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Westminster Hall

Wednesday 9 September 2015

[Albert Owen in the Chair]

Affordable Housing (London)

9.30 am

Chris Philp (Croydon South) (Con): I beg to move,

That this House has considered affordable housing in London.

[Interruption.] We seem to have been attacked by some sort of ghost in the acoustic system.

As long ago as 1946, Anthony Eden laid out a vision of a property-owning democracy, describing ownership of property as

“a reward, a right and a responsibility that must be shared as equitably as possible among all our citizens.”

I hope that both Government and Opposition Members agree with that sentiment. Demand for housing in London is at record levels. The population of our city recently exceeded the pre-war high of 8.6 million, overtaking the peak in 1939. It is growing by 100,000 people per year. That rate is forecast to continue, and by 2030 the population of our city will exceed 10 million. That population growth means that each and every year we need to build 50,000 more homes in the city to keep pace with population demand. I ask Members to keep that number in mind as we continue the debate.

The challenge that our city faces is that for the last 20 years or so we have been building only between 15,000 and 25,000 new homes a year, meaning that each and every year we are building fewer houses than required to meet population demand. That situation is clearly not sustainable. I have done some calculations for the period since 2000: in that time, we have built about 300,000 fewer homes than required to meet population demands, so we have that accumulated under-supply in our city. As a consequence, there are enormous pressures on the availability and affordability of houses in this city, as Members know from their constituency casework. [Interruption.]

Albert Owen (in the Chair): Order. We have a problem with the acoustics. Will you try switching your microphone off? [Interruption.] I am told there might be no recording, so please turn it on again—we need a report. We shall carry on.

Chris Philp: As Members know from their constituency postbag, there is enormous pressure on the affordability and the availability of housing in our city. That is why 25% of 20 to 35-year-olds are still living with their parents. As the father of two-year-old twins, I very much hope that that is not the case in 18 years’ time. The average age of a first-time buyer in this city has risen to 37, so there are real challenges to do with the availability and affordability of housing.

Some people, such as the hon. Member for Islington North (Jeremy Corbyn), may talk about rent controls and so on, but at the most fundamental and basic level the issue is one of supply and demand: demand is exceeding supply. The demand side of the equation—

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population growth—is hard for the Government to regulate, and the only component that they can influence is probably immigration, which is clearly a big driver of housing demand in London, so it is right that the Government should want to get immigration under control. The other side of the equation is supply. By increasing supply we can alleviate the pressures to which I have referred.

Mr David Lammy (Tottenham) (Lab): Does the hon. Gentleman want to qualify what he says? Supply is important, but supply for whom? What we need are affordable homes. With the average income at £32,000, I hope that he will say something about affordability.

Chris Philp: On affordability, basic economics dictate that as we increase supply relative to demand, prices will fall, so irrespective of tenure types, controlled rents and so on, increasing supply will tend to help affordability.

Siobhain McDonagh (Mitcham and Morden) (Lab): Will the hon. Gentleman address the point that in a capital city the demand is not only from people who live here, but from international developers, who see housing as a good investment? We could increase supply, but none of our communities would be able to muscle their way into getting some of those properties.

Chris Philp: Let me take the latter point made by the right hon. Member for Tottenham (Mr Lammy) before coming on to the hon. Lady’s. On affordability, supply and demand clearly drive prices. I am delighted that under the current Mayor of London we have delivered 3,000 council houses, whereas under the previous Mayor virtually none were delivered. Taken together, the number of housing association starts and local authority starts under this Government is 5% higher than under the Labour Government.

Andy Slaughter (Hammersmith) (Lab): Will the hon. Gentleman give way?

Chris Philp: I would like to make a little progress first; I will give way in a moment. The Mayor of London, my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), has brought forward 94,000 affordable units during his mayoralty —a considerably larger number than was brought forward by his predecessor, Mr Livingstone. We have a good track record on affordable housing, but more clearly needs to be done.

On foreigners buying property in London, there are two elements: who is buying it, and are they occupying it? On foreigners buying it, the phenomenon tends to be concentrated in prime central London places, such as Kensington and Chelsea—

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): And Hackney.

Chris Philp: It is good that Hackney is a desirable place. Figures produced by Knight Frank suggest that 93% of new build stock in outer London and 80% in inner London is sold to UK residents. Savills estimates that in 93% of all transactions across London, the property, whether new or second-hand, goes to people who live here, so it is possible to overstate things. In 93% of property transactions, the property goes to Londoners.

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I am delighted to report that vacancy rates in London under this Government have dropped dramatically. Long-term vacancy—vacancies for longer than six months—stood at 34,000 units in 2010; that has dropped to 20,000 units, which is a reduction of 41%. That is good progress achieved under this Government.

Mark Field (Cities of London and Westminster) (Con): May I suggest to my hon. Friend that the rather self-serving evidence from Knight Frank and Savills not be given too much credence? There are important points that all of us in London, across the political divide, feel strongly about, and making the debate rabidly party political is unhelpful, not only for London MPs, but for all those we represent.

Chris Philp: It is certainly not my intention to make the debate rabidly party political—I am not sure that I have been called “rabid” before, but I thank my right hon. Friend for introducing the adjective. I want this to be a non-partisan and constructive discussion about London’s housing. I hope there are things that we can agree on during the debate.

Andy Slaughter: Does the hon. Gentleman agree that his Government’s policies to force the sale of high-value council homes in London and to restrict or cut the rents without compensating councils, which is completely decimating council building programmes, are not helpful in providing more affordable housing?

Chris Philp: I am sure that the Minister will comment later, but the sale of valuable houses might provide councils with the opportunity to use the proceeds to build two or three new social housing units. For example, I used to be a councillor in Camden and some of its housing stock, such as some units in Bloomsbury, was worth well in excess of £1 million—one of those units was occupied by the hon. Gentleman’s former colleague, Mr Dobson. Were such a unit to be sold, we could have built two or three council or social housing units elsewhere in Camden or London. There is some merit in that.

On the rent reductions, making housing more affordable clearly means making rents cheaper, which will help housing association and council tenants to pay lower rents. There are opportunities to force efficiency savings in those organisations. Most branches of government—local authorities, the police, every Department—have made savings over the past four or five years, quite rightly, and it is fair to ask other organisations to make savings and pass those on to their tenants.

Andy Slaughter: The hon. Gentleman should have read his brief a little more carefully. In places such as Camden, it will often not be possible to find the land on which to build to replace those houses that are sold. If it can be found, under his Government’s rules, it is likely that the newly built homes will also have to be sold. The fact is that councils in London have tried hard to have house building programmes. The effect of the rent cut may be good in itself, but unless Government money is supplied to compensate for it, there will be no council housing building programme for London. He needs to address those points if we are to take him seriously.

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Chris Philp: If there are challenges in inner London boroughs such as Camden and the Royal Borough of Kensington and Chelsea, where it is difficult to find new sites, it is important that houses are built in the wider London area. The Mayor of London has strongly advocated having a London ring fence, whereby the proceeds of council house sales and the like are ring-fenced for use within London. I am sure the Minister will comment on that suggestion in due course.

Meg Hillier: I thank the hon. Gentleman for being so generous in giving way. He seems to be saying that in boroughs such as Hackney—where, under the Government’s proposed right-to-buy policy, large family council properties would need to be sold off, but over a fifth of residents under 16 will need those family homes—we should be content to encourage people to go and live in Ruislip or Mitcham. I am sure that those are fantastic places to live, but they are not where Hackney residents want to live; they would have to take their children out of school to do so, which they do not want to do. Is he saying we should be shipping people out of expensive areas to cheaper areas?

Chris Philp: No. I am simply saying that where there are very high-value council properties, it makes sense to sell them and free up money to build more properties. Ideally, those would be in the same borough, but if there is a lack of land—I am not sure that Hackney has a particular lack of land; that is more a problem for the inner London boroughs, such as Camden, Westminster and RBKC—and it is impossible to find new land in the borough, we should look a little more widely. That seems to be common sense. If we can sell one unit and build three, that seems to be a trade-off well worth—

Andy Slaughter: Will the hon. Gentleman give way?

Chris Philp: I will make a little progress. I have been unusually generous.

The Mayor of London has made progress during the seven years of his mayoralty. He has brought forward 94,000 affordable houses since 2008, which—to respond to the point made by the right hon. Member for Tottenham—is extremely welcome. The 20 housing zones established jointly between the Government and the Mayor of London, with £400 million of investment, are also extremely welcome. In those zones the local authority, the Mayor and the Department for Communities and Local Government get together to put in place the planning, infrastructure and support required to deliver large-scale housing. Those zones will help, and the £200 million London housing bank will help as well.

There are also specific projects that I am sure we are all keen to encourage. For example, the Mayoral Development Corporation is bringing forward 24,000 units on derelict industrial land at Old Oak Common in Ealing. We need to see far more schemes—

Andy Slaughter: Will the hon. Gentleman give way on that point?

Chris Philp: Is it partly in Hammersmith? [Interruption.] The fact that it goes over three London boroughs shows that we need MDCs to step in and make things happen when large numbers of public bodies are involved. In my own borough, the Croydon growth zone is important; it will, I hope, bring forward 4,000 houses. The Brent Cross regeneration project is another important scheme.

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Those specific projects, in which the Government, the Mayor of London and the boroughs focus together on bringing forward large numbers of houses in a particular area, are very effective. I strongly encourage the Mayor and the Minister to do even more in that way.

I also commend the Greater London Authority for its programme of disposing of its public land for housing. Over the last couple of years, the GLA has disposed of 98% of the land that it owns—that excludes Transport for London, by the way—for public housing. That includes the site of the old Cane Hill hospital in my constituency—which is directly overlooked by my house—where Barratt Homes is currently building 650 houses. That is an example that other public bodies should follow.

In that vein, I welcome the London Land Commission, which met for the first time on 15 July. Its duty is to catalogue surplus public sector land that can be brought forward for housing. TfL has 6,000 acres that could be used across 600 sites; the NHS has 1,000 acres, 15% of which is potentially surplus to requirements. There is a huge amount that can be done by bringing forward public sector land for house building.

I also strongly support the idea of using local development orders to effectively grant outline planning consent on suitable brownfield land, even if the landowner has not applied for consent. The target is to get LDOs for 90% of brownfield sites by 2020. That is a really important initiative. One housing association estimates that there are 8,000 acres of developable brownfield land in our city. It is a matter of absolute urgency that we develop that land as quickly as possible, partly to create new housing and partly to take pressure off the green belt, which it is essential to protect.

I am conscious that other Members wish to speak. In closing, I will briefly put eight specific proposals to the Minister. The first is to consider extending the office-to-residential conversion scheme that has been in operation for the last two or three years, in areas where there is no pressure on office supply. Certainly some clarification is needed about the definition of change of use. At the moment, the change of use has to have occurred by May 2016, but there is a little ambiguity about what the change of use actually is, so some clarification would help developers and investors.

Secondly—this is more a matter for the Treasury than DCLG—the regime for buy-to-let mortgages is currently a bit softer than the mortgage regime for owner-occupiers. For example, most owner-occupier mortgages are repayment, whereas most buy-to-let landlords get interest-only mortgages. In my view, that means that buy-to-let landlords are unfairly advantaged relative to potential owner-occupiers. The Bank of England and the Treasury should look at that, to create a level playing field so that owner-occupiers can purchase on an equal footing to buy-to-let landlords. That would encourage home ownership.

Thirdly, local authority planning departments are often a serious bottleneck, leading to the missing of statutory deadlines for granting planning consent. I suggest that we should consider allowing higher planning fees to be charged in exchange for a guaranteed service level. Planning fees are quite low, and I am sure that many developers—particularly larger ones with big

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schemes—would happily pay a great deal more money to get a quick, clear decision. That would bring planning consents forward more quickly and get us building.

Ruth Cadbury (Brentford and Isleworth) (Lab): That is fine, but would the hon. Gentleman’s party support speedier decisions if that meant less time for proper consultation with local residents?

