Margot James (Stourbridge) (Con): It is a pleasure to serve under you this morning, Mr Chairman. I first wish to thank all Members who have given up their time this morning to debate the very important matter of sheltered housing.
According to the most recent English housing survey, 610,000 mainly older people live in sheltered accommodation. As a sector, sheltered housing has something of a mixed reputation. Some sheltered housing is old and provides bedsit accommodation, which is increasingly hard to let. At its worst, it has provided councils with an opportunity to house hard-to-place tenants-for example, people with drug and alcohol problems-and unsurprisingly that is upsetting for the conventional older tenants for whom the schemes were originally intended. At the other end of the sheltered market there are high-quality flats available for lease purchase and renting. What all those options have in common, however, is the availability of services that are promised as part of the housing entitlement.
I digress for just a minute to remind Members of the next big thing in older people's accommodation: extra-care homes. Some Members might already have such establishments in their constituencies. My own borough of Dudley is opening several extra-care homes next year. These establishments promise services that tenants and owner-occupiers can avail themselves of on a flexible basis, according to their age, mobility and mental state. The important thing is that the services are available; that is what people will buy into. Although they might not, at first, need a carer to visit them regularly or to have mobility aids in their flat, as they age and their needs change they will be able to access that additional support as part of the package. Does that sound familiar? Although the services offered in extra-care homes are more diverse and far-ranging than those provided by most sheltered housing schemes, the principle is the same. Someone pays the money, and as their needs increase they are guaranteed access to greater support.
On the basis of trends in the sheltered market in recent years, I would say, "Buyer beware." In sheltered housing, those essential services are being eroded over time. The tenant or leaseholder-this happens in both the private and the social sector-moves into their accommodation on one basis, thinking they will be secure in their old age, only to find that as time goes by the management organisation starts to whittle away the services on which they depend. The distress caused to older tenants and leaseholders by the various changes, in some cases forced upon them by their housing provider, is as great as it is unjust. Several types of service are affected, but the most controversial is warden support.
Research by the Sheltered Housing UK Association found that 97% of residents surveyed said that their decision to move into sheltered housing had been influenced most of all by the presence of a live-in warden. A Help the Aged report, entitled "Nobody's Listening", found that 67% of Supporting People administering authorities felt that warden services were the most important aspect of sheltered housing for older residents.
"sheltered housing can be provided through a range of models"
"not just through schemes with resident wardens."
"Many people neither want nor value 24-hour on-site management services".
Jo Swinson (East Dunbartonshire) (LD): I congratulate the hon. Lady on securing the debate on this very important issue. Residents in my constituency are equally concerned about losing warden services, but the problem is twofold. The full service is being taken away, leaving only a nine-to-five service, and people are being asked to pay an additional charge when the service was part of the overall package they had when they moved in. They are losing on both counts.
Margot James: I very much agree with the hon. Lady. It is true that elderly people buy into these schemes and originally have an on-site warden service. As she says, not only is that taken away, made off-site and shared by various other housing organisations, but it used to be free and is now chargeable. So, the service is getting worse and the fees are increasing in many cases.
Penny Mordaunt (Portsmouth North) (Con): In Portsmouth, we have an additional problem to the wardens-whom the court case was about-in that bathing and other services are being charged for. This is all happening at once, and many elderly men and women are extremely frightened at the prospect of their bills going up by £20 a week or more.
Margot James: My hon. Friend makes a very good point. We must not forget that most of these residents and tenants are on fixed incomes. They have bought into the schemes on one basis, and a promise has been broken. I shall come on a little later to some of the options available to people in that position. Judicial reviews of decisions by housing providers have also been sought by tenants in no fewer than 50 housing schemes in 20 authorities. That gives the lie to the assertion by the housing providers that their residents "neither want nor value" on-site management services.
We are talking about a vulnerable group of people, many of whom are on fixed incomes. Many people in that situation are increasingly frail and are no match for large housing organisations and their teams of lawyers,
which is presumably why some companies-charities even, which I find very surprising-have attempted to impose the sort of changes we have heard about this morning on leases and tenancy agreements, without consultation. Although the change that has caused the most distress is the replacement of a live-in warden service with an off-site visiting manager-with whom it is necessary to make an appointment, which is often charged for, even though it was free according to the terms of the original agreement-other changes such as the national procurement of local services and escalating management charges with no associated improvement in the service offered are also a big problem for owner-occupiers in the leasehold sector.
