everywhere, but in London the scale and gravity of the crisis—acknowledged by the commitments to build more houses in all parties’ manifestos—is particularly pronounced. Meanwhile, in popular mythology, everyone in London is living on caviar, quaffing champagne and Pimm’s, and the streets are paved with gold. According to Land Registry figures, London continued to see the highest price rises in the country. In March, prices rose by 11.3% to an average of more than £462,000. The rise was 5.3% nationally, with the average property price a much more modest £178,000. So London is different.

For my constituents, the average property price is now £535,319—17 times their average annual take-home pay of £31,000, according to the National Housing Federation. We also have the dubious distinction of being the constituency with the third highest number of private renters and of having the highest private rents in a marginal constituency, according to Shelter’s pre-election report. Among other things, that report found that 0% of housing

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in my constituency is affordable for a typical young couple, that it takes 28 years to save for a deposit and that private rents went up by 14.2% in one year. It is no wonder that only 50% of London’s households are owner-occupied, compared with a national average of 64%.

The average age of an unaided first-time buyer in London is now 37, so my first question for the Minister is: what does he predict it will be by the end of his party’s term in office? Will we soon be “Turning Japanese”? In that country, people bequeath mortgages from generation to generation.

Mr David Burrowes (Enfield, Southgate) (Con): I congratulate the hon. Lady on securing what is an important debate for all those across London who are concerned about this No. 1 issue. Will she be speaking about some of Ealing’s significant housing regeneration schemes, which are making people in other parts of London very jealous?

Dr Huq: Yes, I will come on to some of the more noteworthy schemes in the constituency—just hang on in there and I will get to that.

I do not want to brand all private landlords as neo-Rachman rogues. According to the post-2015 election Register of Members’ Financial Interests, 142 MPs declared rental income under the category for land and property in the UK and elsewhere, in which annual rental income that exceeds £10,000 must be declared. That is 22% of MPs—just over one in five. There must be some decent ones among them.

It seems illogical that nine out of every 10 pounds spent on housing in this country goes on housing benefit, including for properties that went into private hands under the right to buy and are now rented back to councils as emergency accommodation to combat homelessness, which we have seen manifested in mushrooming night shelters, soup kitchens and food banks across the capital. Although red tape is often condemned and flexibility championed, I am proud—despite Labour losing the election—to have stood on a platform of reining in the violent price rises that lead to instability for tenants. We also need minimum standards, not only for tenants but for the letting agencies that can charge sky-high fees, in the hundreds of pounds—I have never understood what for; a couple of references, if that.

Renting is no longer just a transitory stage for people in their 20s; it is the new normal, and it is becoming routine for people further up the age scale, including many professionals in my constituency. A new staffer started with me the other day. He is in his 20s and on good money, but he is sharing 12 to a house, with a shared sitting room and kitchen. At that stage of life, “Who Stole My Cheese?” should not be a way of life, and there are older people than him in the same situation.

I am now in my 40s and first bought, pre-boom, in the 90s, but it seems that people a bit younger than me or who were not as quick to buy have missed the boat. That includes people with kids. I see them every day on the school run, and they are quivering at the prospect of the landlord selling off the property any minute, meaning that they will have to move on and find new schooling for their kids. For the people who did not buy, it seems that the generations before have benefited from rising equity and pulled the ladder up behind them.

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In his new book, “Injustice”, Professor Danny Dorling says that in 2015, the combined value of houses and flats in the London boroughs of Kensington and Chelsea, and Westminster is worth more than the entire annual product of Denmark, the world’s 35th largest economy. That is a stark reminder of how London is different, and that applies to the suburbs too. The road where I grew up was not built for rich people. Opposite us lived Mr and Mrs Cotter—this was the ’70s: we did not know people’s first names—a postman and a dinner lady with two kids. Yesterday, I googled our old postcode, W5 1JH. No properties were for sale there, but all the homes on the neighbouring Greystoke estate, which are largely semis, were worth slightly plus or minus £1 million. There is no way that a postie and a dinner lady could afford to live in that road now—indeed, no public sector worker could afford any house in any part of my constituency on the open market.

The other day, I met our local chief superintendent, who told me that 60% of Met officers now live outside the M25, far removed from the communities they serve. Every school I visit locally tells me that it can get young teachers in to train, but as soon as they want to settle and put down roots, they are lost to Slough or beyond, because housing in west London is too prohibitively costly for them to stay.

The current Mayor of London, the hon. Member for Uxbridge and South Ruislip (Boris Johnson), is notable by his absence—where is he when you need him? I have had my brushes with him, it must be said, but it was he who claimed that not only property prices but benefit changes in this city were causing “Kosovo-style social cleansing”. Those are not my words; they are his. What steps is the Minister taking to reverse the trend of a growing proportion of London’s key workforce, be they in public services or other employment, being left behind and pushed out?

In an attempt to bring down the housing benefit bill, last week’s Budget effected a raid on housing associations and registered social landlords, whose properties look set to be sold off and whose revenues will be raided, stopping them from building more houses. The little social housing that we have will dwindle, and the policy is being funded by the sale of the so-called most expensive social housing properties in those boroughs. Were that to happen, it would lead to the total decimation of all housing stock in most of zone 1.

Jeremy Corbyn (Islington North) (Lab): Is my hon. Friend aware that my borough of Islington has a good record of building new council houses to a high standard? We have just completed an excellent development on Caledonian Road of 25 first-rate flats. If the Government’s policy goes through, they will all be sold and not one person on the housing waiting list or in housing need will get them. They will just be sold on to the private market and rented out privately. Does she agree that that is a scandal?

Dr Huq: I thank my hon. Friend for his intervention. It sounds like good things are being done in Islington, but they are being stifled by central Government. If only everywhere could be like Islington. With his leadership bid, maybe we could roll out the Islington model more widely.

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A residential research report from JLL states that a fifth of women and a third of men aged from 20 to 34 are still living in their parent’s homes in London. They have been termed “the boomerang generation”, and there is academic research showing that this is causing redefined roles between adults and identities and intergenerational conflict, because it creates a dependence model. Before becoming an MP, I was a lecturer at Kingston University, and a lot of people among the student body there were not even boomeranging away from the parental home to boomerang back to it. The combination of tuition fees and the economic slowdown means that they do not even leave to pursue their education in the first place, so we are starting to resemble France, where people tend to stay local for university. Lord Kerslake has stated that

“Londoners are missing out on opportunities: delaying having families, being forced to rent for longer and many are locked out of home ownership completely.”

Housing is not just about bricks and mortar; it is about resilient, ideally mixed communities, and its affordability is key to unlocking this city’s full potential.

I was asked earlier about developments in my constituency. On the eastern edge is Old Oak, the super-development zone that we are promised, with 24,000 dwellings coming on stream, but most of these properties will be out of reach for most of my constituents. Can the Minister say what is being done to change the definition of affordability from the current Mayor of London’s reckoning of it as a whopping 80% of market rate?

The word “crisis” tends to be one of the most overused in politics, but right here, right now in this city, it is justified. It is not hyperbole; it is reality. London’s population is set to expand to 10 million in the next 15 years. The suburbs were once seen as the solution to our social ills—combining the convenience of city working with the values of a rural idyll; positioned between concrete jungle and village green—but even these districts at the edge of our city are now suffering with out-of-control house prices, and they are spawning these unsafe beds in sheds. The saying was meant to be that an Englishman’s home is his castle, not his shed—leaving aside the implied sexism of that phrase.

Only a massive house building programme can solve the problem, and that is something that, I will admit, successive Governments have failed to undertake. The coalition Administration concentrated on developer-led, private homes, rather than social housing and mixed communities. The cuts to tax relief for landlords in the Budget sounded laudable, but what happened to the promised neo-garden city movement? I do not hear so much about that anymore.

We need to ensure that we do not lose people to Slough, Milton Keynes and Luton. We need to reverse the brain drain away to other global cities, which will see this city hollowed out by all the Old Oaks of this world and other developments in my constituency. Indeed, there is one by the railway tracks at Ealing Broadway—Dickens Yard—where new two-bedroom flats cost £1.2 million. Needless to say, the lights are always off, because absentee purchasers snap them up as investment vehicles rather than as a roof above their head. I imagine that the Minister will say, “It’s all devolved in London,” but will he agree to include in his next housing Bill a power to let councils ban overseas and off-plan sales, to ensure that first-time buyers in London at least have a chance?

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Mike Gapes (Ilford South) (Lab/Co-op): Is my hon. Friend aware that much of this overseas purchasing involves dodgy money from Russian oligarchs and elsewhere, and that house prices in our city are being pushed up by criminal money and criminal enterprise? Is it not time for the Government to clamp down on Russian oligarchs, or are they too dependent on funding from connected people?

Dr Huq: My hon. Friend makes an excellent point. Those dodgy people do need to be clamped down on. It would be a nightmare if London became just a playground for oligarchs, which is the way things are going.

The start of a new term in Parliament marks a natural punctuation point for new thinking. Will the Minister look towards alternative solutions such as co-operative housing? In 1997, Tony Blair stated that the main issue was “Education, education, education.” In 2015, it must surely be “Housing, housing, housing.” According to Ipsos MORI, 28% of Londoners rate housing as their main concern, compared with 13% nationally. This is a timely debate, and I look forward to hearing contributions from my fellow Members, as well as from the Minister.

9.46 am

Stephen Hammond (Wimbledon) (Con): I thank the hon. Member for Ealing Central and Acton (Dr Huq) for securing today’s important debate. She was right to make the point that all parties stressed in their manifestos the need for extra housing. That need is clear in London, the population of which is growing faster than anywhere else in the country and at the fastest rate in history. The official 1939 population peak of 8.6 million was surpassed earlier this year. The projection for 2020 is 9 million, but Members present, most of whom represent London constituencies, will recognise that a huge number of people are missed when data are collected; the figure is perhaps rather closer to 9 million, if not larger, already. It is therefore right to concentrate on housing in London.

It is also right, as the hon. Lady said, that general elections mark a punctuation point, allowing us to consider what we should be doing in the future. They also provide a chance to ensure that we recognise exactly what is being done already. Some of the likely developments have already been set out, and that will continue under this Government in London because we were elected.

The housing strategy, as set out by the Mayor of London, must undoubtedly consider not only the private sector, but other sectors across the market. It is also clear that, under this Mayor, more houses, particularly in the social and affordable housing markets, have been built than ever before—[Interruption.] It is all very well to shout “rubbish” from a sedentary position; some Members may not want to hear the facts. Under the mayoral programme, which set out to build 100,000 affordable homes over two mayoral terms, 94,000 affordable homes have been delivered since the Mayor was elected. He is on course to deliver 15,000 more over the next two years.

Ms Diane Abbott (Hackney North and Stoke Newington) (Lab): Does the hon. Gentleman accept that the Mayor of London’s definition of affordable housing is such that it is beyond the pockets of most of the people represented on these Benches?

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Stephen Hammond: I do not accept that. The market has various sections, and affordable homes are clearly aimed at a particular section. The strategy that the Mayor claimed to be able to deliver is being delivered. He is investing £1.25 billion in the supply in London, which will lead to another 42,000 homes being provided between now and the end of 2018. Such allocations of money will support the delivery of homes on the scale announced for the next two years.

No one is suggesting that we do not need to build more houses, and in all areas of the market, but we need to be clear about what is already being done. The affordable homes scheme is delivering more affordable homes in London than ever before. Furthermore, the Mayor’s First Steps strategy, a single brand for shared ownership products throughout London, is clearly part of an ambition to deliver a number of homes in the capital, doubling by 2025 and helping about 250,000 Londoners into home ownership. That will make a significant impact on affordable home ownership, ensuring that 36,000 more affordable homes in London will be coming through, and have been built in the past five years.