Chris Philp: No. Proper consultation is clearly very important. Quite often, however, it the process with officers that is slow. It is not the planning committee; the officers who prepare the reports and do all the work prior to the application can take a very long time, often because they are under-resourced, because of the understandable pressures on local government finances. I am sure that larger developers in particular would be happy to pay significantly higher fees to speed up the process. Some planning departments and councils are very good, but some are not, and when they are not performing and are letting local residents down by being slow in dealing with applications, we should consider outsourcing planning functions to a third party that can do the job more effectively. That could be paid for by planning fees.

Fourthly, we must make sure that the brownfield register being compiled for the LDOs is given real focus. I suspect that the GLA will play a role in supporting that process, and it may need some financial assistance. It is essential to get the list of brownfield land and develop those 8,000 acres as quickly as possible. I hope that the Department, the Mayor of London and the boroughs will put a huge focus on identifying that land and giving it outline planning consent over the next five years.

My fifth point is a more general one, about talking to developers. I should draw Members’ attention to my entry in the Register of Members’ Financial Interests, as I have a previous and a current professional involvement in the area. Parts of the planning process put up barriers—things like bat studies and crested newt studies. They are less of an issue, I imagine, in Camden and Hackney, but in other parts of the country they can delay developments by months or years. Bats and crested newts are important, but building houses is important as well, and sometimes the balance struck between those considerations is not quite right.

My sixth point relates to the London Land Commission. Its current mandate is simply to identify surplus public sector land. I would go further and give the commission, supported by the Mayor of London and the Department, the power to take on surplus public sector land—whoever it happens to be owned by—and to bring that land directly forward for development. Some 50%, say, of the proceeds would go, with no restrictions, to the previous landowner—the NHS, Network Rail or TfL—and the other 50% would be ploughed back into housing. There would therefore be an incentive for such organisations to co-operate with the process, whereas if the money just disappears somewhere else, they may not be very co-operative. I urge the Minister to give serious consideration to granting the commission the powers I have described.

The seventh point is to make the adoption of a local plan by local authorities—both inside and outside London—mandatory. At the moment, a number of

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authorities do not have local plans, which makes it difficult to bring forward housing. If authorities do not bring forward a local plan by a particular point—for example, by 2017—the planning inspector or DCLG should simply develop one on their behalf. Authorities have had plenty of notice, but a number have not developed a plan.

My final point is that community infrastructure payments should be used for infrastructure that is relevant to the local community. When local authorities take community infrastructure levy money, it can disappear into a black hole, and there is a temptation to replace capital spending elsewhere, which causes resentment among local residents. In the case of the project close to my house, there is a £7 million CIL payment, but the money could disappear to the other end of Croydon, which would mean that any pressures on schools, hospitals and local roads were not necessarily alleviated. I think the local public will be more accepting of large-scale development if they can see that it is directly linked to infrastructure improvements in their locality, and that will ease the passage of development.

I have tried to make eight constructive suggestions to help to alleviate the house building issues that London faces. I hope Members on both sides will agree with my diagnosis of the problem and with some of the solutions I have mentioned. I hope colleagues will come forward with other ideas in the next hour and 10 minutes and that the Minister will be able to respond to them.

Our city faces problems on housing. Progress has been made, but there is more to do. I therefore hope that we can work together, as London MPs, with the Mayor of London, the boroughs and the Department to alleviate the pressures our city faces.

Several hon. Members rose—

Albert Owen (in the Chair): Order. Before I call the next speaker, Helen Hayes, I remind Members that I will call the first of the three Front-Bench speakers at 10.30 am, so Members have about five minutes each. If everybody keeps to that, there will be no need for a time limit.

9.52 am

Helen Hayes (Dulwich and West Norwood) (Lab): I thank the hon. Member for Croydon South (Chris Philp) for calling the debate. The housing crisis is, indeed, the biggest issue facing London. More people than ever are on the waiting list for a council home, huge numbers of people are in expensive, insecure private tenancies, and there is a whole generation of people for whom owning their own home is an unattainable aspiration.

People with housing issues fill my surgery every week. The impact of those issues is wide-ranging, stretching from health problems, to educational disadvantage as a result of a lack of space to do homework, to young people being unable to put down roots in their communities because they are constantly subject to eviction following the end of private tenancies.

Within London’s housing crisis as a whole, however, there is a sub-crisis—the availability of affordable housing. In that context, the Government are seeking to introduce

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policies that will make delivering affordable housing much harder unless additional mitigating measures are put in place.

I wrote to the Minister for Housing and Planning on 21 July about the proposal to reduce social rents by 1%, and I am disappointed that I have yet to receive a response. I therefore want to bring to the debate the issues raised in that letter and to press the Government on them.

The London borough of Southwark, of which I represent part, is one of the largest social landlords in the country, responsible for 39,000 council homes and 15,000 leasehold properties. It also has the single biggest commitment to council house building of any local authority in the country, with a 30-year plan to build 11,000 new council homes. The plan was developed following an independent housing commission, which explored in detail housing needs and housing stock in the borough and the ways in which the council could best address the condition of current council homes and the need for current and future housing.

In 2014, as part of the 2014 spending review, the Chancellor set rents for the next 10 years at consumer prices index plus 1%. That clear financial position formed the basis for Southwark’s long-term planning for current and future council homes. The announcement in the emergency Budget that social rents will now be reduced annually by 1% for four years will have significant consequences for Southwark Council’s housing revenue account if the Government take no steps to mitigate the proposal’s impact. The announcement was made without consultation with, or prior notice to, the housing sector, giving councils and housing associations no opportunity to evaluate its effects or to make representations to the Government.

The proposal represents a fundamental shift in Government policy and is the most profound of a number of changes that, cumulatively, undermine the principles of self-financing and the ability of councils and housing associations to meet their long-term investment needs and contribute to addressing the housing crisis. It removes previous resource certainty, which is a key factor for any organisation seeking to make investment plans, because rental stream is critical to the viability of social housing providers’ business plans. It removes all local discretion and introduces de facto rent control for social housing, at a time when the Government are not looking at any measures to curb rents in the private sector.

The proposal’s stated purpose is to curb the housing benefit bill, but impeding social housing providers’ ability to build new social homes will significantly increase it, not reduce it. The emergency Budget contains no equivalent measures on the level of private sector rent or the definition of affordable rent—up to 80% of market rent in London—which have played by far and away the most significant role in increasing the housing benefit bill.

The proposal’s compound effect over four years on Southwark Council alone will be an annual cut of more than £65 million from 2015-16 levels. In the long term, the loss of resources, which will be compounded over the business plan’s 30-year life, will be of the order of £1.1 billion. That will have a staggeringly large impact on council homes in Southwark.

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During the last Parliament, the Government provided financial support to enable councils to freeze council tax. In a similar vein, I seek confirmation that they will provide additional funding to compensate for the impact that the proposal to reduce council rents by 1% will have on housing revenue accounts, to ensure the council can continue to deliver new council homes and invest in its current homes.

Taken together, the Government’s proposal on council rents and the proposal to extend the right to buy to housing associations—funded by the forced sale of high-value council properties—will mean a dramatic worsening of the housing crisis in London over the next five years, with no improvement whatever.

I am absolutely dismayed by the Government’s proposals, which fundamentally belie the suggestion that they have any understanding at all of housing finance or of the practical ways in which the housing sector delivers new homes and contributes to solving the housing crisis. I therefore hope I will get a response today to the points that I raised on 21 July.

9.58 am

Mark Field (Cities of London and Westminster) (Con): I congratulate my hon. Friend the Member for Croydon South (Chris Philp). I did not wish to be unkind to him earlier; the point I was trying to make was that housing in London is a toxic, complicated issue. In many ways, it is one issue on which all of us, as London Members of Parliament, need to try to work together, although there will, of course, be party political differences from time to time.

I hope colleagues will forgive me for focusing my comments not on social housing, which is close to my heart—it is an issue even in my constituency—but on foreign ownership. Property ownership in Britain is a key component of the social capital that enables a free enterprise system to have popular legitimacy and to function effectively.

Foreign investment in London property is so desirable because property here is widely considered to be relatively low risk, while offering high returns. There are a great many reasons for that, mainly stemming from the inclusive and welcoming society created by this nation—our forefathers—over many generations. All this so-called social capital cannot simply be bought; it has evolved over many centuries.

As the international enclave expands in central London boroughs, prices have also been driven up in the outer suburbs. It is getting tough for even the highest paid professionals to buy homes, as population growth exacerbates supply issues. High rent gobbles up funds for deposits, and prices get a boost from artificially low interest rates. There is something very wrong, here in the capital, when hard-working residents, our own constituents, who play by the rules, are completely priced out of their own housing market. These are the sort of people who will maintain and build London’s social capital and pass it on to the next generation. Property developers benefit from that social capital and it is only right that they play their part in preserving it.

Lest we forget, the fundamental purpose of residential property is to house people. It is a precious resource and should not routinely be locked away as part of an

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investment portfolio. Housing is a key component of every city’s eco-system and it may now be time to consider having residential developments that are open for purchase by only UK citizens and permanent residents. That would to some extent prevent non-resident overseas investors from bringing about what is, despite the honeyed words of Knight Frank and Savills, massive distortion of London’s property market.

Nations such as Switzerland and Singapore have strict restrictions on the foreign ownership of property. Yet they are global players that still operate successfully as financial centres. In Switzerland, only Swiss citizens and permanent residents can own property. The property market is a free market that operates within those rules. In Singapore most Singaporeans live in Housing Development Board properties, which only Singaporeans can own, some of which are by any standards luxurious. Singapore also has unrestricted ownership of non HBD properties—mainly high-cost luxury properties, which are open to foreign ownership. However, high stamp duty and penal capital gains taxes are levied on speculative purchases, if the property is sold within four years of securing ownership. I fully appreciate that for London to remain a dynamic, global city we must continue to welcome people from abroad to live, work, study and build businesses here. They will make an important contribution to our city’s culture. However, that is different from welcoming speculative capital that forces British citizens and other permanent residents who live and work here out of our city.

Another key aspect to examine is the reported reluctance of banks to lend money for residential property developments, so that developers look for off-plan purchasers, frequently in Asia, to deposit 20% of the value of their purchase to allow building to commence. That is an extremely complex issue and I fully acknowledge that, for example, Battersea power station would have remained derelict had it not been for the substantial boost afforded by some of that foreign investment.

Mr Lammy: Does the right hon. Gentleman agree that another element of that foreign ownership is dirty money being trafficked through London from Russia and other places, with 3.7 square miles of London owned by offshore companies—we do not know whom—and that we need serious regulation?

Mark Field: There are two issues. There is clearly some dirty money; it would be naive to suggest there is none. That said, there is also significant investment from Russia and the middle east that is not dirty money at all. As for offshore companies, we should not necessarily assume that there is a direct connection there. There is a range of reasons for using offshore financial vehicles in an entirely legitimate way. The important thing is to have a registration process—although it need not necessarily be open, because that would lead to all sorts of other difficulties—so that the authorities in the Channel Islands or Cayman Islands, for example, are well aware of what is going on.

I appreciate that others want to speak but want briefly, if I may, to suggest some qualifications that we might have in mind as criteria for purchasing into the London market. An individual should be either a British citizen or permanent resident, and the purchase should not be for a buy-to-let investment, but a home to live in.

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It should be possible to let the property out only after period of residency, and then only for a specified time before it would need to be sold. If the property were immediately sold, a penal capital gain would be levied, and it would have to be sold to people who qualified under the same criteria. Additional levies on speculative ownership and buy-to-leave-empty purchases might also need to be considered alongside a potential system for a higher non-resident council tax, which I have also discussed in the past.

I am trying here to provoke some thoughtful debate, and I recognise that some of my proposals will not necessarily prove entirely practicable. However, we should not lose sight of the foundations on which the high property prices in London are built. They have much to do with the huge amounts of social capital created by our constituents over many centuries. We are custodians of that social capital, and our duty is to grow it, improve it and bequeath it properly to future generations.