I was first alerted to this problem by two constituents of mine in Stourbridge, who do not wish to be named. They had bought into sheltered accommodation on a leasehold basis. A charity ran the establishment, along with several hundred other establishments nationwide. The charity has substituted the live-in warden service that was free at the point of use with a visiting service shared with other organisations, with which they have to make an appointment and for which they are charged. They have also suffered escalating management charges, and a housing provider that decided to procure nationally every single service. Such a system takes away any local connection and removes the resident's empowerment and ability to effect improvements by making a phone call or spotting the window cleaner and having a word. Even window cleaning, garden maintenance and lift maintenance are nationally procured, and the excuse given to the residents is that that is under EU law. We have investigated and that is not the case. There is a way round the problem, and EU law does not force national procurement on organisations of that size. Nevertheless, that is what residents are being told.
After I raised the issue during Prime Minister's questions in July, a family from Folkestone approached me. Their elderly mother was a tenant in an establishment managed by Peverel, which manages a large number of housing organisations country-wide. Again, the issue was the substitution of the live-in warden system. None of the residents wanted that, but Peverel said, "We're going to sell the flat where the warden lives because we can't find anyone to do the work. We will donate £10,000 from the proceeds of the sale into your management fund." That is absolutely derisory, but when the residents challenged it, Peverel turned around and said, "We are under no obligation to do this-take it or leave it."
Endless complaints appear in the press about Peverel. One of its tactics is to use myriad service organisations of its own, including insurance companies. It then foists the delivery of services by those companies on the residents in its apartments at a charge that is higher than the market rate. That creates a conflict of interest unless there are clear rules of transparency, so that residents can get competitive tenders and ensure that they are not being overcharged for their services.
One gentleman, Neil Healey, managed to take a subsidiary company of Peverel to court over such issues, and he won a case against Solitaire Property Management. Peverel does not exclusively provide sheltered accommodation, and the picture in the paper of Mr Healey shows he is a young man-32 years old. A man of that
age is perhaps better equipped to take large housing organisations to court than many of the frail older tenants who are my concern this morning.
A survey by the Bristol older people's forum showed that more than two thirds of elderly people who live in the Bristol sheltered accommodation sector state that their quality of life is now worse than it was when there was a resident warden. Furthermore, 83% of pensioners in sheltered housing say that the services provided by their council are now worse, and 68% say their quality of life has suffered.
I am pleased to note that the Deputy Prime Minister spoke in support of this cause. Sheltered Housing UK wrote to him a month ago, putting pressure on the Government to introduce rules to ensure that residents and tenants have a right to be consulted when changes to the terms of their leasehold and tenancy agreements are proposed. In response, the Deputy Prime Minister wrote that
"lots of people who move into sheltered housing do expect a 24-hour warden...I rather like the idea Help the Aged has come up with about putting changes to warden services to a vote of affected residents...That's the kind of good practice I hope more housing associations and councils will use."
Penny Mordaunt: Certainly in Portsmouth, and I am sure elsewhere, I am concerned that a tactic is being adopted whereby companies that have been taken to court for not consulting people now consult local residents, but still leave them with the bill. In that way they dodge the political bullet for effectively withdrawing the service. I pay tribute to my constituent, Ingrid Savir, who is older than 32 but has been extremely dynamic and has spearheaded the campaign that sued Portsmouth city council.
Margot James: I thank my hon. Friend for her intervention, and I am most heartened by her example. I stress that many older people are aware of their rights and are determined to push them through. I am delighted to hear about such cases. The problem is that when consultation requires a majority vote-as it should do-a lot of the frailer, more elderly people in the accommodation in question can be leaned on or bullied by the housing association. That is my point.