The biggest issue in London is the cost of a home and how that cost starts: with the basic cost of land. One of the major promises that the Chancellor of the Exchequer and the Mayor, the hon. Member for Uxbridge and South Ruislip (Boris Johnson), set out in February this year was the London land commission. Members on both sides should be standing up to welcome the fact that we are bringing into use public sector land that is not being used operationally.

Mr David Lammy (Tottenham) (Lab): It is fantastic to have a land commission bringing public land into use, but not if such land continues to be sold off to the highest bidder. Scotland Yard has been sold off for penthouses. Can the hon. Gentleman understand the outrage in London when no affordable homes are built?

Stephen Hammond: I would have listened more carefully to the right hon. Gentleman’s comments had he not said that no affordable homes were being built—that is simply not true. As I have already laid out, 15,000 will be built this year in London. Clearly, the Mayor is delivering.

The sources of land and the value to the public sector— how the land and different elements of it are used—will vary, but the London land commission has an opportunity to bring land into use for home ownership of all types throughout London. Significant tranches of land are involved. Transport for London, for example, has 568 designated sites where non-operational land could be brought into use; 98 of those are ready to be rolled out pretty much immediately, according to the TfL development director, Mr Craig.

We should not squander the opportunity, which is significant. Such land has involved work in London’s east end and the Royal Docks; we have already mentioned Old Oak Common. We should also consider the potential that the Mayor has given in the money allocated—not only to land, but to the new housing zones, which are an initiative to accelerate housing developments in areas of high potential. Last year London boroughs were invited to participate in a programme, and I am delighted that my borough will be seeking to participate. The programme

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is likely to deliver a significant number of homes across the borders of my constituency and that of the hon. Member for Mitcham and Morden (Siobhain McDonagh). Those will not only be affordable homes, but homes in the social rented sector as well as in the private sector.

Andy Slaughter (Hammersmith) (Lab): It is good of the hon. Gentleman to read out the Mayor’s brief, but that is just utter fantasy. The hon. Gentleman mentioned Old Oak Common and TfL, but the largest TfL site is in my constituency and no social rented homes are going in those places. The limits for income have just been put up to £85,000. That is not building for Londoners; it is building for oligarchs.

Stephen Hammond: I am not just reading out the Mayor’s brief; I have a panoply of things in front of me. Opposition Members will undoubtedly read out the Labour party prepared brief in a moment. I am happy for anyone to inspect my things—no brief talks about the TfL numbers, because I personally researched them. I know that those numbers are there and that they are possible. A number of sites of varying size can be brought back into all sorts of home ownership. Some of that will be affordable housing and some social renting—[Interruption.] As my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) rightly points out from a sedentary position, when it comes to Old Oak Common, we cannot yet be sure—the potential is there for at least 24,000 homes, but the mix is not yet certain.

Clearly, there is a housing supply problem in London—[Interruption.]It is not right to say that the Government are doing nothing; the Government are doing a huge number of things, supporting the Mayor in London. Labour Members might not like this, but the reality is that in the Labour party’s 13 years of office, almost no council houses were built; in the past five years of the coalition Government, twice as many were built. [Interruption.] It is no good Labour Members shaking their heads: the numbers are there—that is absolutely true. Despite Labour cries, it is Conservative Members and their Government, with the support of a Conservative London Mayor, who are taking the action to deliver the housing that Londoners need.

9.56 am

Mr David Lammy (Tottenham) (Lab): I am grateful, Mr Chope, to have the opportunity to speak, although I will not speak for too long as many colleagues want to get in. I will concentrate on a few points that would change the situation for many people.

Right from the beginning, we must say that there is a big difference of opinion about what is affordable. Frankly, it is not acceptable for the hon. Member for Wimbledon (Stephen Hammond) to use the word “affordable” and not accept what has already been said: that 80% of market value is not affordable for Londoners, who have average earnings of £32,000 a year when the average property in London costs £470,000. It is also not acceptable for the hon. Gentleman not to understand and to say nothing in his contribution about the concept of council or social rents. Most Londoners find themselves in an overheated market, so they want to see affordable social or council rents. That is the dispute.

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Other difficult issues face the city. There is deep concern about another word used by politicians that is coming to mean very little—“viability”. It is used too often by developers and local authorities, including Labour ones—this is not a partisan point—to say that the proportion of affordable homes on a development will be low, and that is using Boris’s definition of affordable. That is why two weeks ago I rejected a plan in my constituency to turn a police station into flats, given that only 14% of them were to be affordable. That is not acceptable when public land is involved.

The hon. Member for Wimbledon shouts about the land commission, but he needs to understand that it means nothing if it amounts to the selling off of public land, to which taxpayers have contributed over so many years, to the highest bidder and moving it from public to private ownership. That is not acceptable. It must be fought and stood up to in this city.

Stephen Hammond: What is equally not acceptable is to mischaracterise the situation. A huge number of Londoners want to get on the housing ladder, and some of the housing now being provided represents exactly that sort of opportunity. We are not talking only about social rents and affordable housing; some of the opportunities enable young Londoners to get on to the housing ladder.

Mr Lammy: Do the maths: the average house costs £470,000 and the average salary is £32,000. With loans at three and a half times a person’s salary, many Londoners will not be able to get on the ladder. People are therefore looking for a Government and a Mayor who have something to say about social housing. What this Government are saying about social housing is, “We are going to extend the right to buy even further and take even more property off the ladder.”

Jeremy Corbyn: Before my right hon. Friend gets fully into the issue of social housing, he must be aware of the problems of the permitted development rule, by which any industrial or office premises can be converted into private sector housing with no need for planning permission and therefore no control whatever over the kind of property put there. That is yet another example of missed opportunities: good quality council housing could have been provided but instead there is very expensive, upmarket private rented stuff.

Mr Lammy: I am grateful to my hon. Friend for raising that point. We need homes, but not at the expense of business and industry in this city. Of course, these are developments of homes with no infrastructure or support. Office space and facilities are dwindling in the city of London. Again, the hon. Member for Wimbledon had nothing to say about that.

There are some things that need to happen. We need a redefinition of affordability. We should make the plans that developers put forward for public land transparent and open. All of the accounts of viability on public land should be available to the public, so that they can interrogate whether the proportion of affordable homes is in fact fair.

We also need a degree of rent stabilisation. The vast majority of people moving into homes in London this year are not buying their own homes, but are in the private

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rented sector. Rents are soaring—in the past two years they have gone up by 20% in the London borough of Haringey and 40% in the London borough of Richmond. Given those soaring rents, does the Mayor have anything to say about the private rented sector? No. He has nothing to say at all. He has nothing to say about the licensing of landlords. A mother came to see me two weeks ago. She was fleeing domestic violence, and was sleeping in a friend’s hallway with her three children. That is what is happening in London’s private rented sector.

Where is the plan for the licensing of landlords and what do the Government have to say about overheated rents? If Angela Merkel can run on rent stabilisation in her country and Mike Bloomberg can run on rent control in New York, why is this brand of conservatism so extreme and so set against that?

Mr Burrowes: I will give the right hon. Gentleman one example. What about the London Housing Bank using loans of up to £200 million to ensure that there is affordable rental accommodation? That is an example of a one nation Conservative Mayor tackling the issue of affordable rents.

Mr Lammy: I am afraid we have come back to the original debate about what is in fact affordable. Too many people are not seeing that affordability.

I suggest that we create a new vehicle—a Homes for London agency. The Government are set against any borrowing, but it is important to understand that a large part of the problem in London has been caused by the entire withdrawal of public grant to build homes in the city, amounting to £4 billion lost from this Government. That has to be replaced somehow. A new agency in London with a triple A rating could go to the bond markets and raise money against gilts, as Transport for London does. That would get us to a £10 billion fund—we will need a fund of that size if we are to make a difference. It is not about Government borrowing but a vehicle in London that can do something.

We need some kind of bond system to raise significant money for building social and council homes. We need to redefine affordability. We need rent stabilisation—every major city in the world understands that overheated rents lead to chaos and overcrowding; in some cities, such as Paris, they have led to riots. It is also important to hear what is being said in communities about estate regeneration.

Ms Abbott: When my right hon. Friend talks about rent stabilisation, does he mean rent control, and does he see there being a difference?

Mr Lammy: I am against setting up a 1970s-style bureaucracy to impose rent control. I am for a rent cap, linked to interest rates, to ensure that our more excessive landlords are not able to drive up rents in the way that we are currently seeing. That model would require much less bureaucracy. It seems to work, in continental Europe in particular, and we should adopt it. It is the one that our party had in our manifesto at the last election, and I thought we had landed in the right place.

Finally, there is the issue of brownfield land—this relates to what my hon. Friend the Member for Islington North (Jeremy Corbyn) said about permitted development. If we stick to the idea that all our solutions can be built

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solely on brownfield land, we will end up driving out business and industry, and building solely upwards. I suspect that absolutely no one in this Chamber lives on the 22nd floor of a development, particularly if they have kids. In the 1960s and 1970s, we built things all over London that people simply do not want to live in. There is a real danger that we will do that again. We need some mechanism for green belt review.

A lot of the green belt is not green; it is car parks, quarries and waste land. Using just 3.6% of the green belt would let us build 1 million homes. In the London area, having the outer boroughs make a contribution with redesignation would get us much further along in this journey. The vast majority of housing being built is small—in fact, tiny—two-bedroom flats. That does not help the families in real need in this city.

Several hon. Members rose—

Mr Christopher Chope (in the Chair): Order. I intend to start the wind-ups at 10.30 am, so I appeal to Members collectively to exercise some self-regulation.

10.7 am

Mr David Burrowes (Enfield, Southgate) (Con): It is a pleasure to serve under your chairmanship, Mr Chope. I welcome the debate secured by the hon. Member for Ealing Central and Acton (Dr Huq).

All Members present, representing areas of London both north and south, agree that housing is the No. 1 issue and one we need to debate more. I do not want to take up too much time, because I do not want to interfere with what has been, in many ways, a Labour London mayoral hustings. Although Labour nationally and in London should be doing a lot of soul searching, there also needs to be some honesty. There has been none yet in the leadership hustings, so perhaps there will be some in the Labour mayoral hustings.

We have heard the usual pejoratives about the rich coming over here and taking up all the London property, as well as the usual mantras about rent caps and controlling the market. We have also heard—with a shudder, certainly in my constituency—an attack on the green belt. People will be rushing to their local plans to make sure that there is proper protection for their local area. We must make sure that those decisions are made locally.

Let us have an honest debate. Let us recognise that there has been a 30-year failure by Governments to provide sufficient housing in London, and that there is blame on all sides. Let us also recognise that the Mayor and the Government have made great strides. Despite coming through a great recession, we are now able to seek to realise our ambition of doubling house building. We do not need a mayoral briefing, or any other briefing; we can look at the National House Building Council statistics: in 2014 there was a 10% increase in new housing registrations, at 28,733, up from what had been a record figure in 2013 of 26,230. We can all look around our constituencies and say that a lot more is needed, but there has been progress, which should be welcomed.

Also to be welcomed is the ambition to build 22,000 new homes. We have not seen anything like that since the 1930s. I am proud to be a Conservative and a Member of a one nation party and Government. We have a great

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history of leading revolution in house building. Together with the Conservative Mayor, we are starting to get there.

This debate is about affordable housing in all its forms, but it is also about rents. We have not yet mentioned the Mayor’s strategy, which is about ensuring that we build purpose-built rental property to have an affordable rental market. I referred to the housing bank, which provides £200 million of loans. Affordable rental properties are an important element of the market.

We also need to recognise that many of our constituents cannot get on to the housing ladder because they cannot afford it. Young professionals cannot get on to the ladder. We need to build affordable housing.

Helen Hayes (Dulwich and West Norwood) (Lab): Does the hon. Gentleman agree that the definition of “affordable” housing is a material consideration that makes a difference to the meaning of the word?