10.5 am

Siobhain McDonagh (Mitcham and Morden) (Lab): I congratulate the hon. Member for Croydon South (Chris Philp), one of my near neighbours, on getting the debate. London MPs have a serious job to do on behalf of our constituents. I want to make some suggestions about people’s ability to own their home in London.

A survey in July by the Evening Standard suggested that 82% of Londoners who currently do not own their home believe that it will always be outside their price range. A significant number of those people have good jobs by any estimation and want to buy, but cannot. I think the reason for that is that we have lost the connection—in a moral, civic and party sense—between owning a home and using housing as an investment. That is why, while I fully support the Government in their Budget plan to reduce the tax breaks on buy-to-let mortgages, I do not believe that they go far enough.

The flawed principle that landlords can claim tax relief on mortgage interest will remain. Landlords will get a slightly lower tax relief. The Government’s own documents on that cut suggest that they will save just £665 million a year by 2020. That is just one tenth of the £6 billion in mortgage interest claimed back in tax by landlords in 2012-13. A major contribution to tackling the root causes of the housing crisis seriously would be to get an even playing field between those attempting to get mortgages to buy, and those attempting to get them to let.

To touch on the issue of international investment in property, on which I would not want to compete with the knowledge of the right hon. Member for Cities of London and Westminster (Mark Field), it cannot be right that in a major new development in Thameside only a fifth of the properties were purchased by domestic buyers. In July a new £140 million development in Canary Wharf sold out in hours, and half the flats were bought by overseas investors not resident in the UK. A 2013 report by Knight Frank, taking a different tack, found that 28% of central London property buyers were non-UK residents. I challenge the suggestion made by the hon. Member for Croydon South that that is something that happens only in central London.

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I represent a suburban London constituency that is cheap by London standards; 18 months ago I had an email from a constituent who said, “Siobhain, you need to know what is going on. My daughter and her boyfriend want to buy their first one-bedroom flat”—in a part of Mitcham that no one would regard as palatial. When they turned up to try to put in an offer, there were 32 people in that one-bedroom flat. The person next to my constituent’s daughter and her boyfriend was a representative of a Chinese bank, which was interested in investing in it. How can that couple ever compete in that environment?

We need to find some solutions. I am sure there are many sophisticated suggestions. One that I want to suggest is a levy on property sold to non-UK residents. It would raise billions in tax revenue and that could be invested in affordable housing. Reducing demand from buy-to-let landlords and foreign property investors would also cut the spiralling housing benefit bill. Housing benefit paid to private landlords has now reached £9.3 billion, or 38% of the total bill. With fewer people able to buy homes, there is more demand in the private rental sector, which again puts up rents. If we removed mortgage tax interest from buy-to-let mortgages, we would release £6 billion. That is roughly the equivalent of grants to housing associations to build 100,000 new social homes—a real contribution to helping those who are having difficulties. We would also help the economy, because as we all know, for every £1 spent on housing construction, an additional £2.09 of economic output is generated.

I urge the Government to be more assertive in their efforts to encourage home ownership through the tax system, and to discourage the damaging crowding of the market by buy-to-let landlords and non-UK residents. We must enable people to fulfil that most basic of human desires—to own their own home—and so we must encourage and incentivise buying to live, and not buying to let.

We are all agents for change in our constituencies. I suggest that Members on both sides of the House look at the YMCA’s Y:Cube, which is about going back to the prefabs. They can be built on bad, difficult, and small sites, and they can be constructed for only 25% of normal construction costs. They can be built within five months of receiving planning permission, and the money is paid back in around 10 years, so it is a great investment. If anybody wants to know more about Y:Cube, I have a pack here, but I am sure that the YMCA would love to talk to them. We need to be broadminded about the solutions and consider things that we may never have thought of in the past, because it is a huge problem.

10.10 am

Mr Nick Hurd (Ruislip, Northwood and Pinner) (Con): May I be opportunistic and place on record my appreciation of the Queen’s public service to this country, Mr Owen?

My hon. Friend the Member for Croydon South (Chris Philp) is not so far down the road of public service, but he has done us a great service today by securing this debate on what one Member rightly described as the No. 1 political issue in the capital. It goes to the heart of the debate about what kind of London we want to live in and have our kids grow up in. I feel passionately that London, if it is to continue being the

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vibrant, brilliant place it is, must be somewhere that people of all ages and incomes can afford to live in decent homes, in neighbourhoods that are not segregated by wealth, class or nationality. In particular, it must be a place where young people feel that they really have a decent chance of buying or renting their own space and have the chance to get on.

I think most of us are here because we fear we are heading in the wrong direction, and that the pressures in this context are enormous. For me, it is an issue of social justice and intergenerational equity. It matters enormously, and I have detected, as I am sure that other MPs have, enormous change in sentiment in the area I represent, which is a relatively affluent suburb on the edge of London. Now, people cannot buy a one-bedroom flat for less than a quarter of a million pounds there, nor can they rent one for less than £1,000 a month. This issue is really concerning for people. The debate has changed from 2005, when I stood on platforms trying to get elected. The question then was, “How do we stop the development?”, whereas it is now, “Where are my grandchildren going to live?”, and “How do we build what we need to build without spoiling the area?”

There is no easy answer to those questions, but this is a fundamental challenge for our generation of politicians, because as others have said, the problem is likely to get worse, given the demand pressures, not least due to population increase. This is one of the biggest challenges for our generation of politicians. The past is less interesting than the future, but we have to recognise that Governments of both colours have failed the capital in the past, in terms of building the number of homes required. As hon. Members would expect me to say, the coalition Government deserve a great deal of credit for stopping the rot. I will leave it to the Minister to give the roll call of achievements; I think it is substantial.

The Mayor of London is not here today, but I think he also deserves great credit for changing the tempo and ambition, and for some really interesting innovation, particularly in helping working families on low incomes and giving them the support that they need. There have been a lot of very interesting initiatives and very good projects that I hope his successor—with respect to other candidates, I sincerely hope it will be my hon. Friend the Member for Richmond Park (Zac Goldsmith)—will turbo-charge.

However, I guard against looking simply at incremental reform. I think we need to be more radical. The absolute priority is increasing the supply of affordable homes. This cannot just be about increasing the volume of building, because that will take too long. It is largely about what gets built. The starting point—if it takes a Conservative to point this out, so be it—is recognising that the market will not deliver, because, certainly in my area, it delivers what the market can afford, and not necessarily what the community needs. I believe that the state has to be more radical in terms of intervention. Local authorities have to get back into the business of building. We have to do big Conservative things to open up this market, which is too opaque. The power is concentrated in too few hands. We need more competition, more transparency and more innovation in how stuff gets designed, built and financed, and we need to bring in the public in a much bigger way, so that they feel a bigger sense of buy-in.

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The debate is normally framed around power, land and money. I simply add a concern about skills. It was put to me by the director of a major development company that we can have the best policies in the world, but we do not have the people or skills to build what we want to build, and we need to address that.

In terms of power, I am a strong believer in decentralisation. I would like to see the next Mayor have more power, and we should be open to the idea of a new delivery agency. We need to question why Transport for London and the NHS think that they should be in the redevelopment business. I support the London Land Commission, but we need more clarity around the presumption and policy priority relating to public land. Is the priority to maximise the value to the taxpayer or to maximise value to the community? We are seeing that with the potential development of Northwood and Pinner cottage hospital in my constituency. The situation is too vague, and it is frustrating.

I am not at all sure that extending the right to buy is the right policy priority for London at the moment. I am open to persuasion. I want to be assured that it is compatible with a big increase in supply, and I certainly support the Mayor in his call for all proceeds of the policy to stay inside London.

Last but not least, I want to see much more innovation in design and financing. The hon. Member for Mitcham and Morden (Siobhain McDonagh) is entirely right. Organisations such as Create Streets show what can be done to redesign failing estates. We can build in different, modern ways. Laing O’Rourke is leading the way in the UK with important thinking on modular design that transforms the cost and timing of building. We should be doing more than dipping our toe into the waters of giving people the freedom to build their own home. We should be giving local authorities more freedom to explore new vehicles that give them more flexibility to deliver the homes that they see are needed. Enfield, Sutton and Ealing are leading the way with that.

We need much more creativity in giving opportunities for new sources of finance to come in that are not rapacious, but want to support and invest in infrastructure. Sir Merrick Cockell gave a fascinating speech in which he talked about the potential for London local authority pension funds to collaborate. They want to invest in infrastructure and they need new opportunities. He talked about the potential of municipal bonds and retail bonds to get communities involved in the opportunity to invest in their area. I was proud to lead our work in Government on developing social investment as an asset class. We lead the world in that, and there are pioneers in that area, such as the Cheyne Social Property Impact Fund, the Real Lettings Property Fund, and the Golden Lane Housing bond. Those organisations are looking for opportunities to invest for social benefit in this area, and what they are missing is opportunity. The problem is not supply of capital, but supply of opportunity, so I think there is a huge opportunity for local authorities, MPs and the Mayor to work together and reach out to designers, architects, developers, investors and pioneering local authorities who want to do things in different ways. That is what we need if we are to get serious about tackling the No. 1 issue in the capital that we love.

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10.18 am

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): In the four minutes or so I have available, I want to acknowledge the comments made by my hon. Friend the Member for Southwark—[Interruption.] Sorry, my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), who represents the borough of Southwark, because she painted exactly the picture in my constituency. She laid out very comprehensively the financial challenges of building homes for social housing providers. I find myself, perhaps not for the first time actually, in total agreement with the right hon. Member for Cities of London and Westminster (Mark Field), because there is a real issue in my constituency too about overseas developers, and I will touch on that.

I want to cut to the issues that I want to raise with the Minister, but I need to add that my surgeries, too, are full of people in great distress. When I started out in politics about 20 years ago, housing was a huge issue. It was a case of having to visit people in bed and breakfasts; there were all those sorts of problems. Things got a bit better, but they are now worse, I think, than they have ever been. People are so distressed. They are living in overcrowded conditions, and there is no way out. They are put in temporary accommodation a long way from home and have to remove their children from school. They are unable to get a foot on the housing ladder, find it a struggle to pay the rent and have no security of tenure in the private sector.

I should just alert Members to my entry in the Register of Members’ Financial Interests, Mr Owen. I let a property, so I understand the technical side for landlords. There is a lot of bleating, frankly, from some of the landlords’ associations about the challenges of keeping rents at a rent escalator level, so that when someone goes into a tenancy, they know how long they will be there and what the rent will be. I do not think that there is a problem for any landlord, big or small, in managing a business model along those lines.

Let me cut to the issues that I would like the Minister to address. I agree with the right hon. Member for Cities of London and Westminster that we need to tax the overseas investors. I am not an expert in how that should happen, although the Select Committee that I chair may well end up pursuing that issue. It is a real issue. I commend to the Minister the map that Private Eye did. It simply looked at properties that were sold and whom they were sold to. The situation is shocking. Let me just mention my area. There are flats down the road from me. As my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) said, small properties that should be going to local first-time buyers are being bought by overseas companies. They are somehow getting a tax break for doing that. That is not the sort of investment that we need. I recognise that huge sites, such as Battersea power station, may need to attract overseas investment, but this is taking away from local people, so the Minister and the Government need to look at that.

The Government need to go back to the drawing board on the right to buy. As I said in my intervention, taking family-sized properties away from Hackney council to backfill for the sale of housing association properties is double-hitting the affordable housing stock in my area, where it is increasingly unaffordable for someone on the minimum wage even to rent a property, certainly

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without housing benefit. I recently heard of a nurse moving into a new housing association development who was reliant on housing benefit from day one. That is my other point: the Government must grasp the nettle of housing benefit. Subsequent Governments of differing hues have not done that. When Sir George Young, who was formerly in this place, was a Housing Minister more than 20 years ago, he said, “Let housing benefit take the strain.” Housing benefit is now taking the strain to a ridiculous extent. If that money were better invested, we would make a dent in the problem.