Let me turn my attention to what can be done about that state of affairs. In the private sector, many tenants have a legally binding service contract. Most sheltered housing providers subscribe to the code of practice for the provision of retirement housing that was established by the Association of Retirement Housing Managers-ARHM. That code makes it incumbent on providers to consult leaseholders about any changes to the terms of the lease. Some charities and housing associations find ways round that code of practice, foisting service charges on to leaseholders without proper consultation, as we have heard this morning.
Leaseholders should be made explicitly aware of their right to consultation under the code of practice, and their recourse to leasehold valuation tribunals should the code be breached. The statutory elements of leaseholders' rights-such as the right to enfranchise a lease or, as a leaseholder group, to take over the management of services, away from the housing provider-should be extended to charitable organisations and housing trusts.
In my view, such rights should also be extended to the social housing sector. Age UK argues that tenants should be given proper information about the core services offered in their housing scheme, and the terms of reference for any future changes in those services, before they move in to the retirement housing of their choice.
Tenants in sheltered housing provided by local authorities should have a statutory right to be consulted on and challenge local authority decisions that reduce or significantly vary the provision of warden support and other services. Any changes to support services should be voted on by residents, who should have a say in the most appropriate system of alternative support when changes are proposed.
I am grateful for the expertise provided by Age UK and Sheltered Housing UK. Furthermore, my local authority of Dudley-under the recent rating system, it achieved a four-star rating for all its housing services-has proved an excellent support in my constituency for leaseholders in the private sector. I would like to thank Ron Sims and Theresa Kelly for their help with some of the proposals that I put forward this morning.
I look forward to learning more about this issue from the experiences of other hon. Members present for the debate, and I hope that some of the ideas proposed will merit due consideration by the Government.
Laura Sandys (South Thanet) (Con): It is good to serve under your chairmanship, Mr Davies, and I would like to thank my hon. Friend the Member for Stourbridge (Margot James). The minute that I saw this debate listed in the Order Paper, I felt that I had to participate. For many years, my hon. Friend the Member for North Thanet (Mr Gale) and I have been running a local campaign. We have formed a group called the Thanet eight. It is eight buildings with over 1,500 residents who live in flats that are owned by one company, and were originally managed by the same company-Peverel.
Those residents are by definition not young, and their objective in buying their properties was to have safe, secure and affordable homes, possibly for the rest of their lives. The reality has been different with increased charges; expensive and sometimes unnecessary renovations; a lack of consultation of residents; the attempt to block the creation of active residents associations; a reduction in services, particularly house manager support; and disproportionate penalties if a property is sold or rented.
Age UK has recently raised this matter and completed a very comprehensive report highlighting four key issues that my local residents certainly experience: unfair transfer fees when a property is sold or rented; escalating service charges, compounded by a lack of transparency about what people are paying for; very expensive rents for house manager flats-mentioned by my hon. Friend the Member for Stourbridge-which do not reflect the market value at all; and the use of companies that are owned by the management companies to undertake work or provide services on behalf of residents.
In particular, I should like the Minister and the Government to examine what I call the vertical integration model. These businesses are being run by subsidiary companies where the group company owns the majority of the companies that provide services to these residential
blocks. That throws up very interesting and questionable issues. I hope that those companies' ownership of that vertically integrated supply chain causes concern to the Office of Fair Trading. The method by which they operate the vertically integrated business model is certainly of concern to consumer groups and, as I said, has been the subject of an Age UK report.
In my experience, the freeholders and management companies, which are all owned by the same holding company, own lift maintenance companies, buildings insurance firms-mentioned by my hon. Friend-building and maintenance operators, window cleaners and internal communications fitters. That might on the surface suggest that such a company knows its business well and understands all the different aspects of running sheltered accommodation, but is that really the case or is the vertical business model precluding competition, reducing choice for residents and creating incentives for the management company to propose and sometimes impose renovations, refurbishments or additional services that residents have not requested and do not desire?
Penny Mordaunt: It is not just the Office of Fair Trading that needs to be concerned. If a lift is not fixed or the night warden is not there, that will lead to potentially massive bills for the public purse. I am thinking of more hospital admissions, more people falling over and so on.