Mr Burrowes: It does. I will talk about Enfield shortly, where some of the affordable housing that is being built is genuinely affordable. Meridian Water, which is alongside the constituency of the right hon. Member for Tottenham (Mr Lammy), will provide 5,000 new homes and is a huge opportunity to provide genuinely affordable housing as part of a mix. There needs to be a mix. We also need to focus on shared ownership to help people to get on to the ladder. We need to do more to encourage the First Steps programme, which my hon. Friend the Member for Wimbledon (Stephen Hammond) mentioned; as he said, that should double in scale. Shared ownership is important and should be a priority. We should call on housing associations to encourage shared ownership of their housing stock, rather than seeing it as an add-on or a subsidy for the rental market.

I did not hear the hon. Member for Ealing Central and Acton say anything positive about regeneration, even though there has been significant regeneration in her constituency. This week, a £55 million regeneration project was announced. On my patch in Enfield, Meridian Water is a huge opportunity to build 5,000 homes and create thousands of jobs; crucially it is linked to the transport infrastructure changes that are needed to transform the Lee Valley area. That is important.

The 20 housing zones are producing life-changing opportunities. We need more, and across London we should welcome them. London leaders do welcome them, but the Opposition seem not to.

Dr Huq: When new housing starts at £1.2 million, how does the hon. Gentleman square that with the fact that there are 13,000 people on the council waiting list in Ealing borough; there are only 700-plus properties whose leases turn over each year; and there are 250,000 people on the waiting lists in London? The stuff being built is not appropriate to those people.

Mr Burrowes: I agree, and the challenges in Enfield are similar to those in Ealing. I will not put my head in the sand and say all is rosy out there; I want to challenge the Government on some aspects. The plan for the redevelopment of the Ladderswood Way estate, which was put together by a Conservative administration and

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is now being carried forward under the Labour-run council in conjunction with the Mayor and the Government, will create 500 homes by 2018. Crucially, it needs transportation links, but opportunities are literally coming down the tracks—Crossrail 2 will be important for the New Southgate area. Opportunities are being harnessed, not least by the London land commission, to draw together everybody who is interested in public land and get them to work together in more co-ordinated way, which has not happened previously. All those things are important.

The London land commission was launched on Monday, so these are significant times. We need additional investment, and I look forward to continued support being announced in the autumn statement. City Hall, central Government and London boroughs are coming together to lock in surplus public land for housing, but we need cross-party support. Sir Steve Bullock, the Mayor of Lewisham said,

“It is vital that our overall strategy to tackle the housing crisis delivers an increase in affordable homes for ordinary Londoners.”

That is important, and we should all welcome it.

The hon. Member for Ealing Central and Acton asked about garden cities. In London, it is about garden suburbs. In Barkingside, the local development plan includes building 11,000 homes and five schools and providing 65,000 square metres for employers and community space. That is to be welcomed.

Right to buy will be coming through in the housing Bill. I support the principle of right to buy—people should have the opportunity to own their house—but the reality is that the majority of high-value council houses are in London, so the eyes of the rest of the country will be on whether the right-to-buy scheme is being subsidised through London housing. We need to the challenge the Minister on this. My constituents would not want the receipts from properties rightly bought by tenants of housing associations to go north of the M25.

Keir Starmer (Holborn and St Pancras) (Lab): May I inject a bit of reality on that point? In my constituency, there are 4,800 children living in overcrowded conditions on the housing register. I have had half a dozen advice surgeries since I was elected and half the people who have come to see me are concerned about serious overcrowding. The proposed right-to-buy extension will affect them disproportionately. Some 37% of housing in Camden will fall within the higher value bracket and thus will be sold off at the very time that people in Camden absolutely need it. It is going to make the housing crisis worse, not better.

Mr Burrowes: I understand the hon. and learned Gentleman’s concerns. It will work if we increase the number of homes, and the way to do that is to ensure, in the spirit of localism and devolution, that London gets the receipts of the sales. If, as I suggest, we build two houses for every one sold, we would deal with the concerns about overcrowding and waiting lists in the hon. and learned Gentleman’s constituency and mine.

There is another issue on which London councils need to work better. Particularly in Ealing and Enfield, people are coming up from inner-city boroughs and are being placed temporarily in cheap accommodation. There are not only the costs of the accommodation, but social care costs. Children in care have an associated budget,

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but children in need have lots of associated costs. London councils need to work much better strategically to ensure that Enfield is not picking up the bill for residents of other boroughs. We need to work much better on that to ensure that Enfield, which does not have a properly fair funding formula and settlement, does not have to deal with that impact.

There are lots of other mayoral candidates and others who want to speak, so I will not go on for much longer. I will conclude by saying that we are a one nation party with a great history, not least on building housing.

Tulip Siddiq (Hampstead and Kilburn) (Lab): Will the hon. Gentleman give way?

Mr Burrowes: I will not. There are too many candidates who want to speak.

The litmus test of a one nation party and Government is how we deal with the housing crisis. In London, we need to ensure that we continue to build more housing than ever before for the benefit of all Londoners.

10.18 am

Jeremy Corbyn (Islington North) (Lab): The length of the speech of the hon. Member for Enfield, Southgate (Mr Burrowes) proves the failure of self-regulation in the House of Commons and, indeed, anywhere else. I will genuinely attempt to be as brief as possible.

There is an enormous housing crisis in London, and it is getting worse. Someone walking around the streets of London on any night will see the number of people now sleeping rough, without benefits and begging. Every day, people are being evicted from the private rental sector to make way for somebody else moving in on a still-higher rent. There is something brutal and unnecessary about the way in which many people in this city have to live.

The abject failure of Government policy to address the issues of housing in London is making the situation worse and worse. Nothing that the Government have proposed since they were re-elected in May is going to do anything to alleviate the crisis facing large numbers of people in London.

First, there is the idea of cutting most local authority tenants’ rent by 1%. I have no particular problem with that, but I hope that the housing revenue account will be compensated accordingly by central Government; otherwise, it will lead to an investment problem in the future. Then there is the bizarre idea, which I suspect is a Trojan horse for changing the whole local government rent regulation system, of charging market rents for those earning not very high incomes—median incomes. I was talking last night to a well qualified and experienced social worker in a London borough who is worried about applying for promotion, because success would put his salary up, which would more than double his rent. A salary increase of more than £10,000 a year would leave him worse off. That is a ludicrous situation. Council tenants should pay a council rent that they can afford.

Ms Abbott: Does my hon. Friend agree that one of the aspects of putting up council rents for people who earn a little more is that the earnings will be household earnings, which means that the rent for two people on an average salary in London will go up? Is not putting up rents in that way a tax on aspiration?

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Jeremy Corbyn: My hon. Friend is right. I hope that the Government will think this through and not introduce the regulation. It is unworkable and will lead to a lot of perverse results, unless it is a Trojan horse for something else, as I suggested, putting all council rents on to a completely market level. I suspect that that is in the beady eye of at least some in the Conservative party.

The second area of concern is the private rented sector. More or less a third of the population of my borough live in that sector, often in poor conditions. Most are on six-month assured shorthold tenancies; they have no control over the rent and, in reality, no protection against eviction. We must address the question of the quality and regulation of the private rented sector.

Tulip Siddiq: Of my constituents in Hampstead and Kilburn, 33% rent privately. Bearing that in mind, does my hon. Friend agree that we should think about a national register of accredited landlords, to weed out the abuse in the system and the revenge evictions that still happen, even though they are technically banned?

Jeremy Corbyn: The quality of management of much of the private rented sector is appalling, and the lack of regulation of letting agencies leads to many shocking cases. It is often the most vulnerable people who are victims of what happens in that sector.

The hon. Member for Enfield, Southgate was complaining about the number of people moving in to his borough from other boroughs. Indeed, people from my borough go there—they get moved there because the council has nowhere to put them in Islington. They want to come back. Often they live in poor conditions. The hon. Gentleman is right up to a point that the practice meets a need of the borough; however, it also creates a problem for the children involved. If he goes to any inner-London tube station in the morning, he will see children who travel quite long distances to attend primary school, because their family want to return to the borough they come from and hope desperately to get a council place there to move into. It is a reasonable aspiration, and one obviously hopes for success.

My final point is about sales of council properties. With a £100,000 discount, a vast amount of money is being given to the people who are lucky enough to get a council place. If a tenant of council property buys it and remains there, that does not make much difference to the overall social make-up, the housing stock or anything else; but when they decide to move on, the homes are never sold to people on the housing waiting list. They cannot be. More than a third of the council properties recently sold in my borough have ended up in the private rented sector, often for very high rents. There is something ludicrous about a council rent of £100 to £110 a week being charged for a flat when an identical flat next door is rented for £400 or £500 a week, with most of it being paid for through the housing benefit bill. If this Government deserve a prize it is for subsidising the private rental system in this country.

We need a serious, sensible form of regulation of the costs of housing and particularly the private rented sector. Average rents in Britain are more than double the average for the rest of Europe—in London particularly. We must address the issue, or this city will become even more divided. In 10 or 20 years it will resemble Manhattan. There will be a smallish number of people remaining in

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council and housing association properties in central London, and those will be the only social rented places available. The rest of the residents will be wealthy enough to buy, or to pay very high rents to live here. All the workforce will travel long distances on trains and buses to keep the city going. We should ask the London Chamber of Commerce and Industry about its concerns for the future London labour market, and we should look at the problems. We are destroying this city by our failure to build enough social housing, regulate what we have and plan for the future, other than by allowing funny money to flow in to buy up large amounts of land and property, which is often left empty and used only as a cash machine.

10.25 am

Sadiq Khan (Tooting) (Lab): There are 14 Labour MPs wanting to speak in the debate, so it is disappointing that two Tory Back Benchers spent 25 minutes this morning filibustering on an issue that is important to many of us.

There is a housing crisis. Not enough homes are being built, and those that are being built are not of the right sort. There are not enough homes with a genuinely affordable rent—a social rent linked to earnings rather than market value. There are not enough homes being built for which people can pay a London living rent. There are not enough family homes being built, and there are too many being sold off-plan to people in Singapore, Hong Kong and Malaysia. I have nothing against those countries and the people who live there, but we cannot allow our homes to be used as gold bricks by foreign investors and to sit empty.

It is a con when people talk about the market value of properties. The Mayor has a definition of 80% of market value as affordable. The Valuation Office Agency’s private rental market statistics show that the market rent for a four-bedroom private property is £2,500; for a three-bedroom property it is £1,695; for a two-bedroom property it is £1,400; and for a one-bedroom property it is £1,155. We can see why there is a housing crisis in London, which some people do not want us to talk about in Parliament.

Ms Karen Buck (Westminster North) (Lab): On that point, does my right hon. Friend agree that that definition of affordable housing makes no sense, given that, in a borough such as mine, only a household with an income of £102,000 could reach the threshold of housing costs as no more than 40% of income? That would exclude the overwhelming majority of people in any housing need.

Sadiq Khan: My hon. Friend is right, and that is why there is a crisis. In the King’s Cross scheme, which my hon. Friend the Member for Islington North (Jeremy Corbyn) will know about, one-bedroom properties are selling at £985,000. The price for a two-bedroom property there is £1.7 million. In Heygate in Elephant Park, a studio flat will cost £569,000 and a two-bedroom property will cost £800,000. It is possible to get a penthouse at a discount, at £2.1 million. We now have a city where developments have “poor doors”. There is a door for people who can afford market value and there are poor doors for those who cannot.

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Freedom of information tribunals have shown that developers in Heygate, the Greenwich peninsula and Earls Court have taken advantage of the viability con, which means that they can say it is not viable to build affordable homes. I am pleased that my hon. Friend the Member for Islington North talked about Islington, which now has a new scheme that will be open and transparent. Developers will have to publish their viability assessments for schemes. I do not care whether we use the term “rent control”, “rent cap” or “rent stabilisation”. We need to sort out the rental market in London. More than half the disposable income of those who rent—a quarter of Londoners—goes on rent. That is unacceptable and is a reason why last year more than 60,000 Londoners aged between 30 and 39 left London. We have a brain drain from London caused by the housing crisis.