This is something the Minister could easily do. Certainly my party had discussions with the Council of Mortgage Lenders before the last election about allowing longer tenancies in the private sector. It is the mortgage lenders that, ridiculously, suggest that a year’s contract is more secure. Frankly, a tenanted property in London often represents a more secure income for the mortgage lender than that from someone in a precarious job. That is something the Minister could quickly act on, and I urge him to do so.

Dr Rupa Huq (Ealing Central and Acton) (Lab): We are hearing a list of questions for the Minister, and I just want to throw in a few of my own, because although I am new here, even I am getting a sense of déjà vu. I led a similar debate almost exactly two months ago, and we did not have any answers then, so I just want to throw in three questions from then.

Albert Owen (in the Chair): Order. I will do my best to fit the hon. Lady in at the end, but she must follow procedures. Make an intervention by all means, but do not ask a list of questions.

Dr Huq: It was just the mention of Sir George Young that reminded me, because he is a predecessor of mine.

Meg Hillier: In the 30 seconds remaining to me, I will rattle through my points. Shared ownership needs to be reviewed. Recently on the market in my constituency was a £1 million shared ownership property. One would need to earn £77,000 a year to get a quarter share in that property. That is not computing; it is not working, and it needs to be reconsidered in London.

The Government could and should consider co-operative ownership. The garden suburbs were on that model. As my hon. Friend the Member for Mitcham and Morden said, there is an opportunity to think more broadly and innovatively. Perhaps there could be a competition for housing solutions, and that could be one of them.

We need to give London much more autonomy. We need to devolve more property tax, so that the London Mayor, whatever party they are from, has the control to be able to grapple with this issue in the London market. We need to have a much better strategy for public land. Hon. Members have already talked about this in the debate. Her Majesty’s Treasury is demanding the highest pound return for the taxpayer. That sounds admirable, but the better dividend locally for communities would be to have affordable housing for local purchasers and local renters on the sites. It is common sense to look at the way land is dealt with, so the London Land Commission is a step in the right direction.

The Minister, I hope, will recognise that housing is a huge problem for our constituents. That has to be grappled with now or it will remain a problem for the

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next 20 years. It is going to take a long time to solve as it is, and if he does not tackle it now, it will become worse. We will see London hollowed out, with key workers and people on low incomes unable to live in the areas in which they work and which they serve. That will be devastating for the social capital of London.

10.24 am

Zac Goldsmith (Richmond Park) (Con): It is a pleasure to speak under your chairmanship, Mr Owen. I congratulate my hon. Friend the Member for Croydon South (Chris Philp) on having initiated one of the most important debates that we can have in London. I want to echo a point made by my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), who talked about the changing dynamic in his constituency. I have no doubt that that is echoed all the way around London. When I was selected in 2008 to be the Conservative candidate for Richmond Park and north Kingston, the main emphasis in the hustings, in the open primary, that decided it in the end was who was going to fight off the inappropriate development best—who was going to take it to the developers. And the very same people, just a couple of months ago in the run-up to the most recent general election, were asking in the hustings, “How on earth are our children going to get on the housing ladder? There is no prospect of it at all.” There has been a sea change in public attitudes, and I do not think there is any doubt that housing is the No. 1 concern in London. The population is soaring and will continue to soar. We expect the population to hit 10 million over the next 15 years and we are not building anything like enough to match that demand, so volume does matter.

The average price for the first-time buyer in London is, as has been said, more than £400,000. That requires a deposit in some cases of about £100,000 and an income of about £75,000 or £76,000 to manage the mortgage. Rent is more than double the national average. Even in the least expensive postcodes in London, renters on the London living wage can expect to spend more than 40% of their income on rent, which means that they have no chance of saving for a deposit in order to get, eventually, on to the housing ladder. Therefore, Londoners are already being priced out of their own city. That is hurting families, but also our competiveness as a city.

There is no single answer, but a lot can be done. In the two or three minutes that I have left, I will not be able to talk about some of the really meaty, interesting issues such as devolution of property taxes, which was touched on in the last speech, or another issue that I do not think has come up, which is putting empty homes back on the market. There are about 80,000 empty homes in London that should not be empty. The current Mayor has done more than, I think, any other British politician in living memory to bring empty homes on to the market, but we have a long way to go and we can be more robust.

However, the bottom line is, whether we like it or not, that we need to build more—45,000 to 50,000 homes every year just to avoid a crisis. The question then is how we do that. There is the problem of land banking, which has been raised. There are more consents to build than developments actually happening, but it is not just the private developers that are land banking. As has been mentioned, there is an enormous amount of publicly owned brownfield land—it is owned by the public sector. TfL alone owns the equivalent of 16 Hyde parks. The

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NHS owns an enormous amount of land that it is not using. A typical local authority can own up to one third of the land in its borough. We can deliver the homes that we need in London without even touching the green belt—without encroaching on our green spaces at all. I strongly welcome the initiative by the Mayor and the Government. The London Land Commission will provide the inventory that we need. We do not have the information at the moment, but we will shortly.

However, to get building we also need to address a problem in the development sector, which is that it has increasingly become an oligopoly. A very small number of mega-developers account for the vast majority of the building that we see in London and, in turn, demand unrealistic levels of return based on often spurious “viability tests”. There is a need to open up the viability test and to help local authorities with the expertise they need to deal with the developers and with that process.

To build new homes, we need three things—I am aware that I have only two minutes left, so I am going to rush. We need land, which we have. We need planning, which, between the local authorities and the Mayor, we have. It is possible to de-risk development with the powers that the Mayor and the local authorities have between them. And we need finance. It is not difficult to get that finance, for precisely the reason that we have heard from a number of hon. Members. There is an overwhelming appetite among people around the world to invest in London. At the moment, that is causing serious resentment, because buildings are being built and then bought by people who have no intention of living in those buildings. “Safety deposit boxes in the sky” is how they are often described.

That appetite is there, but it does not have to be a negative; it could be a positive. If we channelled that investment in order to deliver the homes that Londoners need—affordable homes for purchase and for rent on publicly owned, publicly available brownfield land—we could turn that negative into an overwhelming positive. We could create a pan-London investment vehicle designed to attract that investment. There are people who, because of the volatility and dangers in the world around us, want to put their money somewhere safe—that is, in London property. We could create that investment opportunity for them and for the pension funds, which want nothing more than long-term investments—low risk and medium return. This is ideal for London property. We need to find a way of creating that vehicle to attract and then channel that funding in such a way that it does good.

I note the comments made by my right hon. Friend the Member for Cities of London and Westminster (Mark Field). I very much agree with the thesis that he put forward. We need to look carefully at the ideas that he suggested, some of which I think absolutely do need to be implemented.

In my remaining minute, let me say that one huge opportunity we have is to redevelop some of the poorly designed estates that were put up in the ’50s and ’60s. My hon. Friend the Member for Ruislip, Northwood and Pinner mentioned Create Streets, an organisation that has been looking closely at this. It takes the view that if we were to redevelop about half of London’s 1950s and 1960s estates, we could increase density even while lowering the height of these buildings, which would improve their attractiveness and quality. By doing so, we could potentially provide the affordable homes

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that we need for the next 10 to 15 years. There is an enormous amount of work to do there, and it is a massive opportunity.

Let me end by saying that whichever route we take, it is essential that we build well; that we work with, not against, communities; and that we build homes that enhance communities. We know how big the challenge is, and if we build badly—if we dump hideous buildings and disproportionate developments on communities—we will exhaust Londoners’ appetite for the level of development that we will need if we are to have any chance of delivering the required number of homes.

Albert Owen (in the Chair): Order. This debate has been oversubscribed, and just to be fair, the Minister has agreed to give two minutes at the end to the mover of the debate.

Chris Philp: One minute.

Albert Owen (in the Chair): It will be down to one minute. The Minister has offered two minutes, and we are using up time arguing over a minute or two. The hon. Member for Ealing Central and Acton (Dr Huq) and the right hon. Member for Tottenham (Mr Lammy) will each make a two-minute contribution. If the Front-Bench spokespeople keep their contributions to eight minutes each, we will get everybody in. David Lammy—two minutes, and you will be cut off.

10.31 am

Mr David Lammy (Tottenham) (Lab): For the last time, the hon. Member for Richmond Park (Zac Goldsmith) is cutting my time short. He demonstrates well why he should remain in this House.

I want to emphasise solutions. It is important to recognise that there has been a collapse in London for those who require social homes. If the average income is £32,000 in London, many Londoners will never be able to own a home of their own. If the Government continue to extend right to buy to housing associations, more social homes will come off the market. If they do nothing about those who exercise the right to buy, which for many is effectively a discount of hundreds of thousands of pounds from the taxpayer on social homes, there will continue to be a collapse in social homes. It is of concern to me that despite quite a lot of cross-party consensus, little is said by the current Government on social homes and where we will see them.

We need new solutions. What we heard from my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) was absolutely right—prefab, discount homes for young people at prices that they can afford. That is why, in my bid to be London Mayor, I have suggested that we issue bonds and enable people to build at a discount on public land. We cannot build in such a way on public land if we continue to sell it at best value to the highest bidder. TFL land and Scotland Yard have been sold off to the highest bidder. Local authorities are selling off land to the highest bidder. That is public money and public land, so it should absolutely be used to build discount homes that people can properly afford. We need a bond issue. Finally, we need to revisit green-belt designation.

Albert Owen (in the Chair): Order.

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10.33 am

Dr Rupa Huq (Ealing Central and Acton) (Lab): I want to raise some questions that remained unanswered when we debated the subject in July, and I wonder whether we will have better luck with this Minister than we did with the previous one. I congratulate the hon. Member for Croydon South (Chris Philp) on securing this vital debate.

The average age of an unaided first-time buyer in London is now 37, and at the debate in July I asked what the Minister predicted that would be by the end of this Government’s term in office. I also raised the question of affordability. The hon. Member for Croydon South talked about Old Oak Common, where 24,000 dwellings are coming on stream. The Mayor of London’s definition of affordable is 80% of market rent, but is that realistic or desirable? Can we change it? I had no reply to that question.

The right hon. Member for Cities of London and Westminster (Mark Field) made some interesting comments about overseas matters. I remember asking in the previous debate whether we would soon be “turning Japanese”. In that country, people bequeath a mortgage from generation to generation. Do we foresee that happening? Regarding overseas investors, I asked the Minister who responded to the debate in July whether he would consider including a provision in his next housing Bill banning overseas and off-plan investors from buying future new builds, so that local London first-time buyers would at least have a chance. That was the No. 1 thing for me as a candidate, and it is the No. 1 thing in my postbag and inbox as an MP.

Recently, I posted a picture when I was door-knocking in Stephenson Street, NW10—a cobbled road of terraced housing that is often used in period dramas, and that was in the video for “Our House” by Madness. I posted it to say what a fantastic cultural heritage we have in East Acton ward, and somebody posted underneath asking, “Have you looked at what these are going for? The last one sold went for half a million.” Those houses were not meant to be for rich people. I fear that London will experience a brain drain, and that in time it will be only for the oligarchs and the super-rich.

Albert Owen (in the Chair): Order.

10.35 am

Corri Wilson (Ayr, Carrick and Cumnock) (SNP): It is a pleasure to serve under your chairmanship, Mr Owen. I thank the hon. Member for Croydon South (Chris Philp) for securing the debate and bringing the matter to the House for discussion.

As a new MP looking for a flat in London, I encountered some of the problems that have been talked about today. The number of people living in London has increased by a fifth, while the number of homes available has not increased at the same rate.

As the third-party representative summing up the debate, I would like to share some points from north of the border, if I may. The right to buy will end for all council and housing association tenants in Scotland on 1 August 2016. In 2013, 185,000 people were on the waiting list, while only 54,000 council houses were available to let. Although the right to buy has driven up home ownership in Scotland, it has contributed to an

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acute shortage of social housing. The abolition of the right to buy will keep 15,500 homes in the social sector for the next decade.