Laura Sandys: I very much welcome that intervention; I totally agree with my hon. Friend. We need to consider the holistic cost-the overall cost-of how in the future we will look after people who are getting older. Many years ago I wrote a paper called "How we keep the new old young". That will be a big challenge for us. I am referring to how we keep people mobile and independent and ensure that they have the resources to be independent for as long as possible.
I now want to talk about the emotional impact and the worries and concerns of my local residents in Thanet, who have put their life savings into these small flats and do not have other resources. There is an emotional and physical impact from their concern about what will drop through their letterbox next week from the management company telling them that they owe another £1,500. That creates more health problems and anxiety and deters older people from making the independent choice and going for what is, on paper, excellent sheltered accommodation and a structure that gives them security for the future.
Jim Shannon (Strangford) (DUP): I appreciate the opportunity to comment on this matter. The coalition Government are considering the removal of the mobility part of disability living allowance for people in homes. Does the hon. Lady not agree that the removal of such an award puts a financial pressure on people in homes as well? The pressure is not just physical, but financial. Being members of a caring society, as I am sure we all are, does she not agree with me that that would be a backward step?
I am talking about sheltered accommodation, not residential care, but I understand that the issue is the component of DLA that relates to mobility. Local authorities do provide those services
and need to provide them to ensure greater mobility and as much independent living as possible within a care home. We need to consider carefully how we maintain independence, mobility and active life for as long as possible. I have in my constituency one of the highest percentages of people over 60 in the country. They feel that they can and should participate actively in life, but sometimes and particularly when predatory management companies are involved, they and certainly their resources are put under strain. I thank the hon. Gentleman for his intervention.
I shall give an example of what has happened in my area. Initially, for some of my local buildings, expensive refurbishment projects would be commissioned by the managing agents with the justification of needing to keep the buildings in good condition and ensuring that the residents' investment was being built on. With no comparative quotes having been produced, those refurbishment projects went ahead, incurring significant additional service charges for the residents. Yes, that was their choice, but it was on the recommendation of someone they trusted-the management agent.
As time has gone on, my local residents have stopped trusting their management agents. They have started to see a pattern as they start to question refurbishment. Now, the management companies are looking to undertake works priced just below the threshold at which they must consult the residents. Over a two-year period, a series of quite similar projects have been priced just below that threshold, so the firms can procure from their own companies at high cost and without consultation of residents. Those costs, which are passed on to residents, total thousands of pounds. The residents are elderly and often on low incomes and have no recourse.
Buildings insurance is also an interesting area. The majority of the buildings in my area that are under management with Peverel have been reinsured in the last four years-not exactly a time when property prices have been rocketing. Those properties have been revalued with increases of between 40 and 60% in the last four years. The insurance company is owned by the holding company of the management company. The premiums have been passed on to the residents. Equivalent quotes obtained by my local residents have brought down the value of the properties in the current market. Some of my residents question whether the building's value has gone up to support those companies in their market valuation and the presentation of their assets to borrow further money to buy more residential homes.
The vertical integration of these companies, the lack in many instances of competitive tendering and the cumulative cost of small refurbishments that are just under the threshold for consultation make for a very insecure and uncertain future for many residents and must be addressed. Many people from these blocks have taken up the opportunities afforded to them under the Commonhold and Leasehold Reform Act 2002, but have the management companies made it easy for the blocks to self-manage? In fact, they have stood in the way of the setting up of residents groups and contested the right to manage, citing numerous barriers. My residents have ended up in tribunals and having to employ experts and lawyers. The law is there to liberate those residents,
not to wrap them up in red tape or to place on them the expense of lawyers. All those things have been put in the way to thwart their right to self-manage.
I support my hon. Friend the Member for Stourbridge in the key points that she has put to the Government. I urge the Government to review the regulations on private retirement sector housing and to ensure that the code of conduct is properly enforced. Residents in my constituency should have access to recourse and to the rights enshrined by law. They need the future security that they and their families so deserve.
Jesse Norman (Hereford and South Herefordshire) (Con): I congratulate my hon. Friend the Member for Stourbridge (Margot James) on securing this debate on an important national topic. It is important not merely because of the low level of building in this country, but because there is a serious issue about whether residents in sheltered accommodation are being cared for properly. The cases that have been described in this debate illustrate that issue.