To compound that, we have—even in the words of the two filibustering Tory Members who spoke in the debate— a housing supply crisis in London. What is their answer? It is to sell off housing association properties and force councils to sell off their most expensive properties. That will lead to a situation in which good councils such as Islington and Camden must sell the new properties that they have built. Social cleansing is taking place in London; we are copying Paris and New York for the wrong reasons.

If the Government are going to force councils and housing associations to sell properties, all that we need is that they should require them to build one before they sell one, like for like in the same area, unless there are exceptional reasons not to. Then London will not become a city for the rich only, with outer London for those who cannot afford to live in inner London. Conservative Members who have spoken may think that a modern London of that kind is acceptable, but those of us who have made the effort to come to this 9.30 am debate, but did not get the chance to speak because of the disgraceful filibustering, want change.

Mr Christopher Chope (in the Chair): Order. On several occasions, the right hon. Gentleman has tested my patience by using the expression “filibustering”. Nobody in this Chamber has been filibustering and if they had been, I would have brought them to order. I think it is very disappointing that, having relied on self-regulation, that seems manifestly to have failed and I have not been able to call as many Members present whom I would have wished to. However, we now have to move on to the wind-ups, because under the rules laid down by Mr Speaker we have a maximum of 10 minutes for the SNP spokesman. I call Dr Whiteford.

Andy Slaughter: On a point of order, Mr Chope. As Chair, you are of course entirely within your rights not to impose a time limit. However, because Members, particularly on the Government side, have not shown any restraint, and given that this is the most important issue for London Labour Members and that we have come here to try and contribute, I wonder whether the Front Benchers would concede a little time to us, so that we can at least make some contribution. That would seem a fair way to proceed.

Mr Christopher Chope (in the Chair): I am going to call Dr Whiteford.

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10.31 am

Dr Eilidh Whiteford (Banff and Buchan) (SNP): Thank you, Mr Chope. I begin by congratulating the hon. Member for Ealing Central and Acton (Dr Huq) on securing the debate, which I have listened to carefully. I genuinely regret that more London MPs have not been called to speak, because I know that the contributions they have to make are worthy.

What I have heard today leaves me in no doubt about the seriousness of the housing problems facing people in this city and the failure of successive Governments to really grasp the nettle, particularly with regard to affordable housing in London. Although I represent a seat in the north-east of Scotland, I am not a casual observer of what is going on here, because, like all Members from outside London, I spend my working week here. I live in this city when Parliament is in session and I need to find a place to stay too. Even from the very privileged position that MPs have, the distortions and excesses of property prices in London and in the private rented sector in central London are more than evident.

Siobhain McDonagh (Mitcham and Morden) (Lab): Is the hon. Lady aware that part of the reason for people being squeezed out is the amount of buy-to-let landlords there are now, and that it is easier to become a buy-to-let landlord than it is to become a first-time owner-occupier? Is she also aware that by getting rid of tax relief on buy-to-let mortgages, the Government could raise £6 billion, which would be the equivalent of funding housing associations to provide 100,000 properties in our city?

Dr Whiteford: I am very pleased that the hon. Lady has managed to get those important points on the record, because they are pertinent to this debate and have not really come to the fore yet.

Prices are way beyond the purse of even quite well-paid people in London, and that is just not sustainable. The fundamental and interlinked issues at the heart of this are supply and affordability. A fundamental shortage of housing has pushed rents out of control, the consequences of which have been well rehearsed. The right hon. Member for Tottenham (Mr Lammy) made a key point by saying that someone on an average salary of around £30,000 a year cannot even dream of owning a house that costs nearly half a million pounds.

Dawn Butler (Brent Central) (Lab): The average house price in Brent is £384,000, which is 19 times my constituents’ average take-home pay of £19,937. Rent can be 78% of a constituent’s income. That contributes to the housing crisis in London. Does the hon. Lady agree?

Dr Whiteford: I absolutely agree, and I am pleased that the hon. Lady has been able to make her point, albeit quite late in the debate. It highlights the fact that the Help to Buy schemes introduced by the Government will not even touch this problem, because even with those schemes, people are completely out of reach of the market. That takes us back to the point made earlier. It is easier now for someone to have a house in London that they do not live in than it is to have one that they do. In fact, they could probably live off the proceeds of the house in London, if they could get a foothold in the market. We need a housing mix that

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includes affordable homes not only for the people who have historically lived in the area, but for those who work here in normally paid jobs, whether in the private or public sector.

As hon. Members know, housing is a devolved matter in Scotland. We have property hotspots too and inflated property prices in some parts of the country. We have also experienced a shortage of supply of affordable homes, over getting on for 30 years, and we have inherited a legacy of depleted public housing stock—

Mr Christopher Chope (in the Chair): Order. This debate is about housing supply in London. I hope that the hon. Lady will keep her remarks confined to that issue.

Dr Whiteford: I absolutely will, Mr Chope, but I think it is very important for us to understand that some of the ways we have tackled the underlying problems in Scotland might have lessons that are well worth sharing in other parts of the country. The way we have tried to tackle them is very simple: we have tried to build more houses, and our completion rates across all sectors—both private and public—have been much higher. The fundamental problem here is that we are not building enough affordable homes for people. The completion rates in Scotland across the private and the public sectors have been much higher. It is worth making that point because in London the situation is completely out of control and there are very real challenges for any Government in trying to put that right.

A key point raised today, as touched on by the hon. Member for Islington North (Jeremy Corbyn), is the issue of selling off housing association stock. It seems to me to be utterly insane. I cannot believe that any Government, with any sanity, would even attempt to do that, because if there is already a shortage of affordable housing, my goodness, why on earth would we sell off what we have? Hon. Members have made it clear during this debate that the money for which people will essentially be getting a free house could be so much better invested.

Earlier this week, I met the National Housing Federation, which was clear that it could build four houses for the giveaway that one tenant gets. Let us make absolutely no mistake about what will happen to those houses in a very short space of time: they will be sold off to tenants and, within a few years, they will end up back in the private rented sector at exorbitant rents. People will not be able to live in the houses if they are on decent salaries, and if they are on lower salaries, they will be pushing up the benefits bill yet further by having to be supported in their housing costs. The proposal does not address the underlying shortage because it does not build more houses and that money is simply not being reinvested. I wonder how many MPs are renting, in the private sector, homes that were once local authority or housing association homes that have been hived off into the private sector and are now being let at market rents that only MPs and other very privileged people can afford.

The Budget last week was terrible for housing. The point has been made about the changes to social rents. Of course, there are pros and cons to that, but one of the big problems is that it will disincentivise investment by housing association providers here in London. The National Housing Federation said in its initial analysis that it expected 27,000 fewer houses to be built because

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of the changes announced last week. That seems to be compounding the problem, not addressing it. We also need to look at whether people will be disincentivised from investing at all. The NHF told me that it already knows of one housing association that has cancelled a planned house building project on the back of last week’s Budget.

I cannot but agree with Shelter, which said that last Wednesday was

“a bad budget day for housing and those struggling with housing costs…Only if you invest in affordable homes by rebalancing investment and having a housing strategy that recognises house building, rents, benefits, and homelessness are part of the same problem, can you permanently bring down the welfare bill. If you just slash and burn benefits in the hope people in genuine need will miraculously find well paid jobs, cheaper homes or fewer children, you’re unlikely to succeed in anything but making more people homeless.”

I do not think that problem is more acute in any part of the UK than here in London, where people are often working in low-paid, service-level jobs, but are having to make long commutes into work because housing is now increasingly out of reach.

We know that if we invest in affordable housing, we can tackle the problem at its roots—that we can tackle not just the symptoms of the problem, but the underlying problem. The UK Government need to boost their funding for affordable housing throughout the UK, but I urge them to be much more ambitious. I noted Government Members’ scepticism towards the points made about selling off the housing stock, but we have heard very little about actually building new houses, and the Government’s ambitions for that are woeful. They need to be building 100,000 houses every year because of the lack of supply, and London is at the heart of that. Londoners would benefit from that, and those in average-wage or low-paid jobs would gain a great deal from it, but investment in housing would transform the lives of many people throughout the UK, and that work has to start here.

10.40 am

Dr Roberta Blackman-Woods (City of Durham) (Lab): It is a pleasure to serve under your chairmanship again, Mr Chope. I congratulate my hon. Friend the Member for Ealing Central and Acton (Dr Huq) on securing this important debate. I share her strong concerns about the urgent and growing housing crisis in our capital city. She gave an excellent review of the problems with housing in London.

It is worth putting on the record how brilliant it is to see so many Labour London MPs here for the debate, representing their constituencies. Despite the very limited time available, we managed to hear from my right hon. Friends the Members for Tottenham (Mr Lammy) and for Tooting (Sadiq Khan), my hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) and my hon. Friends the Members for Hammersmith (Andy Slaughter), for Hackney North and Stoke Newington (Ms Abbott), for Ilford South (Mike Gapes), for Dulwich and West Norwood (Helen Hayes), for Islington North (Jeremy Corbyn), for Hampstead and Kilburn (Tulip Siddiq), for Westminster North (Ms Buck), for Mitcham and Morden (Siobhain McDonagh) and for Brent Central (Dawn Butler).

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I congratulate all those colleagues on getting in key points despite limited time. Interestingly, they showed clearly how the policies coming from the Government and the Mayor of London are simply not delivering the housing that their constituents need. They raised important issues about the supply of homes, the quality of homes and delivering genuinely affordable homes. They pointed to increasing homelessness, increasing rents and the subsidy going to the private rented sector that is distorting the market, alongside the acute shortage of land in the capital and policies that will deliver additional land. That was in great contrast to what was said by Government Members, who seemed to be living in a world of housing delivery that has escaped most of us on the Opposition side of the Chamber.

Housing supply is the crux of the crisis. It is estimated that the need for additional housing in England is for up to 300,000 new units a year, or three times the current supply levels. House building has fallen to the lowest level in peacetime since the 1920s. New property listings have declined for four months in a row and have failed to show any meaningful growth for two and a half years.

London is at the heart of the supply shortage. London house prices have increased by 43% in the past five years, primarily as a result of the acute shortage. The average house price in London in 2013 was £475,000, an increase of a staggering £41,000 compared with the previous year. We are looking at a broken market that can be fixed only by bold measures to improve housing supply, particularly in London. As many hon. Members outlined, house price rises in London have outstripped wage inflation and prices have hit an affordability ceiling, with last year’s figures showing the salary to house price ratio at 14 times average wages.

Shortages are pushing up prices not only in London but in surrounding areas as the commuter belt gets wider and wider; that point was made excellently by my hon. Friend the Member for Islington North. To get affordable housing, people are having to move further and further out, often losing their connection with the borough that they want to live in and meaning that children are dislocated. The Government have not addressed that very important issue.

Ruth Cadbury (Brentford and Isleworth) (Lab): I thank my hon. Friend for raising the point about families having to move further and further away. That is not only a problem for those families because of the social pressures that they face; it also places additional pressure on outer London boroughs, which have their own problems because of a shortage of housing and pressures on the small amount of affordable and private rented housing available. We have the additional pressure of families moving from central London.

Dr Blackman-Woods: I thank my hon. Friend for making an excellent point.

The cost of renting in the home counties has risen by 5.4% in the past six months, with an estimated 47% of tenancies consisting of corporate commuters, so there is an impact on the outer boroughs and on surrounding areas as well. The poorest and most vulnerable have been hit particularly hard by skyrocketing prices as the crisis has deepened. As hon. Members have said, that is increasing the number of homeless people on the streets

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of London. The figures are shocking: 7,581 people slept rough in London at some point during 2014-15; that represents a 16% rise on the previous year. There is also a huge impact on the number of people claiming housing benefit.