Albert Owen (in the Chair): Order. I remind the hon. Lady that the topic under discussion is affordable homes in London. I would appreciate it if she addressed that. I understand that she wants to make comparisons, but that is the subject that we are discussing.

Corri Wilson: Absolutely. In Scotland, we have shown that investment in affordable housing can keep costs down, create jobs and, importantly, help people to live better lives. As has been mentioned, it is not only about buying. We have actually taken over abandoned properties, repaired them, brought them up to housing standard and let them out. The SNP MPs in Westminster will push for a funding boost for affordable housing from the UK Government to help build more homes in Scotland and across the UK. Specifically, we will call for the UK Government to put in place a new target to build 100,000 affordable homes each and every year.

10.37 am

Dr Roberta Blackman-Woods (City of Durham) (Lab): It is a pleasure to serve under your chairmanship again, Mr Owen. I start by paying tribute to Her Majesty the Queen on becoming the longest-reigning UK monarch. I congratulate the hon. Member for Croydon South (Chris Philp) on securing the debate. We know that this is an important and serious issue, not least because this is the second time that we have debated it in this Chamber in recent months.

The hon. Member for Croydon South carried out a forensic analysis of the lack of availability and affordability of housing in London. When he went through his eight points, I thought that he had lifted about five of them directly from the Lyons commission report that we produced before the last election, which was widely acknowledged as being a sensible blueprint for how we should go about increasing supply of, and access to, housing. I urge him to read the report again and to talk to people about it, because that would be very helpful.

I take issue with the hon. Gentleman on one point, which is the effectiveness of planning departments. Planning departments in this country are extremely effective, by and large. Figures from the Department show that 80% to 90% of applications are assessed on time. We need to acknowledge that planning departments are going through a really difficult time in many areas of the country, because resources are being taken away from them under austerity measures, but they are receiving more applications. How will the Minister ensure that planning departments are adequately resourced to carry out the tasks before them?

There is consensus on both sides of the Chamber on the problems facing Londoners in accessing not only housing but affordable housing, and it is good that that is the subject of this debate. There is also a strong degree of consensus on the solutions. I hope the Minister is listening and will take on board the suggestions from Members on both sides of the Chamber, but I will focus on the interesting comments made by the right hon. Member for Cities of London and Westminster (Mark Field), my hon. Friends the Members for Mitcham and Morden (Siobhain McDonagh), for Hackney South

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and Shoreditch (Meg Hillier) and for Ealing Central and Acton (Dr Huq), and my right hon. Friend the Member for Tottenham (Mr Lammy), on how to address international investors. They have suggested what can be done to reduce the number of homes sold to international investors, and I look forward to the Minister’s response.

Affordable housing is a serious issue that we have often debated in this House. There is a significant problem with the supply of houses in London. The solution is not only about supply, but supply is important. Estimates of the need for additional house building in London fall within a range of 50,000 to 80,000 a year, yet there were only 21,900 net completions in 2012-13. That is obviously far below the required target, but the goal set by the Mayor’s office leaves a lot to be desired. The Mayor’s housing strategy contains an ambition to build 42,000 new homes a year for 20 years, which does not reach even the lowest estimated requirements. A consequence of that lack of supply and lack of building is that the cost of housing in London is rising.

London’s population has increased by 14% since 2002, and the number of jobs has increased by 15%, but the housing stock has increased by only 9%. As many hon. Members have demonstrated, that 9% does not go to local people. A number of colleagues have demonstrated that people either cannot find affordable social housing or are unable to buy a home due to rocketing costs, yet the Government seem to be doing very little to stem the tide and, in some respects, are exacerbating the problem. Shelter and other organisations have for some time been highlighting how a whole generation of young people in London are being priced out of the housing market.

There is no way that supply will be able to meet demand if building affordable homes—I stress that we are talking about affordable homes—is not one of the Government’s top housing priorities. Local authorities in many areas of London are doing amazing work in trying to build new homes for social rent, and I cite Islington as an example, but they are very concerned that, under the Government’s new proposals, those homes will be sold off before they even house a social tenant, which cannot be a sensible policy. The number of homes being built for social rent has fallen to a 20-year low, against a rising population in London who require such homes.

For every 11 council houses sold last year, just one was built to replace them, which, as a number of my hon. Friends have said, raises questions about what will happen when the right to buy is extended to housing association properties. That is a real issue for the Minister to address today. What will the Government do to ensure that houses sold under the right to buy are not only replaced, but replaced in the areas where those houses have been sold? Otherwise, the replacements will not help local people to access social-rented housing.

The Chancellor’s “pay to stay” scheme is also exacerbating the issue. By making households in London that earn more than £40,000 a year pay market rents, he is undermining the very concept of social housing. He is essentially pricing people out of a system that was designed to help them. The £40,000 London threshold could be met by two adults earning £20,000 a year, which is way below the average wage. If that is a family with children living in a two-bedroom home, they would be paying a weekly rent, at average market rates, of £322, which would probably be rising daily. They would

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be paying some £1,300 a month, which is essentially the entirety of one parent’s monthly pay packet. That is without including council tax, utility bills and household expenses.

London’s economy depends on workers in lower-paid jobs, and we cannot expect people to be willing to stay to work in a city where all their wages are spent on rent. That point has been forcefully made by the Chartered Institute of Housing, which says that pay to stay would create

“devastating costs for social housing providers”

and put them in a

“precarious position ethically and in relation to their charitable status”.

The Chartered Institute of Housing is saying that the scheme is unworkable. That charge is being made not by the Opposition, although we support what the Chartered Institute of Housing is saying, but by a respected housing organisation. What will the Minister do to address those points? The Government keep telling us that they want to get the housing benefit bill under control, but they seem to be doing very little to address the issue other than reducing rents, which, as my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) said, is creating ongoing problems for housing associations, possibly affecting their future building programmes.

What is happening to housing in London is fundamentally changing the city as people are pushed out of the central boroughs into outer London, even now, because of the pressure. And people are finding it increasingly difficult to afford housing in those outer boroughs, as my hon. Friends have demonstrated. How will people in London access affordable housing? What we need from the Minister are not one-off initiatives that do not add up to much, and often exacerbate the situation, but a long-term plan to create more affordable housing in London.

10.48 am

The Minister for Communities and Resilience (Mr Mark Francois): It is a pleasure to serve under your chairmanship, Mr Owen. It is a privilege to be speaking in Parliament on the day that Her Majesty Queen Elizabeth II becomes our longest-reigning monarch, which is a truly remarkable achievement. We all wish her well for the future.

A great number of points have been raised in this debate, and I will do my best in the limited time available to cover as many as possible. I recognise that the demand for affordable housing in London is challenging, and the Mayor clearly has a significant task ahead to meet the needs of the growing population in such an important world city. That is why the Government remain committed to working with him to address the issue, which is important to people across the capital. My remarks will focus in particular on affordable housing and our plans to help to increase supply in the capital over the years ahead.

I am pleased to say that we have an encouraging track record over the past five years in delivering affordable homes, with more than 260,000 delivered in England since 2010, including more than 67,000 in London, of

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which more than 3,000 were delivered in the Croydon borough of my hon. Friend the Member for Croydon South (Chris Philp).

Ruth Cadbury: Will the Minister give way?

Mr Francois: I have a lot to cover. If the hon. Lady is patient for a moment, I might be able to give way later.

We exceeded our 2011-15 affordable homes target by 16,000 homes, delivering nearly 186,000 affordable homes during the period. In fact, more council housing has been built since 2010 than in the previous 13 years. To give one example in my hon. Friend’s constituency, the Cane Hill development, which he mentioned, will include up to 675 homes, including 25% affordable homes and 80% family-sized homes. It will also bring back into use three local listed buildings, which are currently derelict, and provide new open public space. It is a very good example of the kind of mixed use development that can take place in London and that can help boost affordable housing along the way.

Several hon. Members mentioned foreign ownership of properties. My right hon. Friend the Member for Cities of London and Westminster (Mark Field) made a number of suggestions on that point; I am not sure that I agree with all of them. I think that he was provoking debate and I suspect that he succeeded. He referred to capital gains tax at one point. On that specific point with regard to overseas purchasers, he will know that the autumn statement 2013 announced that from April 2015, the Government will introduce capital gains tax on future gains made by non-residents who sell residential property in the UK. That change addresses a significant unfairness in our capital gains tax and property tax regime. That is perhaps one point of comfort that I can offer him, and of course, given the timings, that change is in effect now.

My hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd) mentioned, among several points, the so-called skills gap in construction. It is worth mentioning that the Construction Industry Training Board has reported a rise in apprenticeships. In a 40% increase on 2013, 15,010 new apprenticeships started in 2014, so in fairness the CITB is playing its part to bring people, including young people, into the construction industry to provide the skills that we need for the future.

I talked about initial steps for affordable housing, but we need to go further. We have a big ambition to deliver 275,000 new affordable homes over the course of the Parliament. It will be the fastest rate of affordable housing building in the past 20 years. Delivery in London will be a vital element of that programme, and our officials are working with the Mayor, the GLA and London Councils on increasing capacity to make that ambition a reality to benefit the people of London.

Nearly every Member who spoke talked about the need to increase the rate of affordable house building in the capital, so I will come to that point specifically. The Mayor aims to build at least 42,000 homes a year. The 2015-18 programme is already under way. The initial programme was announced last summer, including the Mayor’s housing covenant 2015-18, and the GLA are inviting further bids. Last year, the Mayor exceeded the target for the number of affordable homes to be built in London, building 17,914 affordable new homes. That was the highest number of affordable homes delivered

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since current records began in 1991. The Government have invested £3 billion through the GLA from 2011-12 to 2014-15 in housing, Olympic legacy and economic development. An additional £1.45 billion will be invested in housing delivery for the period 2015-18.

In addition, to boost the supply of affordable housing, the Mayor has announced 18 out of a promised 20 housing zones in London, bringing the total number of homes to be built as part of that specific initiative to more than 50,000, of which nearly one third will be affordable to buy or rent. The Mayor expects to confirm two further zones—to complete the 20—later this year.

As several Members mentioned, we have launched a new London Land Commission, which first met in July, with a mandate to identify and release all surplus brownfield land owned by the public sector in London. Led jointly by the Government and the Mayor, the commission will take a central role in driving the delivery of new homes. For example, with the amount of property held by Transport for London, there is a possibility of developing housing, including affordable housing, around some of the stations across the capital.

Ruth Cadbury: rose—

Stephen Hammond (Wimbledon) (Con) rose—

Mr Francois: I will take an intervention from the hon. Lady first and then one from my hon. Friend. I must be quick.

Ruth Cadbury: I thank the Minister for giving way. The Minister for Housing and Planning wrote to me last month to confirm that the Government believes that

“the best way to encourage affordability”

—his term—is by “increasing supply”. I thank the Minister for his description of the supply he is bringing. If that is the sole policy driver, I would like to know what formula the Government are using to deliver that market-based policy. To put it another way, by what level will private rents in London come down with the delivery of that 42,000?

Mr Francois: On the formula, to help with the increasing supply of affordable homes, we are making debt cheaper for housing associations to deliver more affordable housing through the affordable housing guarantee scheme. It aims to deliver up to 30,000 homes through guaranteeing up to £3.5 billion of debt.

A number of hon. Members mentioned the matter of buying property in London.

Stephen Hammond: The Minister is a absolutely right that the London Land Commission has the ability to be transformational. I urge him to use the good offices of Government to ensure that the whole of the public sector complies. Parts of the public sector have a history of dragging their feet in bringing the land forward. The Government can play that inspirational and effective role.

Mr Francois: My hon. Friend knows a lot about the subject and his point is well made.

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The Mayor’s London housing strategy includes a commitment to double the number of First Steps homes —the single brand for shared ownership products in London—delivered in the capital by 2020, and to double it again by 2025, helping 250,000 Londoners into home ownership.