The problem is perhaps not as acute in Herefordshire as in some other parts of the country, but it is serious and growing. We have a large elderly population that is increasing as a share of the population, and it includes an increasing number of frail people. Most of those in sheltered accommodation are cared for by Herefordshire Housing, which, after a difficult period a few years ago, has made great progress under its new leadership and reconstituted board. But all too often, sheltered accommodation is used for families who do not require it and to accommodate people with mental illness, who would be better accommodated in specialist dwellings designed for their needs.
The removal of the warden service from sheltered accommodation is a serious local issue, on which I have campaigned for three years. I associate myself with the comments of my hon. Friends on that issue. The warden service is vital, not only for its early-warning service, but for the human touch that it provides for those in sheltered accommodation. There has been more than one case in which a resident has been discovered several days after they have passed away because of the lack of a regular on-site warden.
When the housing stock was transferred from the council to Herefordshire Housing, residents were given strong assurances that their rights, and specifically the warden service, would be protected. There is a general duty of care, under which the warden service is provided. Residents were therefore appalled to discover a couple of years ago that the warden service was being removed.
A very good local campaigning group was set up, called the sheltered housing tenants umbrella group. With my assistance, several members of SHTUG took Herefordshire Housing to court over the removal of the warden service. In particular, I mention Shirley Baldwin, who ran SHTUG at the time, Lil Jones and Nancy Evans, in whose name the group received legal aid to pursue the case. I am sorry to tell hon. Members that the case failed because of a technicality. A statute of limitations, which was very short at some six months, had elapsed and they had neglected to register their concern, in part because they were notified in a modest, non-public way. They had not realised that they had
only six months to register their concern, and it was some time before the impact of the withdrawal of the service became clear. Although the lawsuit reached the stage of taking the advice of a silk in London, it did not go through. I am sorry to report that, because those people deserve a better deal than they are getting.
What can be done? Hon. Members have made many good suggestions in this debate and I associate myself with those. I wish to emphasise three aspects. First, there should be more vigorous enforcement of tenants' rights by statutory agencies. Tenants should not be notified in a letter that arrives among a lot of other correspondence that such rights are being ended without proper negotiation and consultation. Such rights should not be ended in any case because of the commitments that were made at the time of the stock transfer. Tenants deserve better than to have to obtain legal aid, which does not even exist in Herefordshire for such cases. The nearest place from which legal aid can be obtained, and where I found it, is Birmingham.
Secondly, there should be proper treatment of those with mental illness. I have residents who are being driven mad by the difficult behaviour of people who require proper treatment and care. Such people should not be left in sheltered accommodation, but they are because of the general crisis in housing.
Jim Shannon: Last week, my right hon. Friend the Member for Belfast North (Mr Dodds) introduced the First Reading of a Bill to protect elderly people and those in care, and to ensure that their rights are preserved. Like the hon. Gentleman, I represent an area with a large proportion of people who are coming up to retirement age-I am probably heading that way myself. Will he look at that Bill, which would go a long way towards providing the protection that he speaks about for the vulnerable people who need it?
My final point is that sheltered housing should be an integral part of a wider attempt to get more housing built in this country. In the past decade, there has been an enormous amount of talk about housing targets, and yet there has been the lowest rate of new housing creation in living memory. The large and increasing number of people who require sheltered accommodation are the losers in that much wider national problem.
The House owes a debt to the hon. Member for Stourbridge (Margot James) for raising a series of important issues with her characteristic sincerity and commitment. She is right that we have a sacred duty to look after the most vulnerable, and in particular those who built Britain, ensuring that they have security and dignity in retirement. No party has a monopoly on wisdom and all Governments, including the previous Government, have to reflect on the consequences of their actions. I will pose a number of questions that I hope the Minister will answer, because the issues that have been raised in this debate are of immense importance.
Everyone here takes seriously the importance of housing and support for elderly and vulnerable people, whether they live in their own home, with their family, or in supported housing, such as sheltered or extra-care schemes. The hon. Lady was right to underline the scale of supported housing in our country. The survey of English housing in 2008 showed that 7% of the retired population lives in sheltered or extra-care housing, with more than 610,000 living in sheltered accommodation. At its best, sheltered accommodation provides a sense of community, companionship and security.