Analysis published by the National Housing Federation earlier this year forecasts that a 21-year-old Londoner will have to wait on average until the age of 52 before they can afford to get a foot on the property ladder if the current price increases continue. More and more people are relying on the bank of mum and dad in order to take out a mortgage. That is increasing inequality in the city.

Worryingly, the CBI has warned that the lack of housing supply is having a massive detrimental impact on social mobility. If the only young people who can afford to live in London are those whose parents already have a home there and can remortgage it or afford to help them with rent or mortgage costs, the recruitment pool is restricted to the children of more affluent members of society. That is not a sensible policy at any level, including economically.

Even the hon. Member for Uxbridge and South Ruislip (Boris Johnson) acknowledges the need

“to double housebuilding and provide a million more homes by 2025.”

It is just a pity that he is not actually doing anything to deliver on that in London. In fact, as a great many of my hon. Friends pointed out, he is calling in planning applications in order to reduce the number of affordable housing units delivered. Again, that is in contrast to Labour councils in London, which are doing what they can—Islington is a very good example—to deliver more council houses.

The Minister has not answered a question that has been put to him on a number of occasions, which is that, given this policy—[Interruption.] No, outside this debate, but he has another opportunity today to answer the question. Because the Government are requiring or going to require councils to sell off their highest-level stock, will he insist that Islington sells the council houses that it is currently building before they are even occupied by council tenants? That very serious question needs to be addressed.

In the last couple of minutes of my speech, I shall turn my attention to some of the things that I think the Government need to do. First—this point was echoed by many hon. Members—we need a coherent and comprehensive policy to increase housing supply in London that will deliver genuinely affordable houses in communities that people want to live in, with the associated infrastructure and services that are necessary. They do not want to be surrounded by buildings that are empty because the homes have been sold to overseas investors.

Andy Slaughter: My hon. Friend is absolutely right. From her previous comments, is it not clear that the Government are not only not taking the action that she proposes, but actively making the situation worse? Forcing the sale of a third of council properties means that the only affordable source of accommodation is being run down and will not be available for people in housing need.

Dr Blackman-Woods: Indeed, and it is to addressing that housing need that the Minister must turn his attention.

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10.50 am

The Minister for Housing and Planning (Brandon Lewis): It is a pleasure to serve under your chairmanship, Mr Chope. I congratulate the hon. Member for Ealing Central and Acton (Dr Huq) on securing the debate. We recognise that there is a huge demand for housing in London and there is a real challenge for the Government and the Mayor, who has set himself a significant challenge to meet the needs of the growing population in this hugely important world city. London is an economically important and vibrant place to live and work, and it is crucial that we ensure that the housing market works well.

It has been interesting this morning to listen to a mixture of mayoral and leadership hustings, as well to quotes from George Orwell. I assume that the hon. Member for Ealing Central and Acton, who quoted one of my favourite authors, will therefore want to support things such as right to buy and the starter homes package, despite the opposition of her Front-Bench team. She has outlined her desire to see more home ownership, which is something that both schemes will deliver.

We have introduced a range of measures to get Britain and—working with and supporting the Mayor—London building again, to fix the broken housing market and help hard-working people to get the home that they want.

Stephen Hammond: Does my hon. Friend agree that the Mayor’s task has been made even more difficult by the fact that he inherited a situation in 2010 in which housing stocks were at their lowest level since the 1920s? Council house building was less than half what it has been during the coalition period.

Brandon Lewis: My hon. Friend makes a good point. I find it ironic, to use parliamentary language, that the Labour party makes the case for house building while seeming to forget that it left us with the lowest level of house building since, I believe, 1923, as well as a reduction in the number of social homes. The coalition Conservative-led Government built more council-owned homes than were built during the entire 13 years of Labour.

Dawn Butler: Will the Minister give way?

Brandon Lewis: I will not give way at the moment, because of the time restraint.

Since 2010, we have been able to deliver more than 260,000 affordable homes in England, including more than 67,000 in London alone. We have exceeded the target that we set ourselves for the period to 2015, and we will not stop there. We will ensure that we deliver another 275,000 affordable homes by the end of this Parliament. That is the fastest rate of affordable house building in more than 20 years, and it will benefit communities across our country.

The constituency of the hon. Member for Ealing Central and Acton will benefit hugely from the resulting housing regeneration. Early work has shown that Old Oak Common alone could result in the development of up to 7,650 affordable homes, and we recognise that high earners in social housing should pay their fair share. That is why last week’s Budget, which some hon. Members who have spoken today have clearly not yet read, not only included our commitment to protect

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social tenants in England from rising housing costs by reducing their rents by 1% a year for four years, but will ensure that high earners who live in social housing are not being unfairly subsidised at the taxpayer’s expense.

Helen Hayes: Although the announcement of the 1% reduction in social rents will be welcomed by tenants, it will leave a £16 million hole in Southwark Council’s housing revenue account. Can the Minister give us an assurance that that money will be replenished by the Government to enable Southwark Council’s continued investment in affordable housing?

Brandon Lewis: I would like to see Southwark Council go further in developing more homes and using some of the £21 billion of reserves that councils have built up over the last few years. We are determined to make sure that tenants get a fair deal, particularly where social housing costs have increased at almost double the rate of the private rented sector over the last few years. We are committed to supporting the aspiration of ordinary hard-working people who want to own a home of their own. That is why we will deliver 200,000 starter homes over the course of this Parliament, at a 20% discount on market value.

Andy Slaughter rose—

Ruth Cadbury rose—

Brandon Lewis: I will not give way at the moment.

A Help to Buy ISA will help those saving for a deposit to have a better chance of owning their own home. The Help to Buy schemes have already supported a total of 210,000 households since 2010 with the measures we have taken. We intend to go further. We will do more to help people reach that aspiration of owning their own home. We will work to deliver that for 1.3 million housing association tenants, supporting their desire to own their own home and making sure that at the same time we are boosting the housing supply in this country.[Official Report, 7 September 2015, Vol. 599, c. 1-2MC.]

Hon. Members mentioned private sector rates in England as a whole, which have been rising at less than inflation during recent years. We need to make sure that good standards are met, and we are taking steps to improve quality and choice in the sector. That is why we have established a fund to deliver a further 10,000 new homes. We will continue to improve the sector’s professionalism and to make it even more attractive to investors, to deliver more homes. We have taken action to tackle bad landlords so that they either improve or, preferably, leave the sector. That is why I support what the Mayor of London is doing with the London rental standard. We have published the “How to rent” guide and the “Renting a safe home” guide to help tenants better to understand their rights and responsibilities.

Opposition Members have talked about different forms of rent control and tried to argue that they are not rent control as any of us see it. If it looks like rent control and it smells like rent control, as the electorate made clear in the general election this year it is rent control—something that the Labour shadow Secretary of State has already said does not work and will not work. Experiences elsewhere have proven that, and we will not do it.

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We are also facilitating new ways of regenerating inner-city estates, as we have seen at City Mills in Hackney. We are looking to kick-start more work to deliver more homes. We believe that we can deliver more homes on brownfield land without adopting the plan of the right hon. Member for Tottenham (Mr Lammy) to build across our treasured green belt. We expect to bring more than 134,000 more homes up to the decent homes standard, including around 55,000 homes in London alone. We will be investing a further £160 million to ensure that by April 2016, no more 10% of stock in each local authority does not meet that standard, and £145 million has been allocated to London.

We have, as hon. Members have pointed out, brought forward permitted development rights to get better use of existing buildings, particularly unused office space. There have been 25,700 permissions for home extensions and office-to-residential conversions to date.

Dr Huq: Will the Minister give way?

Brandon Lewis: Not at the moment.

That is 25,000 more homes for people in London who need them, and I am disappointed that Opposition Members seem to want to prevent Londoners from accessing those homes. That is part of a radical package of planning measures that the Chancellor announced at the Budget last week, including extending the Mayor’s powers to ensure that further work can be done strategically in London to deliver the housing that we all want.

Our new measures will help London to build up, in addition to other building, rather than building out and touching on the green belt that Opposition Members seem so keen to deliver on. We want to deliver more homes for Londoners while protecting that important countryside, which is what residents want. Alongside our planning measures, we will invest £1.3 billion up to 2020 to unlock and accelerate development on large housing sites that are struggling to move forward. We have released enough public sector land to deliver more than 100,000 homes, and we will deliver another 150,000 during this Parliament. Our Get Britain Building investment fund of £500 million will support almost another 10,000 homes.

We are working with the Greater London Authority to support regeneration in Brent Cross to deliver another 7,500 homes, and we are providing £7 million of revenue funding to the GLA over this Parliament to support the delivery of the Croydon growth zone, which will enable the creation of another 4,000 homes and 10,000 jobs. We are engaging locally led development in the form of garden cities. There are several already across the country, including Ebbsfleet, near London.

I look forward to the hon. Member for Ealing Central and Acton encouraging areas such as hers to deliver more, and we will work with them to do that. We are determined to make the best use of brownfield land to unlock and accelerate housing schemes and deliver homes across our country. The GLA alone aims to deliver 50,000 over the next few years, and we will support the Mayor to do that.

The housing market in our capital is expanding and improving. One thing that we all agree on is the fact that London needs new homes. We do not dispute that. That is why we are committed to improving the housing

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market in London by working with the Mayor to respond to the capital’s particular housing challenges and helping ordinary Londoners to achieve their aspiration of home ownership. When the Opposition talk about the policies that failed them up to the general election, I gently suggest to them that they should think again.

10.59 am

Dr Huq: The Minister did not answer any of the series of specific questions that I asked him, although he gave us a good catalogue of things from whatever he was reading out—it seemed to be some sort of Mayor’s brief. He was asked: does he think that the definition of affordable housing as 80% of market rate is correct, and does he think that there is scope for changing it, because it is simply not affordable for my constituents? It was put to him that the average age of a first-time buyer, unaided, in London is 37—is that right, and what does he predict it will be by the time this Administration leave office? I also put it to him that he could look at alternative models of housing. Would he investigate, for example, co-operative housing solutions? I also asked about key workers, the people who keep this city going: the police, teachers, public servants—

Mr Christopher Chope (in the Chair): Order.

Motion lapsed (Standing Order No. 10(6)).

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UK Steel Industry

11 am

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): I beg to move,

That this House has considered the future of the UK steel industry.

I am grateful for the opportunity to introduce this important debate, and I am grateful to hon. Members for attending. I welcome the Minister to her new role. She has already surpassed her predecessor, the right hon. Member for West Suffolk (Matthew Hancock), by attending this debate. She should not worry because I will be positive and compliment her, and hopefully she will compliment the all-party group on steel and metal-related industries by providing good answers to our questions.

The steel industry is a vital strategic foundation for the UK. Steel is fundamental to strategic sectors such as automotive, construction and energy. Being infinitely recyclable, steel is perfectly suited to sustainability. Like those of many hon. Members here, my constituency has a great and proud history rooted in the production of steel and associated products, and I hope that steel will play a strong role in the future of my area and my country.

The manufacturing of steel products makes a significant contribution to the British economy. Exports of British steel were worth £4.9 billion in 2013 and contributed £2.4 billion to the UK’s balance of trade. The sector’s overall contribution to the UK economy is worth some £9.5 billion a year. It underpins many other economic activities and will continue to do so for the foreseeable future. The industry provides jobs for thousands of people and supports domestic businesses and employment in the supply chain, with associated knock-on benefits for the national economy generated by tax revenues.

During the previous Parliament, the Government said that they would take swift and robust action by introducing compensation payments in relation to the EU emissions trading scheme in 2013, carbon price support in 2014 and making a commitment to commence payments in relation to renewables levies later this year and next year, but the industry faces a number of urgent and critical challenges today if it is to succeed tomorrow. The need for major ongoing investment will continue, and a meaningful partnership between the industry and the Government is required to overcome those challenges.