Several hon. Members mentioned planning. The Localism Act 2011 gave the Mayor strategic housing and regeneration powers and enabled the establishment of mayoral development corporations to support the regeneration the Queen Elizabeth Olympic park—it is very fitting to mention that today—and Old Oak Common and Park Royal. Since then, the Government have invested more than £3 billion and housing delivery has increased. In 2014, 52,000 homes were granted planning permission in London, up from 45,000 in 2013. Those figures include both minor and major schemes and are consistent with the national total of 253,000 for 2014.

The Government have helped to unlock major regeneration sites in London to deliver new housing. Those include the Greenwich peninsular, with 10,000 new homes, including approximately 3,270 affordable homes for rent or part-rent, 600 student beds, and 3.5 million square feet of commercial floor space. Of the 10,600 new homes at Barking riverside, 31% will have three or more bedrooms and more than 40% will be affordable. Of the 10,000 new households at the Queen Elizabeth Olympic park, around one third will be affordable housing, with many built for long-term rent, as well as to buy. Five new neighbourhoods provide play areas, schools, nurseries, community spaces, health centres and shops, with places to relax, play and exercise all within easy walking distance.

Some hon. Members mentioned changes in rents and the pressure on housing associations. It is important to bear in mind that housing associations generated a surplus of about £2.4 billion in 2014. The sector is financially robust and will be able to deliver the efficiency savings that the change in rental costs implies. To help them further, the regulator will be on hand to help housing associations consider how they can deliver greater efficiency and value for money.

In the few minutes that I have had, I hope that I have managed to outline the number of initiatives under way to increase the supply of affordable housing in London. The Mayor has an extremely proactive programme of attempting to do that. There is a step change in the number of affordable houses being aimed for in London. He is rolling that programme out and making progress. It is incumbent on us all in this debate, which has been conducted in a relatively non-partisan manner, to encourage the Mayor and his successor—whoever they may be—to continue the programme of providing affordable housing in London and giving the people who live in our great capital city a good place to live. On that point, I will keep my word and give just over one minute to my hon. Friend the Member for Croydon South to conclude the debate.

Albert Owen (in the Chair): I am grateful to the Minister.

10.58 am

Chris Philp: I thank hon. Members on both sides for coming today and contributing to a very important debate. We heard how challenging the affordability climate is and how hard it is for our constituents,

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particularly young constituents, to get on to the housing ladder from the hon. Member for Dulwich and West Norwood (Helen Hayes) and my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd). It is in the interests of our country and our city to address those issues, principally by bringing forward more supply. We heard a lot about bringing forward brownfield projects and public land projects, to which the right hon. Member for Tottenham (Mr Lammy) referred. I was struck by the comments about overseas buyers from the hon. Member for Mitcham and Morden (Siobhain McDonagh) and my right hon. Friend the Member for Cities of London and Westminster (Mark Field); that would be an interesting area for further research, at least to know the facts, which are not completely clear. Doing more work to confirm the exact figures would be productive.

The debate has been very productive. I thank the Minister and hon. Members for joining us this morning.

Question put and agreed to.

Resolved,

That this House has considered affordable housing in London.

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Contaminated Blood Products

11 am

Ms Margaret Ritchie (South Down) (SDLP): I beg to move,

That this House has considered contaminated blood products.

I am delighted to serve under your chairmanship Mr Owen. I am also pleased that the Under-Secretary of State for Health, the hon. Member for Battersea (Jane Ellison), is here to respond to the debate.

To set the context—[Interruption.]

Albert Owen (in the Chair): Order. Could those leaving the Chamber please do so quickly and quietly?

Ms Ritchie: Thank you, Mr Owen.

To set the context for this debate, it is my duty and responsibility to acknowledge the very good work of the all-party group on haemophilia and contaminated blood. One of the joint chairs of the group, my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), is here today for this debate. The all-party group published its report on contaminated blood products in January and clearly outlined the requirements of Government in respect of this very vexatious issue.

I secured this debate to highlight the cause of the victims of contaminated blood and blood products, in particular my constituent, Brian Carberry, a haemophiliac from Downpatrick in South Down. Along with all the other victims, he has waited too long for truth and an acknowledgement that the Government, through the Department of Health, imported such contaminated blood products from the USA in the 1970s and 1980s. The victims have waited a long time for proper compensation and access to drugs that are currently being assessed by the National Institute for Health and Care Excellence, and they need those drugs before stage 2 of the illness, which causes liver dysfunction, sets in.

I hope the Minister can today provide a detailed outline of how she will address this issue once and for all. Two thousand people touched by this tragedy have already died, and that number is rising, as people die waiting for the Government to make a final determination. I urge the Minister today to bring this prolonged delay to an abrupt close with a programme of action, including a commencement date for the consultation, which was announced back on 17 July, and the moneys to help those who have endured endless pain, suffering and anxiety for so many years.

In the ’70s and ’80s, around 7,500 people were infected with hepatitis C or HIV as a result of treatment with blood products provided by the NHS. Many of those people were being treated for haemophilia. Those viruses did not just transform their own lives; their families’ lives were also turned upside down, and some of them, including my constituent, can no longer work.

The several thousand people treated with contaminated blood and blood products by the NHS have been denied the real financial security, and the health and social care that they need. The support currently in place is only partial and does not offer the full and final settlement that those affected and their families need to live with dignity, and it falls far below the equivalent compensation

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in the Republic of Ireland. The development in support, financial and otherwise, over the years has been haphazard and has been delivered much too slowly. Contaminated blood victims already face substantial financial demands because of the nature of their infections and the inadequacy of their financial compensation.

One lady suffering from the infusion of contaminated blood products told me last week that some sufferers are denied even the basic stage 1 payments, even though they have a weakened and compromised immune system, and suffer chronic fatigue, fibromyalgia, depression and unexplained rashes, with a potential link to breast cancer for women. This lady also had an ileostomy, as her bowel burst, and she had a stillborn child, with all the attendant trauma attached to such an incident. Unlike other contaminated blood patients, she has been denied stage 1 Skipton fund payments. Needless to say, she did not receive the Caxton payments either.

Jim Shannon (Strangford) (DUP): Between 1970 and 1991, almost 33,000 people were infected with hepatitis C; between 1978 and 1985, 1,500 haemophiliacs were infected with HIV, and some of them were co-infected with hepatitis C as well. The issue of compensation is a big one, and I congratulate the hon. Lady on bringing it forward for consideration—the number of people here in Westminster Hall today is an indication of its importance. Does she agree that, regardless of the stage of a person’s illness, compensation should be given to them?

Ms Ritchie: I thank the hon. Gentleman for his very helpful intervention. That is the case that I am trying to make—that there needs to be a full and final end to this issue, with a good story for the people affected, not only through compensation, but with proper access to the right drugs that will help them and ease their journey.

In the Commons on 25 March, the Prime Minister pledged to help “these people more” after the publication of the Penrose report, promising that “it will be done” if he was re-elected. He was re-elected, but that inquiry, which scrutinised events between 1974 and 1991, has been branded as failing to get to the truth by Professor John Cash, who is a former president of the Royal College of Physicians of London and a former director of the transfusion service.

Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP): I thank the hon. Lady for taking my intervention, and I congratulate her on securing this important debate. I am here on behalf of several of my constituents, particularly Andy Gunn, whose whole life has been blighted by this unimaginable injustice. Despite several promises that we should expect a comprehensive Government response to the report of the Penrose inquiry, we have heard nothing regarding the time scale. Does she agree that the Government must take immediate action to rectify that?

Albert Owen (in the Chair): Before the hon. Lady carries on, let me say that I understand that Members here have individual constituency cases, but this is a 30-minute debate and I want the Member who secured it to make her case as concisely as she can in the time given, and I want the Minister to have the time to respond. The hon. Lady will also have a couple of

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minutes at the end of the debate to sum up. Let us see how we go; I am sure that the Minister will be generous with her time.

Ms Ritchie: Thank you, Mr Owen, and I also thank the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) for his intervention, which captured the crux of the problem. We want a full and final settlement for these people, accompanied by drugs for them, because they have suffered immeasurable and unimaginable pain and grief.

It is interesting what Professor Cash—a former president of the Royal College of Physicians and a former director of the transfusion service—has said. He asserts that the Inquiries Act 2005, which defines the parameters of public inquiries, enabled the executives responsible to avoid giving evidence. Apparently, the Act meant that there was a whole area that he could not address, and that is an area worthy of further investigation. I hope that the Government will not fall short in relation to that.

The Haemophilia Society was also critical of the Penrose inquiry report, saying that there had been systemic failures in public health and public oversight. Furthermore, we know that Lord Prior of Brampton made a statement to the House of Lords on Friday 17 July, which was reaffirmed in the Commons on Monday 20 July, when my hon. Friend the Member for Kingston upon Hull North asked her urgent question. However, so far neither Parliament nor the wider public, including the victims, have been told when the consultation announced on 17 July will take place. The victims of contaminated blood products are still suffering while the Government continue to procrastinate on this issue.

Rebecca Pow (Taunton Deane) (Con): I just wanted to widen the debate. I have taken everything the hon. Lady has said, but I want to speak in particular for some of my constituents with contaminated blood who are supported by the Macfarlane Trust, to which I hope she might refer. My constituents are reporting that it is not working and should be dissolved, and they, too, want a final settlement so that they can live out their lives in peace. This is just one small group of people, and that the least we can do so that they can finish their lives, which were blighted unexpectedly, peacefully. I would very much like her to refer to that body.

Ms Ritchie: I thank the hon. Lady for her helpful intervention. The bottom line is that none of these trusts has provided adequate help or succour for those who have suffered immeasurably. These people need an acknowledgement of liability and a sum of money that will enable them to live independently and with dignity. Such a sum should be supplemented with ongoing payments to recompense them for years of lost income and for the physical and emotional trauma that the contraction of these viruses has caused.

Huw Irranca-Davies (Ogmore) (Lab): I support my hon. Friend and welcome this debate. Will she stress that, although we are giving voice to people in this debate, we are unable to give their names because of the continuing stigma? Those people include the “The Forgotten Few”, some of whom are constituents of mine, who are co-infected with HIV and hepatitis C. They and their families have lived for many years with not only the

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financial hardship but the stigma. In every debate on this subject I have been unable to name them, but they deserve justice as well.

Ms Ritchie: I am grateful for that helpful intervention, which characterises the real emotional trauma and pain that people who have been given contaminated blood products have had to endure for many years. The uncertainty needs to be addressed as well. The only body and the only people who can address the problems endured by those affected are the Government.

There is concern that the compensation resulting from the consultation could come directly out of Department of Health funds. Nobody who is suffering as a result of contaminated blood products wants anyone else with any other type of illness to suffer because of a lack of resources. Dedicated funding should come out of the Government’s contingency funds for people who suffer from this ailment, because these are special circumstances.

Sir Oliver Heald (North East Hertfordshire) (Con): One of the families from my constituency who are affected are present in the Public Gallery. Does the hon. Lady agree that in framing compensation it is important to look not only at the pain, suffering and misery that has already occurred, but at the future needs of those concerned?

Ms Ritchie: The hon. and learned Gentleman is absolutely right. People’s future lives have to be taken into account, and we must also think of those who will contract these viruses at a later stage. The Government must consider the planning of resources and the availability and approval of medicine.

Catherine West (Hornsey and Wood Green) (Lab): I am so pleased that my hon. Friend was able to secure this debate and congratulate her on doing so. Does she agree that the situation is intensely difficult for families, particularly because of the lack of transparency over the years?

Ms Ritchie: My hon. Friend has captured the anxiety and trauma of those affected and the need for Government compassion on this issue.

I will encapsulate the principal points. We need to know the commencement date of the consultation. It was supposed to be in autumn; we are now in autumn and we have not heard anything since the announcement on 17 July. We need the Government to detail how the £25 million will be spent and whether the various trusts will be dissolved and a lump sum made available. We need to know whether the Government will acknowledge liability and provide ongoing payments for victims and for the families who have been left with nothing following the death of a family member who contracted a virus or viruses as a result of contaminated blood products.