I know that the debate is about more than just wardens, but I will focus for a moment on wardens. I know from my experience in my constituency that the elderly and the vulnerable speak warmly of their wardens. Wardens provide much needed support and they help with tasks, big and small, as well providing invaluable advice and support. Wardens often go that extra mile beyond the call of duty. They organise trips, activities, bingo, singing-I have even been asked to sing in one old people's home, but I am no Pavarotti. Wardens organise supper nights, and provide a listening ear to their residents who are experiencing ill health or other troubles and need a friend in difficult times.
I have seen some remarkable examples of the good and, I have to say, a very bad example of the bad. Remarkable examples of the good, on the one hand, include Waterford Court, where I was but two weeks ago, celebrating its 10th anniversary. It is full of old soldiers and their wives and husbands, still young at heart. They very much regard themselves as the "wellderly"-the hon. Member for South Thanet (Laura Sandys) was right about that-and are looking forward to years of life ahead in what is an excellent community. Also, New Oscott Village is a shining beacon of what care for elderly people should look like.
On the other hand, bad examples include the one mentioned by the hon. Member for Hereford and South Herefordshire (Jesse Norman). In my constituency, one old people's home in Kingstanding moved from on-site wardens, present seven days a week, 24 hours a day, to floating wardens and a call centre. One woman told me, in great distress, of her experience. She had had a mastectomy and at 3 o'clock in the morning on a Saturday night, her wounds burst open. She tried desperately to get help from the call centre, but was told to ring 999. She said, "But I'm soaked with blood from my breasts to my knees." She could not make any sense of what was happening at the other end of the line and, ultimately, had to call her son, who lived three miles away, to come and get her, at 3 o'clock in the morning, to take her to hospital. Although we celebrate the examples of the outstanding in all constituencies in Britain, what the debate has highlighted is that other examples, to be frank, shame our country.
Among the developments under our own Government was an unhelpful trend in relation to wardens. I will discuss that in a moment, but first let us look at the policy framework, because it is important to where we go from here. In February 2008 the Government published "Lifetime Homes, Lifetime Neighbourhoods: A National Strategy for Housing in an Ageing Society", which set out how sheltered housing is often a positive choice for older people who want to remain independent but who
value that little bit of support and shelter, as well as the sense of security and community brought by sheltered housing. The paper said:
"extra care and care homes at their best can be vibrant community hubs, tackling exclusion and promoting active ageing, even if the accommodation itself is dated."
It also said-the hon. Member for Stourbridge was absolutely right-that consultation and needs assessment are critical both to the effective management of sheltered accommodation and to reflect the wishes of service users. That was emphasised in 2007, in the Supporting People strategy paper, "Independence and Opportunity". Central to that paper was the importance of keeping service users, in turn, at the heart of delivering housing support.
A report by Help the Aged, "Nobody's Listening", makes it clear that changes in support services for sheltered housing and the replacement of resident wardens by alternative service models are not new phenomena-such changes have been taking place for two decades. An independent study commissioned by the Department last year pointed to various reasons why that was the case. It found, on the one hand, that there was less demand for sheltered housing, as people tended to move into sheltered housing later in life, and, on the other hand, that a significant number of sheltered housing residents said that they did not require support services because they were defined as the active elderly. As a result, some administering authorities commissioned flexible mobile support for sheltered housing tenants, based on assessment of support needs. They extended the notion of mobile support. There were strengths in that approach, because it offered support for people in all types of tenure, but, clearly, there were weaknesses as well, because some commissioning authorities, under my party's Government, clearly got it wrong and went too far in changing the provision of wardens in sheltered accommodation.
I will touch briefly on consultation, which has been powerfully raised, including by the hon. Member for Portsmouth North (Penny Mordaunt), who has direct personal experience. Consultation is a vital part of any service. My experience is that, if an organisation consults properly with service users, often changes that may not be threatening are seen to be precisely that-not threatening, contentious or frightening. Consultation before changes are made is, therefore, essential. Unfortunately, too many examples of a failure to consult have been evidenced in the debate today, including successful challenges in Portsmouth and Barnet, where there was a lack of consultation, ranging from a failure to take into account the terms of leasehold arrangements to a failure to act in accordance with disability discrimination legislation.