The changing nature of the economy means that the UK now imports more of the steel it consumes, largely in the shape of finished goods. In 1970, 90% of the steel consumed in the UK came from domestic production; that share is now less than 20%, with consumption broadly the same. That has compelled the UK metals sector to become increasingly export focused, which exposes us to shifting wider demand patterns and movement in exchange risks, as we have seen recently. Meanwhile, the UK remains open to imported steel material from as far away as China.

The UK steel sector continues to suffer an ongoing economic crisis. The service sector-led economic recovery has left steel-consuming sectors, such as construction, between 5% and 10% below 2007 levels; and recovering activity in such sectors has been less steel-intensive. UK steel demand in 2015 is forecast to be 75% of pre-recession

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levels, compared with 94% in Germany and 180% in China. Such demand levels are a real problem for a capital-intensive business such as steel.

High levels of steel imports are another challenge faced by the industry. Members of the APPG, of which I am chair, are increasingly concerned about the dramatic increase in UK steel imports, most notably from China. Steel imports from China have doubled in the first four months of 2015 compared with the same period last year.

Andy McDonald (Middlesbrough) (Lab): Does my hon. Friend agree that the Government should adopt the charter for sustainable British steel and bring that standard into their procurement practices? That would help to tackle some of the import problems that he outlines.

Tom Blenkinsop: My hon. Friend makes an excellent point, which both the APPG and EEF, the manufacturers’ organisation, have been making for some time. I hope the Minister will respond on that.

Compared with the same period last year, some products are registering truly staggering increases in imports of between 1,000% and 3,000%. The primary cause of those increases is the slowdown in Chinese construction activity, which has prompted certain Chinese producers to seek new markets in which to dump excess production. Those producers have come to the UK because they are already accredited under the British accreditation scheme to sell in far eastern markets such as Hong Kong and Singapore, which use the same accreditation scheme.

The APPG is committed to free trade, but what we are currently experiencing with some steel products cannot be considered free trade. The Government need to take a more proactive approach in such cases—some would say that they need to adopt industrial activism—and I welcome the news that, in last week’s European Commission anti-dumping committee, the Government voted in favour of maintaining anti-dumping duties on wire rod. The Minister heard my colleagues on that issue and took action. In a short period of time, she has been an infinitely better Minister than her predecessor. I will keep praising her in the hope that we get even better answers as the debate continues.

Loss of sales of the magnitude we are seeing now is unsustainable in the longer term for the one remaining British producer of rebar, Celsa, which is based in the constituency of my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty). The argument is not about creating barriers but about ensuring a level playing field not only in this case but in future anti-dumping cases, such as those on reinforcing steel bar, grain-oriented electrical steels and cold-rolled steels, which are all at various stages of investigation by the European Commission anti-dumping committee.

The steel industry is not all doom and gloom. An industry that remains innovative in which people continue to invest will create direct jobs, skills and broader regional economic growth. The steel industry has the potential to enjoy a long, sustainable, innovative and productive future. Earlier this month, for example, BOC, the biggest industrial gas company in the UK, signed a

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15-year agreement to supply industrial gases to Sahaviriya Steel Industries UK, a major integrated iron and steel manufacturing facility based on Teesside in the constituency of my hon. Friend the Member for Redcar (Anna Turley) at the Teesside Cast Products site. The agreement is one of the largest gas contracts ever awarded in the UK. There has since been a turnaround, and the agreement represents a huge vote of confidence in the long-term sustainability of steelmaking on Teesside and the wider UK.

Another example, again from Teesside, is the cluster of energy-intensive industries in the Tees valley that recently set out a bold plan for the UK to lead the world in combining a growing industrial base with substantial reductions in carbon emissions. What is planned will be Europe’s first industrial carbon capture and storage network. CCS is a group of proven technologies that can capture, transport and permanently store up to 90% of carbon dioxide emissions produced by burning fossil fuels, thereby preventing them from entering the atmosphere. To date, the focus in the UK has been on commercialising CCS for electricity generation. Teesside Collective is an important departure; its premise is that a range of industries will be able to capture their emissions, plug them into a shared pipeline network and send them for permanent storage under the North sea. CCS is significant for the steel industry, as an energy-intensive industry, because the EU emissions trading system is likely to remain the primary driver of reducing industrial emissions up to 2030. Following the agreement of a new EU climate change package in 2014, sectors within the EU ETS will collectively need to reduce emissions by 43% between 2005 and 2030. Such reductions may be hard to achieve for sectors such a steel, but that type of programme offers a high-tech solution.

Projects such as the Teesside Collective may be crucial for the long-term future of the steel industry, and I welcome the support that the project has received from the Department of Energy and Climate Change. It is vital that the Government are proactive in supporting the steel industry. Such support does not have to consist of intervention similar to that in Italy, where the largest steelworks is in the process of being nationalised—incidentally, it is one of the worst-polluting steelworks in the EU. Government support could take the form of policies such as competitive energy prices and business rates. Following the review that ended in June, a swift, positive response is now required.

Mark Tami (Alyn and Deeside) (Lab): My hon. Friend has talked a lot about energy prices, which are a problem. If energy costs move against a plant, it does not matter how efficient the plant is; it will be difficult for it to compete against foreign competition.

Tom Blenkinsop: My hon. Friend is correct.

Stephen Kinnock (Aberavon) (Lab): My hon. Friend mentioned business rates. As we know, the lack of investment in machinery and technology is a major reason for the United Kingdom’s productivity crisis. The steelworks at Port Talbot in my constituency invested £185 million in a new blast furnace, which led to a £400,000 increase in business rates. Does he agree that we need to have a business rates holiday until the review is completed at the end of 2015? It is urgent that we increase competitiveness and productivity.

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Tom Blenkinsop: I thank my hon. Friend for that question. He makes an excellent point. To encourage further investment, which we have seen in Port Talbot and across the steel industry in certain areas, we need a response from Government about business rates, so that there is no deterrent to further plant and infrastructure investment by the private sector.

Further integration into industrial policy and essential long-term national infrastructure subjects that are actually followed through would give companies the green light to invest. At present, too many infrastructure projects fail to incorporate British-made products into their design. Government can promote procurement strategies that support domestic manufacturers, encouraging innovation and job creation by signing up to the UK Steel charter for sustainable British steel.

My final points relate to the people involved in the UK steel industry. At the end of May, we stood on the brink of the first national strike in the steel industry for over 30 years. That action, which included a 24-hour stoppage, was threatened after Tata Steel decided to axe the final salary benefits of the British Steel pension scheme. It was only avoided following an 11th-hour deal between unions and Tata Steel after Government advisers and the Advisory, Conciliation and Arbitration Service were called in. Under the modified scheme, steelworkers who are given approval to retire at 60 instead of 65 years of age will receive new ex-gratia payments from October 2020. Today, the ballot of union members over whether to accept changes to their pension scheme closed, and employees at the Tata Steel works in Scunthorpe and other places are expected to deliver a massive vote of confidence for the proposed changes to the British Steel pension scheme. That demonstrates how constructive and positive industrial relations can be. We want to maintain that and we have maintained it for over three decades. I hope the Minister takes that point back to her ministerial colleagues, especially in light of today’s news.

Nick Thomas-Symonds (Torfaen) (Lab): To reinforce the point that my hon. Friend makes extremely well about the history of pragmatism in the industry, is it not symbolic that we were on the verge of the first national steel strike since 1980 and the one before that was about half a century earlier? The industry has a good history of positive industrial relations that can be continued into the future.

Tom Blenkinsop: My hon. Friend is correct. The employees in the industry know that things could be shifted at any moment. In a globalised economy where capital can move in seconds, there is an understanding and a traditional trade union ability to get round the table and negotiate. Michael Leahy, the former general secretary of Community, always said that we believe in the force of argument not the argument of force. However, when an employer, or indeed a Government, tries to deny the democratic rights of employees in the workplace, it has to be taken into account. I hope the Minister will take that point back to her ministerial colleagues.

I mention pensions because when we are debating issues such as energy prices, productivity, emissions targets and so on, it is easy to forget that many of the communities we represent have been built from the hard work of steelworkers over generations. In the previous Parliament, I, alongside hon. Members here, pledged to

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stand up for steel, and that includes defending its workers, who have contributed a huge amount of their lives and expect a decent pension at the end. I do not think that is too much to ask.

The APPG members here have asked to meet the Secretary of State for Business, Innovation and Skills, and I believe that the vice-chair of the group, the hon. Member for Corby (Tom Pursglove), repeated that request in Business, Innovation and Skills questions. We would love to meet the Minister, if an audience with the APPG would be acceptable to her. We have also written to the Select Committees on Business, Innovation and Skills, which my hon. Friend the Member for Hartlepool (Mr Wright) chairs, and on Energy and Climate Change, as well as the Treasury Select Committee, asking them to investigate matters.

Mr Iain Wright (Hartlepool) (Lab): I thank my hon. Friend, the chair of the APPG, for sending the Select Committee that letter. The Committee has not discussed it yet, but may I say on the record that I believe that the steel industry is vital to the future of manufacturing and the prosperity of this country? We must do all we can to ensure that it is innovative, competitive and viable for the long term. I will certainly push that point in the Committee.

Tom Blenkinsop: I thank my hon. Friend for that response.

We know that companies in the steel industry have already put in place future budgets for the compensation mechanism that will come through as a result of the Chancellor of the Exchequer’s previous commitments to a compensation mechanism. We need clarity and evidence to show that the Government are acting upon it. We also need the Select Committees to look into business rates, EU ETS decarbonisation, and the future of the industry in relation to skills. We have a workforce who are predominantly in their late 40s and early 50s. The issue might not be the lack of capital; it might be the age profile of the workforce. We need to take that on board and be serious about it.

We also need to look at the time it takes to train someone, whether in the processing or on the craft side. For example, I recently talked to Roy Rickhuss, the general secretary of Community, which is my trade union, and he said that it takes nearly three years to train a waterman who works in a blast furnace. That is probably the most important job in the plant: he is the guy who keeps the molten iron away from the water. Anyone who has ever witnessed a breakout, which is an unfortunate and serious event, knows how dangerous it can be. That job takes two to three years to train for. We need industrial activism, which does not just go to companies as urgent investment and does not just have public funding that supports that investment, but that looks at how we ensure that there is a succession plan for skills in the industry.

11.15 am

The Minister for Small Business, Industry and Enterprise (Anna Soubry): It is a pleasure to serve under your chairmanship, Mr Chope. I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing the debate. If there was a criticism to make, it would be that it is unfortunate that

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it is only a 30-minute debate. If anyone is interested in my views on this, I think it ought to be a 90-minute debate, and I would have it in the main Chamber.

It is important that we discuss the problems and difficulties that face our steel industry. I am particularly interested in looking at solutions. I want people to come forward with ideas about how we solve the many problems that we know our steel industry faces. There is no debate; we absolutely agree about the value of having a good, strong British steel industry for all the reasons the hon. Gentleman identifies.

It is right to say that we agree on the problems. We know that we have huge overproduction across the world and that that has been a real challenge for the British steel industry. We also know that there has been a marked reduction in demand. We can discuss and debate why that might be, but the harsh reality is that that reduction has taken place. I am confident, given the economic success that we have had, that demand will rise in this country. Unfortunately our economic success has not been reflected across the globe, but there will be an upturn, which is why it is important to keep steady. It will come good, even though we have overproduction, because demand will rise.

We also agree that we have a problem with the cost of energy. The steel industry is a very high consumer of electricity. We have overly high electricity prices for our industries, particularly the electricity-intensive industries, that are so heavily reliant. We call them EIIs in the Department for Business, Innovation and Skills, and the hon. Gentleman and others will be familiar with them. The cost of electricity is a serious problem for our steel industry. We must look at that, but when we do so we must understand that someone would have to pick up the bill if we were to make a move on costs to EIIs, and that may not be an attractive proposition. However, I completely understand the burden the current electricity pricing system places on EIIs—I get it.