I say again: victims feel strongly that compensation should come not from the Department’s principal budget but from the Government’s contingency fund. Victims must have access to proper medicine, and drugs are required to be prescribed at stage 1 of the illness, before the onset of stage 2, in order to prevent liver dysfunction.

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The Minister said in a statement that the Penrose report,

“together with over 5,000 documents from the period 1970-85…have already been published by Government”,

and that the Government

“have also committed to releasing all additional documents from 1986-1995 late this summer.”

When is “late this summer”? When will the documents be released?

These people, who are suffering so terribly, require truth from the Government. My constituent went to the Royal Victoria hospital in Belfast for continual reviews and was told that he had to get another test. He said, “Why do I have to get another test? Everybody knows I was born a haemophiliac, along with my two brothers.” They said, “You have hepatitis C,” and he said, “How did that happen?” It was because of blood products that were imported from the United States. That was the first he knew of it, 20 years ago. Members can imagine the trauma he felt, and that of his wife, children and wider family. Those blood products have meant that he has to attend hospital on a weekly basis and is without a job. He cannot do what he wants to do most: care for and bring up his family.

For the sake of Brian and many, many others, I urge the Minister to ensure that an abrupt close is brought to this matter, that a date for the consultation is announced, that interim moneys are made available, that full and final compensation is made available out of the Government contingency fund, and that all these terrible injustices are rectified once and for all.

Albert Owen (in the Chair): Before the Minister responds, she has indicated that she would like to speak for about 12 minutes. She has a little more time, so I am sure she will be generous in taking interventions.

11.16 am

The Parliamentary Under-Secretary of State for Health (Jane Ellison): I will do my best, Mr Owen.

I congratulate the hon. Member for South Down (Ms Ritchie) on securing this debate; she is a consistent champion of this issue. Many other colleagues present have also done so much important work over many years on this difficult and tragic topic.

During the ’70s, ’80s and early ’90s, many individuals were sadly infected with hepatitis C, HIV, or both, from NHS-supplied blood or blood products before effective donor screening tests were introduced. To this day, many people continue to be affected by the grievous outcome of their earlier treatment, so it is right that the matter is given our attention and collaborative consideration. I know that I will not be able to satisfy all the points raised by the hon. Member for South Down, but I hope that I can at least give the House a very keen sense of how much I share the desire to move towards a better outcome and a conclusion.

Chloe Smith (Norwich North) (Con): Does my hon. Friend the Minister plan to address the subject of drugs? Can she put a rocket up the National Institute for Health and Care Excellence to get that part of the business in order?

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Jane Ellison: I do intend to touch on new treatments, because that is one aspect of the landscape in this policy area that has changed profoundly for the better in recent years. I am also always happy to follow up on any issues with colleagues.

I know how much interest there is in this issue, as demonstrated by the presence of so many Members today. Many Members have heard from constituents, as have I, of the significant and devastating impact of this tragic matter on their lives. Successive Governments of all complexions have looked at and wrestled with this difficult issue. I have spoken directly to affected individuals and families and I read many letters—every single one that is sent to me—detailing people’s concerns and frustrations with the current schemes of support and the situation in general.

I assure Members that the matter of infected blood and the reform of the payment schemes continues to be a priority for me. I meet regularly with my officials in the Department of Health, including over the summer, to maintain progress towards a better outcome. As I indicated in my statement before the recess, the Government are considering the provision of future financial assistance, and other support for those affected, within the context of the spending review and in a way that is sustainable for the future. It does need to be sustainable.

We will be consulting to help develop the shape and structure of any new scheme. Members know that, and we have said that before. I appreciate and share the frustration that we have not been able to move to publish a date. I cannot give Members a date today, but we still intend to consult as soon as possible.

Ms Ritchie: It is vital that the Minister gives us a date for the commencement of the consultation today. We are talking about a life and death issue for many, many people. I know the Minister appreciates that, but she has to understand that a date is the most compelling requirement, along with the compensation and access to drugs.

Jane Ellison: I am well aware of that fact, and I do not casually say that I cannot give a specific date today. The consultation will take place before the end of the year, as we have previously committed to. We are working on the detail of that, but I cannot give Members a specific date today. It is an absolute priority to bring it forward. The area is complex, both legally and in its proximity to the spending review, but we have made that commitment.

Chris Stephens (Glasgow South West) (SNP): Will the Minister give way?

Jane Ellison: Not if it is on the same topic. I have said what I can today, and I have also said that I will inform Members as soon as I can when we have a date for the consultation. I have done everything in my power to keep Members informed on the issue, and I will continue to do so.

Kevin Hollinrake (Thirsk and Malton) (Con): In addition to a full, fair and final resolution to the issue, the victims also need clarity on access to drugs. Will the Minister clarify why NHS England has made access to drugs more complicated than it is in Scotland, Wales and Northern Ireland with the networks of hospitals? Why is that required?

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Jane Ellison: I will come on to drugs and access to drugs, although perhaps not quite in the detail that my hon. Friend seeks. I will now make progress and not take any interventions for a while to ensure that I get to the points that Members have raised.

Suffice it to say, I was strongly aware, as I was present for most of the urgent question on 17 July, that access to treatment is uppermost in Members’ minds. Considerable time and attention is being given to the issue, and I will touch on it in my remarks. Following the consultation, we will take into account the views that we receive, and then look to work as quickly as possible to announce how the schemes will be reformed. Several thoughtful suggestions have already been made to me by MPs and patient representative groups on how we should approach the consultation. I am grateful for those suggestions, which I am considering carefully.

The Government are continuing to work with the devolved Administrations on the issue, and I hope that the hon. Member for South Down agrees that we should work as much as possible towards a four-nations approach. I suggest that, as part of that, it would be helpful if she shared her knowledge and insight with Ministers in Northern Ireland. We continue to do so at official level and we will ensure that appropriate ministerial exchanges happen.

While decisions have not yet been made on what the new scheme will look like, the House should be assured that, given the level of unhappiness with the existing schemes, we are considering root and branch changes, which I know is what campaigners are calling for. I would, however, like to be clear that while we are working to establish a full and fair resolution, liability has not been established in the majority of cases, so it would not be appropriate to talk about payments in terms of compensation, particularly on the scale that some campaigners and colleagues envisage. I know that Members are not happy with that, but I need to say that for the record. We will continue to fund ex-gratia payments, but we will look to reshape those following consultation. It is my hope that, pending decisions after the consultation, transition to a new scheme can begin from April 2016.

While many individuals may feel frustrated at the expected timescale for scheme reform, it is important that we take time to get things right, because we need suitable and lasting changes. That includes identifying all the complexities involved in making changes to a system of support such as this, and the need in due course to consider consultation responses.

As colleagues have mentioned, in March 2015, the Prime Minister announced that up to £25 million would be allocated to support transition to a reformed scheme. As previously stated, I confirm that we do not intend to use that for the administrative costs that might be associated with reform of the existing schemes. We expect to announce our plans for that money once we have a better understanding of what the wider scheme reform might comprise. If it is necessary to roll that money into the next financial year, we will do so.

The announcement by the Prime Minister on the allocation of the £25 million came on the day the Penrose inquiry final report was published. I am aware that many campaigners have written to their MPs regarding

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the Government’s response to Penrose. We have fulfilled our commitment to implement the recommendation in the Penrose report to take

“all reasonable steps to offer an HCV test to everyone…who had a blood transfusion before September 1991 and who has not been tested for HCV”

by reminding GPs, nurses and other clinical staff of the matter, along with the NHS guidance to offer a hepatitis C test to those at risk. I can give Members details if they are interested in how we have done that. Those reminders will act to ensure that awareness is significantly increased across England and will help to identify anyone who is currently unaware that they may have been infected with hepatitis C. However, the House should be reassured that look-back exercises took place in 1991 and 1995 to try to identify those individuals, so I would not expect the recent action to result in significantly increased uptake of hepatitis C testing.

Jason McCartney (Colne Valley) (Con): I refer the Minister to the report by the all-party group on haemophilia and contaminated blood, which my colleague the hon. Member for Kingston upon Hull North (Diana Johnson) chairs. It was an extremely comprehensive report. We heard from many hundreds of victims on how to reform the trusts and funds. Will the Minister make a commitment that, when she has some timeline details, she will make a ministerial statement on the Floor of the House of Commons, so that Members will be able to question her?

Jane Ellison: I have done my best to ensure that the House and individual Members are kept informed at all times. I have had a number of individual Member meetings. I will touch on this again, but I will of course look to keep the House informed on all important timelines, as we have to date. The all-party group, to whose comprehensive report my hon. Friend rightly referred, has informed our thinking, but there has never been a public consultation on any aspect of scheme reform. No Government have done that before, so this will be the first time that any formal public consultation has been undertaken.

Mark Durkan (Foyle) (SDLP): Will the Minister give way?

Jane Ellison: No. I will touch on the issue of drugs, and if there is time afterwards, I will take another intervention.

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Many Members are aware that a new generation of promising drug treatments is emerging that has the potential to offer an effective cure for many patients with hepatitis C. The National Institute for Health and Care Excellence issued guidance recommending two of the drugs earlier this year, and those are now routinely available on the NHS for eligible patients. NICE is developing guidance on three further treatments and has recently consulted on draft guidance. NHS England announced in June that it has made £190 million available this year so that patients with confirmed cirrhosis from hepatitis C can benefit from the new treatment options. In previous debates, I have offered advice to Members on how constituents who are worried that they are not getting access to those options, yet meet the clinical guidelines, can get access. In particular, it is important that patients to talk to their hepatologist.

We estimate that around 550 individuals infected with hepatitis C through historical treatment with NHS-supplied blood and blood products can now access the new treatments under the NHS’s interim commissioning policies. As the Secretary of State committed to on 25 March, the Department of Health is continuing to work to bring transparency to the matter of infected blood. The documents covering the period from 1970 to 1985 have been published in line with the Freedom of Information Act, and are available on the National Archives website. The Department is completing the transfer of the documents that we hold for 1986 to 1995 to the National Archives. Once those have been handed over, the National Archives will need to take the records on to its systems and make them available on its “Discovery” website. As to the precise date, we had hoped that it would be this summer, but for technical reasons the National Archives has indicated that it anticipates the documents being made available on its website after the January 2016 releases. I stress that that is only for technical reasons associated with the transfer of the documents.

I appreciate the House’s frustration and I am sorry that I will not be able to let the hon. Member for South Down back in to respond at the end. I understand the sense of urgency and the need for change. In hoping to reach a conclusion as soon as is practicable, I have, through the hon. Member for Kingston upon Hull North (Diana Johnson), offered parliamentarians a meeting ahead of the consultation so that I can hear their concerns and suggestions and so that they can contribute to shaping scheme reform.

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

11.30 am

Sitting suspended.

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West Midlands Police (Funding)

[Mr David Crausby in the Chair]

2.30 pm

Richard Burden (Birmingham, Northfield) (Lab): I beg to move,

That this House has considered funding for West Midlands Police.

It is a pleasure to serve under your chairmanship, Mr Crausby. I am grateful to have secured this debate.

I begin by expressing my thanks to the officers and staff of West Midlands police, who do an extraordinary job under immense pressure. As the largest force outside London, West Midlands police are the people who walk the beat and respond to some of the most diverse and challenging calls in the UK. The work and effort that they put in is especially remarkable given the funding cuts that they have already had to endure.

It is widely accepted that the Government’s approach to police funding over the past five years has seriously disadvantaged the big cities, where crime is often higher and more complex in nature. Our region has been hit harder than anywhere else. Over the past five years, disproportionate cuts have cost West Midlands police £126 million, which has led to one of the largest staff reductions in the country, in both numbers and proportion, with a 1,500 drop.

There are two big aspects of and reasons for such comparably high reductions: the region’s low council tax precept and the Government’s practice of formula damping. The council tax precept is the second lowest in the country, behind Northumbria, which means that West Midlands police is more reliant on central grant funding. A flat-rate cut in the central grant therefore has a disproportionate effect. Although central Government provide 86% of West Midlands police’s budget, for some forces the percentage can be as low as 49%.

Mr Jim Cunningham (Coventry South) (Lab): I congratulate my hon. Friend on securing this debate, which is timely, to say the least. Does he agree that, with a 23% budget cut over the past four years and something like 5.8% of the overall distribution, rather than the 6.8% that other police authorities have been getting, West Midlands police has been discriminated against?

Richard Burden: My hon. Friend is right: West Midlands police really has been hit disproportionately. For example, compare West Midlands police with Surrey police, which has seen its total income fall by 12%. As my hon. Friend said, West Midlands police has already lost 23%, despite recorded crime having risen in the west midlands and fallen in Surrey. The cap on council tax rises, along with the huge costs associated with a referendum to go above that cap, leaves West Midlands police with no ability to mitigate cuts to the central Government grant in the same way that other forces sometimes can.

Mr Andrew Mitchell (Sutton Coldfield) (Con): I congratulate the hon. Gentleman on securing this debate. It is an important issue that he is right to raise. I want to make two points. First, West Midlands police deserves to be congratulated on the 17% reduction in crime that I understand it has achieved. Secondly, will the hon.

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Gentleman say a little more about the extraordinary position in which we find ourselves, whereby the amount of the subvention from central Government is far higher than for any other force, apart from Northumberland, and the precept is very much lower? Most of our fellow citizens in similar cities—if one can say there are similar cities to Birmingham—are paying much more. That is an established fact, but it would be very helpful if the hon. Gentleman could discuss the options for remedying that.

Richard Burden: The right hon. Gentleman is quite right—that is what I touched on earlier. The fact that we start with a lower council tax base means that we are more reliant on the central Government grant, so it is much harder to mitigate or to compensate for the effect of flat-rate cuts. I will come to crime levels, particularly the levels for different kinds of crimes, in a minute.

Mr John Spellar (Warley) (Lab): The issue is not only the level of income, but the huge additional burdens. For example, after the Metropolitan police, West Midlands police bears far and away the biggest share of the successful campaign against terrorism.

Richard Burden: My right hon. Friend is quite right about that. I will mention some of the specific demands on West Midlands police in a little while, but he is absolutely right to draw attention to counter-terrorism work.

In addition to the issue of council tax, the west midlands is also hit doubly hard by how formula damping works. In brutal terms, such damping prevents the region from receiving the funding allocation that the national formula says we need. This year, West Midlands police will receive £43 million less than the Government’s own formula says is required.

Steve McCabe (Birmingham, Selly Oak) (Lab): As my hon. Friend says, under the existing system we are being robbed of £43 million that we should receive. In the past, the Minister has recognised that that is wrong. The Minister will not want to comment too much on his future plans today because of the ongoing consultation, but does my hon. Friend agree that at the very least we need an assurance that we will not lose, as has been speculated, a further £20 million under the plans that the Minister is going to put into action?

Richard Burden: My hon. Friend is right on both points. First, the impact of formula damping is a problem. Everyone seems to recognise that, but then nothing is done about it, so I hope that the Minister will reassure us on that. Secondly—I hope that the Minister will say something about this as well—the current consultation is also important, because some of the scenarios could hit the west midlands very hard indeed. I will say something about that in a little while. Suffice it to say that, if the funding was increased by just £10 million to compensate for the formula damping problem, that would still leave West Midlands police hit three times as hard as any other force, but we could recruit 450 additional police officers. Instead, £43 million is given to other forces. I understand the problems when formulae change and the effects have to be smoothed, but the reality is that other forces will get more funding than the Government’s formula says they need and West Midlands police will get less.

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At this point, I want to note that in the individual force assessments for handling austerity, Her Majesty’s inspectorate of constabulary rated West Midlands police as outstanding. Credit for that is due first, and most importantly, to the officers and staff of West Midlands police. It is also important to mention the contributions of the late Bob Jones, the former police and crime commissioner, and David Jamieson, the current PCC, as well as that of Chief Constable Chris Sims, who will soon be retiring—we should thank him for his work during his time in the west midlands.

It is important that policy makers listen to people such as those I have just mentioned, because they are not crying wolf; they are raising legitimate concerns about the sustainability of the police service in the west midlands. Were the existing formula regime to continue, the force would expect to lose a further £100 million over the coming years. That would mean that a further 2,500 officers, police community support officers and staff would be set to go. At the end of the decade, West Midlands police would be expected to be smaller than when it was established back in 1974. In a moment, I will give more detail about the demands facing the force, which were mentioned by my right hon. Friend the Member for Warley (Mr Spellar), but for now I will simply say that crime is often more complex and sophisticated now than it was in the ’70s. Will the Minister tell us what the Government are doing to ensure that West Midlands police gets a fair deal to halt the huge drop in officer numbers that it is facing?

Given the categorical unfairness of the existing regime, I think that many colleagues present, from both the Government and the Opposition, were encouraged when the Government finally announced a review of the current formula. That should have been good news. The problem is that the Home Office has refused to publish any detailed exemplifications or impact assessments using its proposed models. We are already seeing the Government’s attempt to have an open discussion, which they say they wanted, starting to unravel. How can anybody offer an informed judgment to the consultation without the full information? As was reported in The Guardian at the weekend, even attempts to get figures via a freedom of information request have been rejected.

Thanks to the revelations published by the same newspaper, forces may still have time to review the implications of the new formula just before the consultation closes next Wednesday. Early analysis of the modelling suggests that there are several serious concerns about the Home Office’s approach that are likely to disadvantage our region even more. Based on modelling of the new funding formula by the Police and Crime Commissioners Treasurers’ Society, West Midlands police could lose more than 25% of its current funding. That is on top of the existing 40% cut, to which my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) alluded. Before the end of the decade, that could leave the force with a budget smaller than the fixed costs for the officers it already has.

Mr Mitchell: The hon. Gentleman is being most generous in giving way and is making an important speech. May I press him further about the budget and funding? Does he believe that the precept should rise or

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does he think that the Government should continue to give more of a subvention because we are providing a smaller precept locally? It is important to address that point, so that we have it clear and in the open.

Richard Burden: I will say two things in response to the right hon. Gentleman. First, tackling the question of the precept and the relative level of the council tax base is a long-term issue. It raises fundamental questions about how much it is legitimate to raise locally, as opposed to being dependent on central Government grants, when funding local government and other local services. That brings with it issues of how to compensate for particular levels of deprivation and so on, but he is right that it is a vital discussion, which goes beyond police funding.

In relation to this debate, however, we are where we are. We have a lower council tax base and are disproportionately dependent on central Government grants. Unless central Government formulae recognise that and respond to it, we will not be able to move forward.

Steve McCabe: I am grateful to my hon. Friend for giving way again. It does not really matter whether someone thinks that the precept should rise or not; the reality is that the Government have locked in a system that requires a referendum before it can rise, which is part of their intention to limit the rise. This is surely a spurious argument.

Richard Burden: That is saying perhaps a little more bluntly what I meant when I said that we are where we are. The Government must listen to the implications of their own policies.

My hon. Friend mentioned referendums. Let us say that we in the west midlands decided that, as the Government will not change their mind, despite our low council tax precept and so on, we should have a referendum. Where would that funding come from? It would come from the police budget, and we would lose even more as a consequence.

Mr Mitchell: I am stunned at the suggestion that I might have made a spurious point. It would be perfectly fair for the Minister, in seeking to confront the funding difficulties that we all agree exist, to ask whether senior politicians in Birmingham, such as the hon. Gentleman, believe that the Government should continue to give far more as a proportion because the precept in Birmingham is so low or whether senior local politicians believe that that needs to change and that the Government should not immediately assume that the wider taxpayer will provide an extra amount because the precept is so low. I am only trying to ensure that the hon. Gentleman is making a point of principle and is not simply asking the Minister for more money without expressing a view.

Richard Burden: I hope that it was clear from what I said at the outset that if a region has higher needs and a lower capacity to meet those needs locally, an important part of which is the level of the council tax precept, the Government should not ignore that problem. The formula should take account of that kind of thing, and the support should reflect the region’s needs and its lower capacity to raise money, which is partly a result of

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deprivation and the historical level of the council tax precept. As I said, if we decided to try to go for a higher council tax precept, the police force would have to pay for the referendum, which is patently unfair.

Mr David Winnick (Walsall North) (Lab): Bedfordshire decided to hold such a referendum in order to increase the council tax. That vote was lost and it cost Bedfordshire police some £600,000. It would be madness for the West Midlands police to try that even if it was desirable.

Richard Burden: My hon. Friend makes a good point about the costs of referendums.

I am concerned that the Government’s proposals fail to take into account the multiple and complex demands on policing in the UK’s second largest city and the wider west midlands region. My constituency of Birmingham, Northfield, part of the Birmingham south local police unit, has recently seen a wave of high-profile incidents that have raised safety concerns among local residents. The reality is that those incidents are unrelated and exceptional—it is not a high-crime area—but the fact that they are taking place underlines the cross-cutting demands and sporadic pattern of many of the crimes with which large urban areas must contend. As a result, the question of police providing essential community reassurance is as important as crime detection and crime prevention.

Police community support officers are familiar faces of reassurance in many of our communities, mine being no exception. They play a vital role in deterring crime and building confidence among local people. Yet, despite their prominence and value on our streets, we look set to lose huge numbers of PCSOs. What is the Minister’s assessment of his Government’s pledge not to undermine front-line policing services such as PCSOs? Traffic police are another key, often overlooked front-line service. Specifically trained traffic officers are vital in deterring dangerous driving. Yet as their numbers have fallen in the past five years, casualties have risen dramatically nationally. What is the Minister doing to ensure that the Central Motorway Policing Group, for example, will maintain adequate staffing? Indeed, when considering job cuts to police officers, traffic officers and PCSOs, what assessment has he made of the required policing capability and capacity of each force area?

Across the west midlands—this goes back to the point of the right hon. Member for Sutton Coldfield (Mr Mitchell) about crime levels—recorded incidents of violence against the person have increased by 10%, sexual offences by 18% and public order offences by 13% in the last year alone. West Midlands police is facing increasingly important challenges, such as radicalisation, child sexual exploitation and female genital mutilation. Safeguarding the most vulnerable in society and investigating and bringing perpetrators to justice are time and resource-intensive processes. When we consider the increases in many types of recorded crime, many of us will be aware that the real figure is probably much higher.

Critics of official crime statistics are well aware that many crimes, such as rape and sexual assault, regrettably go unreported. Others such as cybercrime and credit card fraud are simply not recorded properly. Crime is changing—not falling—and the Government must recognise that fair and proportionate funding for police forces is important.

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In closing, I have two specific questions for the Minister. First, will he publish in full the data that his Department has used to develop the consultation proposals and will he then consider extending the consultation deadline to allow all respondents more time to review that information? Secondly, in the light of the disproportionate cuts in funding for West Midlands police, as found in the recent National Audit Office report, and given the growing local and national security demands in our region, will the Minister commit today to those things being taken into account in the new formula?

On Tuesday, the Select Committee on Home Affairs will take evidence about such matters, not only from the West Midlands police, but from other forces as well. For the Committee’s discussions and debates on Tuesday to be as informed as possible, I hope that the Minister will give at least some of that information today. He should be able to answer today the questions about the nature of the consultation, the basis for the figures arrived at and the work of the National Audit Office, without in any way jeopardising the consultation.

Several hon. Members rose—

Mr David Crausby (in the Chair): Order. There is no set time limit, but I intend to call the first of the two Front Benchers at 15.40, which gives us almost 50 minutes. Five people are standing, although I am sure that other people might change their mind later on, so if Members will keep their contributions to less than 10 minutes, including interventions, we will get everyone in.