The other matter, which was raised by the hon. Member for Aberavon (Stephen Kinnock), is business rates. I know that concerns the hon. Member for Hartlepool (Mr Wright) as well, because he was nodding with great vigour from a sedentary position, and rightly so. It is a problem. It is hugely ironic, as the hon. Member for Aberavon said, that in Port Talbot people invest huge amounts of money and bizarrely get clobbered for doing the right thing by the huge rise in business rates on the other side. Sheffield Forgemasters International in Sheffield is paying £1 million a year in business rates.

As we all know, the difficulty is that if we were to do something about business rates for our steel industry, people would ask: why not do so for all the other industries? They would all be queuing up. We are reviewing business rates. We want to listen to everyone, which is why I am happy to work with the new Chair of the Select Committee on Business, Innovation and Skills—I congratulate the hon. Member for Hartlepool on his election. We know we must do something about business rates. I want us to take a radical approach.

Mr Iain Wright: Those who were Members of the last Parliament will know that the new Minister is a breath of fresh air when it comes to passion for and commitment to the steel industry. In the last Parliament, the Government

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were working with industry to publish a UK metals strategy. Can she update the House on that work? Is the strategy ready for publication and consideration by the House?

Anna Soubry: I have some words on that. I have abandoned my speech, which will get me into terrible trouble with my officials, but I will read the next bit out rather than ad lib, because then I know it will be right.

I am pleased that the metals sector, including the steel industry, is developing a new national metals strategy. That has been facilitated through the Metals Forum, a grouping of 12 trade associations, including UK Steel, with which BIS has regular dialogue. The publication of the strategy will bring metals into line with other important foundation sectors, such as electronics and chemicals, which have led and developed their own strategies. We have been pleased to be able to fund some of the work, both for the strategy itself and for the initial scoping study, and we have seen some of the output that has emerged, which is of high quality. The public document is nearing completion and is likely to be published in early autumn. We expect it to provide a framework for our work with this sector in the future.

Hopefully that answers the hon. Gentleman’s question. It may not give the detail, but that document will be published in early autumn. I will just put on the record that I am, of course, more than happy to meet the groups that have been established to discuss how we can help our steel industry.

Mr Chope, how long have I got? Am I to go to 11.30 am, or are other Members able to make speeches? I think the answer is no. I am thinking of the hon. Member for Llanelli (Nia Griffith), who is on the Opposition Front Bench. Does she get a speech?

Mr Christopher Chope (in the Chair): No.

Anna Soubry: I am sorry about that. I will happily take interventions, but the hon. Member for Middlesbrough South and East Cleveland will want to sum up in any event.

Andy McDonald: I do not know whether the Minister intends to cover this point, but I will ask her now: should the UK Government follow the lead of the Welsh Assembly by endorsing the charter for sustainable steel?

Anna Soubry: The short answer is that I need to make more inquiries about that issue, and of course I will write to the hon. Gentleman about it.

Yesterday I met Karl Köhler, the chief executive officer of Tata Steel. It is absolutely clear that his company will face huge challenges in the future; he has been very up front about that, and I understand that. My attitude—which hopefully was demonstrated last week, as has already been identified—is that this Government will and must do all we can to help the sustainability of the steel industry.

That is why I was so keen that we vote as we did about the threat of certain Chinese imports of certain steel products where there is good evidence that—unfortunately —China has been dumping. It is right that the EU should take the measures we are taking. I was so keen that we vote in favour of those measures that when the vote from the UK delegate was cast in favour of what

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many will say is a protectionist measure, although I do not have a problem with it, apparently it was necessary to go back to make sure, because it was the first time that it had happened and people were so shocked by it. I hope that the message goes out to all involved in the steel industry that I take this matter incredibly seriously.

The steel industry is a very important part of our manufacturing sector, it is important to our country and we have to do everything we can for it. However, the challenges are enormous and we should be under no illusions about that, and of course it is not only Tata but all the other steel companies that face real difficulties.

I will return to my speech—in fact, I will start it, or rather jump into the middle of it. The best way that the Government can support UK steel companies is through a successful economy and successful steel-using industries. That is why I take the view that we should stick with the plan that we started under the last Government. We will continue with it. Our ambition is to create the right business environment for free enterprise and to remove barriers to productivity and growth within sectors, including by deregulation, promoting fair competition and simplifying the business landscape. The Government work closely with the steel industry on a large number of issues, and that will continue.

Nia Griffith (Llanelli) (Lab): Yesterday in the main Chamber, I thanked the Minister for her work on the anti-dumping measures. On supply chains for Government projects, we know that it is possible without breaking EU rules to, let us say, make it a bit easier for our supply chains to get the work. What will she do to get the Government to encourage and help the supply chains to make the necessary bids for the expected Government projects?

Anna Soubry: The hon. Lady makes a very good point and I thank her. I will certainly go back to my officials about that issue and discuss what can be done. Obviously, I would wildly encourage anyone within the supply chains to buy British-made steel; that is incredibly important for all the obvious reasons and because the steel is of such high quality.

In his opening remarks, the hon. Member for Middlesbrough South and East Cleveland talked about the skilled workforce. It may be that we have to revisit that issue, to ensure that apprenticeships are encouraged and that younger people are brought into the industry. However, the workforce in the steel industry are highly skilled.

Of course, there are certain niche sectors of the steel industry where we do particularly well and we rightly have a worldwide reputation. However, I will come back to the hon. Lady. Perhaps I will write to her about what more we can do, because the state aid rules are a real problem for us.

Tom Pursglove (Corby) (Con): I am obviously very grateful, as are all members of the all-party group, to Ministers for their willingness to talk to us and engage on the issues that we are discussing. However, I would be interested to know a little about the up-to-date thinking on carbon taxation and the support available to businesses that are tackling that big problem.

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Anna Soubry: I think I have made my own views very clear. I am hugely aware of the difficulties that the problem causes, because it is undoubtedly the case that our electricity costs are some of the highest in the whole of Europe, if not the world, so we have to look at them. However, we cannot simply get rid of these things; everything comes with a cost, the burden of which may have to be borne by somebody else somewhere along the line. Nevertheless, we are actively looking at that issue.

Anna Turley (Redcar) (Lab/Co-op): I really appreciate the Minister’s openness, her willingness to engage with us on this issue and her positivity towards the UK steel industry, but on the point that my colleague the hon. Member for Corby (Tom Pursglove) raised, one of the most immediate and positive solutions that the Government could adopt, which would send a good message to the steel industry, is to commit to implementing the outstanding parts of the energy-intensive industries compensation scheme. Can the Government confirm when they will deliver that compensation scheme, which has already been promised and announced, and will they consider bringing forward compensation for the renewables obligation?

Anna Soubry: As I say, we are having a debate between different Departments, as the hon. Lady might imagine. I thank her for her contribution and I hope that we can solve what is undoubtedly a problem, but even if we were to do the right thing with the cost of electricity, that would not solve all the problems for the steel industry; the cost of electricity is just one of the problems. I want people to come forward with solutions to help me in my job, to ensure that we do everything we can to help our steel industry and to grow it in certain areas, because, as I said, we do extremely well in many niche markets.

As I said earlier, yesterday I met Dr Karl Köhler, the chief executive officer of Tata Steel. I am looking forward to meeting Luis Sanz of Celsa, which is obviously another big player in this industry, and last month I had the pleasure of meeting Gareth Stace of UK Steel, who did not hold back in giving his assessment and some parts of his wish-list. As hon. Members know, and as I have already alluded to, EU state aid rules limit the direct help that can be offered to steel companies. Research and development, environmental protection and some training can be supported, but we cannot provide operational aid; I think that we are all aware of that. Nevertheless, we work within those strictures to provide all the support that we can reasonably provide to ensure a competitive future for the UK steel industry.

Mr Chope, we really ought to have 90 minutes to debate this issue. I will reiterate that I am more than happy to meet hon. Members and discuss it further, and I congratulate the hon. Member for Middlesbrough South and East Cleveland on securing this debate today, which he will now sum up, and let us hope that we get a longer debate on this issue next time.

Mr Christopher Chope (in the Chair): Exceptionally, I will allow the hon. Member for Middlesbrough South and East Cleveland to speak again.

11.29 am

Tom Blenkinsop: Thank you, Mr Chope. I really appreciate it.

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I thank the Minister for her very positive and warm words about the industry. In the short period of time that she has been in situ, she has demonstrated that she is a far better Minister with responsibility for steel than her predecessor. With her support and advocacy within the chambers of Whitehall, we can get even more positive results.

I will end by talking about the compensation mechanism. That was a specific promise given by the Chancellor. We need to see information and evidence about that. I would like to work with the other members of the all-party group and the Minister in any meetings that we are able to have, whether they are with the Secretary of State for Business, Innovation and Skills or indeed with Treasury Ministers, so that we can get past the difficulties between Departments that the right hon. Lady referred to.

Nevertheless, I warmly welcome the Minister’s words today and I hope that we can build a working relationship in the future.

Question put and agreed to.

11.30 am

Sitting suspended.

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Regional Support for the Arts

[Andrew Rosindell in the Chair]

2.30 pm

Andrew Rosindell (in the Chair): The Speaker’s Commission on Digital Democracy recommended the use of regular digital public discussion forums to inform debates held in Westminster Hall. A digital debate has taken place on Twitter, ahead of this debate on regional support for the arts. For that reason, Mr Speaker has agreed that for this debate members of the public can use handheld electronic devices in the Public Gallery. Photos, however, must not be taken.

Robert Jenrick (Newark) (Con): I beg to move,

That this House has considered regional support for the arts.

It is a pleasure to open this debate, Mr Rosindell, particularly as you are in the Chair. As you rightly said, this afternoon’s debate follows the second ever parliamentary digital debate, which began on social media yesterday. Appropriately, the debate enabled Twitter followers from regional arts organisations, and enthusiasts throughout the country, to discuss the arts outside London in our great regional cities and market towns, and in the countryside. They discussed how we can fairly distribute what Government funding there is throughout the British Isles, whether from the Arts Council, the lottery, or direct grants from the Department for Culture, Media and Sport, to ensure greater equity and access to the arts. They also debated how to redress the parlous financial position of some local museums, theatres, heritage sites and cultural groups, which some of those participating in that Twitter debate raised with us. The House of Commons authorities inform me that 250 people took part in that debate, which reached 1.2 million Twitter accounts.

The Minister for Culture and the Digital Economy (Mr Edward Vaizey): Will my hon. Friend say what hashtag was used for the debate, so that those of us participating in today’s debate can look at some of the tweets?

Robert Jenrick: It is #artsfunding. That was not my decision; it was set by the House of Commons. I thank everyone who took part in that debate for their contributions. I will mention as many of the points raised as I can.

The point that came across clearly was that arts organisations have never been under greater pressure to change than they are today. Whether we like it or not, state funding for museums, galleries, and perhaps for the wider arts as well, is in serious and probably perpetual decline. The imperative to continue reducing the deficit, the ambition to achieve a budget surplus in the years ahead and the prioritisation, rightly, of health, education, defence and international development, all of which I personally support, suggest that arts funding from central Government will continue to decline in this Parliament—and would have done whichever political party won the general election. We will find out by how much in the months to come.

This is a major change from just a decade ago. Then, arts organisations across the country were able to rely on steady financial support from Government and were,

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to some extent at least—although no doubt it did not feel like this at the time—shielded from having to ask the more uncomfortable questions about how they operated and how to distribute resources equitably across the country.

John Nicolson (East Dunbartonshire) (SNP): I distance myself from that comment, which is factually incorrect. Arts funding from the Scottish Government has increased, because we think that the arts are important.

Robert Jenrick: I thank the hon. Gentleman. I was, I guess, referring to England and Wales, but the hon. Gentleman’s presence is much appreciated and he has provided an important clarification.

I emphasise my earlier remark about difficulties in the regions and particularly the importance of London, which came across clearly in the Twitter debate. The relationship between London and the rest of the United Kingdom with regard to the arts is one of positive interdependence; there was no tit for tat in our debate yesterday between London and the rest of the country.

Last year, three of the world’s 10 most visited museums were in London and the number of visitors to each is increasing. The British Museum welcomed almost 7 million visitors. Even those of us representing constituencies far from London, whose constituents perhaps only visit the capital a few times a year at best, can agree that that is a tremendous achievement—one no doubt connected to this Government’s decision to retain the decision of a previous Government to maintain free access to the national collections. At about £50 million, that is a substantial contribution of public funds, yet one can see its benefits: in England, visitors to the national museums have risen from just over 7 million in 2000-01, when free entry was introduced, to around 20 million today. As one individual mentioned in our Twitter debate, many of those are foreign tourists. In the present financial climate, one could seriously question why we do not charge foreign nationals, and perhaps non-European Union nationals, as required, and ring-fence that money specifically to spend in the regions of the United Kingdom.

There is no point in having free entry to some of our greatest museums if people cannot get to them in the first place. The national collections are relatively safe, be they in Edinburgh, Liverpool, Cardiff or London, but the same is not true of the rest of England and Wales—certainly not outside the major regional cities. There is no point knowing that there are great, free museums elsewhere in the country if those close to home charge and are struggling to maintain the quality that they want.

There is an irony for those of us who are regularly in London, whether living or working here as Members of Parliament, because we enjoy the capital’s rich cultural life, often for free. Meanwhile, my constituents in rural Nottinghamshire have incomparably more modest access, and usually for a charge. My children and I can enjoy trips to the Science museum or other wonderful family-friendly institutions when in London, but when we are home in Newark—a town with significant deprivation and an average income of £19,500 per annum—we pay £20 to visit our superb new National Civil War Centre, £30 to see the Magna Carta at Lincoln and £40 for a visit to Belvoir Castle, our nearest major stately home. Those figures are for family visits.

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My constituents are not as hard done by as many in the country. Of course, we have Nottingham close by—a city with a vibrant, growing cultural life, whether at the Nottingham Playhouse, Nottingham Contemporary and Nottingham Castle or in the arts supported by Nottingham University; like other universities, that is becoming an increasingly important promoter and facilitator of cultural life, which we should encourage. But the point remains: my constituents have to pay for, and inevitably and invariably have to travel to access, much if not all of the culture they want to see.

A report last year found that total funding from the Arts Council and DCMS was 15 times higher per head of population in London than in the regions. Lords Puttnam and Bragg produced the shocking figures showing that Londoners benefited from £69 spending per head, compared with £4.50 in the rest of England. One could do an even starker calculation, comparing those living in great regional cities such as Manchester, Birmingham or Leeds to smaller cities, market towns and the countryside, including my constituency.

There has been progress. By next year, the Arts Council will have shifted the balance of funding to the national organisations that it supports, so that just over 50% will be located outside London. That is progress. The chief executive of the Arts Council made the welcome announcement a month ago that the amount of lottery funding to bodies outside London would increase from 70% to 75% by the end of 2018. The Arts Council has launched a £32.5 million fund to support arts production, talent and leadership outside London. There have been incentives such as the theatre tax relief, which was welcomed by my local theatre in Nottingham. That relief will help support touring theatre companies. Some of our national institutions, such as the National Gallery and the British Museum, are pioneering regional tours of great works of art, although those are very expensive to put on. The British Museum’s annual report for last year showed the enormous amount of mentoring that it does for curators and those leading regional museums and galleries.

Let us be honest, though: those efforts are comparatively modest. They do not go nearly far enough and are not happening fast enough to redistribute cash and talent. There is a widening gulf between the capital and the great regional cultural centres and the rest, and that pattern is reinforced by private philanthropy. According to the charity Arts and Business, 82% of the £660 million donated in 2012 went to London-based organisations, and that is before the Olympics and the BBC are included. My neighbouring MP, my hon. Friend the Member for Sherwood (Mark Spencer), recently held a debate in this place on the gaping disparity between the BBC’s investment in culture and the creative industries in the midlands and London.

The proportion of Arts Council money spent outside London has been falling for decades, even though every survey concludes what we all know: the average Londoner is no more likely to enjoy the arts than his country cousin. The effect of those trends has been to choke off access to the arts for those in the regions, and especially those in smaller cities and towns and rural areas. It is estimated that two thirds of the country lives outside the readily affordable range of national organisations and museums, and that zone is surely shrinking for those on the lowest incomes, as transport costs rise and rural and local bus routes continue to decline.

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At the same time, there has been a huge squeeze on local access to a wide range of artistic and cultural experiences—particularly, as was made clear in our Twitter debate, those provided and supported by local authorities. Many local authorities under financial strain have continued to support their local ecosystem of artistic and cultural organisations, and they deserve great praise. Sometimes that support is simple and low-cost, such as with Newark and Sherwood Council’s provision of free rehearsal space to orchestras and community groups. However, as the recent Select Committee report noted, some councils—including some of the most prominent, such as Westminster City Council—do considerably less, and we should be pushing them to do more.

One could take up the point made by the Select Committee that the provision of culture is not a statutory duty for local authorities. As with library provision in some parts of the country, we must see quality provision and not a tick-box approach to satisfy the law. We have to persuade councils that the arts are essential to the success of their communities, but the problem exists and we need to recognise it: more than half of the local authority museums responding to a recent survey by the Museums Association said that their incomes had fallen very significantly and that their confidence was very low.

Why does the disparity matter? It matters if we believe in a one nation approach—the Prime Minister has spoken eloquently on this—where opportunity is available to all and all our brightest talents are shared with those in the greatest need. It also matters if we believe in rebalancing the United Kingdom and reigniting the fire that drives our regional cities and towns, as the Chancellor has laid out powerfully in the Budget and elsewhere. When we speak of a northern powerhouse, the language evokes the strength of great Victorian cities, all of which invested heavily in museums, theatres and civic architecture. The reality is that there will be no return to Victorian-style vibrant cities in the midlands or the north unless there is a momentous shift in their image and how they are viewed, and that is driven by culture and the arts.

My constituents see their best and brightest employees—and, in particular, their children—vanish to the bright lights of London. Many of us in this House have done exactly the same thing. An English, Welsh or, indeed, Scottish provincial revival must set as its goal turning provincial cities and towns into cultural magnets in which young and old alike want to live and work and in which entrepreneurs want to set up their businesses.

We need a major change in our support for the arts if we are to give those places the attraction and glamour of London or of the many other vibrant places, such as Oxford, Brighton or Cambridge—they are, it has to be said, predominantly in the south-east—that our brightest people are drawn to; often those people never return to their roots, however fond they may be of them. The issue is not about Arts Council funding to the regions rising from 49% to 53%, but about something of a far greater magnitude happening far quicker. We need to move away from the mindset that London’s national museums and performing companies may travel more and the ultimate belief that they can visit the nation or the nation can visit them, but that they are not part of the nation itself.

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Graham Stringer (Blackley and Broughton) (Lab): The hon. Gentleman is making a well-balanced and polite speech, but perhaps we should put some sharpness into the debate. Does he agree that it is completely unacceptable that the Arts Council spends £1 out of every £2 in London? Even with the lottery-funded support for the arts, £1 in every £3 is spent in London. That is not only unfair, but damages access to the arts for people in regional cities, such as Manchester, and their economies. Does he agree that that imbalance is intolerable?

Robert Jenrick: The hon. Gentleman makes a good point. I agree that it is intolerable; it has been for a long time. If there is a growing consensus that we want to redistribute and realign ourselves, to increase the strength and economic vibrancy of our regional cities, then the issue has come of age.

My final point is that regardless of how we distribute the available cash, if we are moving into an era of diminishing Government support for the arts—I do not think this is a party political point—we need to step back and assess how our organisations can adapt and thrive in that new climate. Is it not time for a new strategy for the arts in the regions and for our national institutions? One has only to look to the United States to see some institutions that have survived and thrived with diminished state support. Museums forced to rely on wider public support are inevitably better at outreach, education and community engagement. As the Financial Times noted the other day, the Metropolitan Museum of Art’s YouTube channel has had more than 15 million views. The National Gallery’s channel has had just 600,000 views. American institutions are dramatically better at and more proactive in fundraising, and their Government provide better incentives to give.

Some US institutions embrace more controversial means of operating, such as de-accessioning works of art that will never go on public display, that are duplicates of those already on display or that are of little merit to the public. Those decisions are difficult and mistakes can be made. We have seen some unfortunate examples in the UK recently that have given the idea a bad name, but we need to challenge our institutions to consider such opportunities responsibly, as some other great institutions do, including the Metropolitan Museum of Art. The Government could consider through a review how we might use some of the funding opportunities used by others.

I have spoken to UK museums that would give up their dependence on subsidy and set themselves free from the shackles of the state—believing it easier to raise money from private philanthropy if they did—were the state to do something radical, such as guarantee a bond or gilts to provide them with income or endowments. I return to the example of the Metropolitan Museum of Art, which issued a $250 million bond in January to fund future development. It was given a triple A rating by Moody’s.

The point is that we have a 19th-century view of how to run museums and galleries that just about worked when the state supported them reasonably generously. If those days are over, perhaps we should consider radical options so as to be on the front foot, rather than allowing the institutions to diminish slowly.

The scale of the challenge requires a new approach and strategy for the arts, rather as it did when Jennie Lee produced her original White Paper as the first Arts

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Minister, but with different, often uncomfortable answers in the 21st century. There are three central questions for this Parliament. First, how can we ensure that the value of the arts in general, whether in London or beyond, is recognised by the Government in future spending decisions and seen as an integral part of our strategy for sustained economic growth, particularly in the regions?

Secondly, with the funding that is or will be available, how can we dramatically and swiftly correct the imbalance between London and the regions to create a one nation cultural policy that places at the heart of what we do access to the arts for economic development, education and wellbeing? Lastly, how can we support, assist and incentivise arts organisations to move with confidence into an era when central Government support is likely to be increasingly limited, but the public appetite for and value of their work, and therefore the opportunities, are growing exponentially?

2.50 pm

Sue Hayman (Workington) (Lab): It is an honour to serve under your chairmanship, Mr Rosindell.

I have always been a strong supporter of the arts. I believe that rounded communities are important for proper education. I support local theatre, and I was delighted to see that there is a parliamentary choir, which I joined and am enjoying very much. I therefore thank the hon. Member for Newark (Robert Jenrick) for securing this debate.

My constituency, Workington in west Cumbria, has a proud history of arts, music and culture. There are a number of excellent organisations in the area that are supported by many dedicated volunteers, to whom I pay tribute today. For example, the Carnegie theatre in Workington was built and opened its doors at the turn of the last century; it holds a special place in the hearts of local people. The Kirkgate Centre in Cockermouth is a unique theatre and arts venue. Run by Kirkgate Arts, it was set up specifically to tackle the social disadvantage that comes from lack of access to arts and community services.

One thing we are good at in west Cumbria is getting arts out into local communities, which is a really important aspect of regional arts funding. Kirkgate Arts delivers “Arts Out West”, west Cumbria’s rural touring arts programme, which brings arts events to local village halls. I have benefited from its visits to my own village on many occasions. Rosehill theatre’s “Rosehill on the Road” programme takes arts into schools, and it recently did a fantastic piece of work collaborating with local schools to bring an opera to the Carnegie theatre. It was just tremendous. People say that opera is not for everyone, but I defy them not to go to see such a production.

Continuing to provide that sort of access to the arts is a real challenge, as my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said. Local arts providers constantly face an uphill struggle for the funding they need. The Carnegie theatre was run by my local council, Allerdale Borough Council, but it has just been passed on to a trust so that it can access funds that the council could no longer provide because of cuts. We need to ensure that our arts facilities in the regions can develop to their full potential and secure long-term stability. That is becoming more and more difficult.