Having acknowledged the trend under the Labour Government whereby some commissioning authorities, for all that their motives were noble, went too far, I shall now look at where we go from here. The debate must take place against the background, inevitably, of resource constraint. As I will say in conclusion, however, what the hon. Member for Stourbridge has done is to put this vital issue at centre stage in the decisions that get made in the next stages by the Government and the commissioning authorities at the sharp end.
The context in which the debate is taking place is that councils will see a 7.1% cut each year for the next four years. Supporting People funding will be cut by 11.5%, to £6 billion. Yes, it is true that an additional £2 billion of funding has been promised to social care by 2014-15, £1 billion of which will come from the NHS, but, set against that, the sheer scale of the cuts that will be made in the field of social care is immense.
We can look at examples of what is already happening in the here and now. Somerset has approved a £3 million cut in its Supporting People programme from April 2011, representing an 18% reduction on its £16.5 million budget allocation for 2010-11. Big cuts have already been made in Isle of Wight; and Cornwall is due to make a decision on, I believe, 30 November on a proposed 40% cut over three years in its overall Supporting People spending. Reports suggest that elsewhere in the country active consideration is being given to major cuts of that kind: Bournemouth, Swindon, North Somerset, Brighton and Hove, and Surrey are all considering proposed reductions of between 20% and 40%. Against that background, and in the spirit of the debate today-so nobly led by the hon. Member for Stourbridge-I would like to put a number of questions to the Minister.
My first question is about preventive support. The evidence is absolutely clear that preventive support-warden services, in particular-leads to better outcomes for service users and their families, as well as to savings in health and social services budgets. If low-level preventive funding, such as Supporting People moneys, is lost, combined with the end of ring-fencing, that is likely to cost the Government and local authorities more.
My second question relates to the redirection of funding. The Supporting People programme funds housing support services for about 1 million people, but as a result of the dramatic consequences of the reductions in expenditure that are being imposed on them, some local authorities are using it to help fund statutory social care. Does the Minister share my concern that that is likely to accelerate significantly the withdrawal of on-site warden arrangements, in favour of what is all too often an unsatisfactory roaming warden service?
My third question is about social care cuts. The initial relief at the provision of an additional £2 billion for social care by 2014-15 has evaporated in the wider context of the 26% cuts in local government revenue spending. As a result of those swingeing cuts to local government, the extra money promised will do nothing to make up for cuts to social care services. Last year, the Minister of State, Department for Education, the hon. Member for Brent Central (Sarah Teather), who at the time was shadowing the Department for Communities and Local Government, said:
"it is important that ending ring-fencing does not become an excuse for phasing out funding or squeezing budgets, and that local councils do not end up getting the blame for what is, in essence, the removal of money by central Government."-[Official Report, 20 October 2009; Vol. 497, c. 194.]
My fourth question is on a matter about which hon. Members have spoken eloquently. The Sheltered Housing UK Association, a campaign group, recently wrote to the Deputy Prime Minister because he had said in a pre-election interview with Inside Housing that residents should be able to vote on whether to keep a live-in warden. We have heard that the Deputy Prime Minister
has made an initial response, but can the Minister tell us whether that excellent proposal is under active consideration?
On my fifth question, the Minister signed early-day motion 60 last year, which expressed concern about reductions in funding for Supporting People services. It called on the then Government to take action to ensure that the vital service of warden-supported housing was retained, because reductions were having a
"detrimental effect upon the quality of life of many vulnerable people who rely on warden-supported housing".
The Minister will be fully aware that the Government have announced unprecedented cuts to local government funding. What impact will those cuts have on vulnerable people, and particularly the elderly, who rely on local government services? Crucially, have the Government conducted an impact assessment of the effects on social care services of cuts to local government funding? If so, will the Minister publish it?
In conclusion, the debate has raised a number of serious questions about the treatment of residents in housing schemes and about their concerns over the changes that they face. One strength of today's debate has been that it has celebrated the good, while expressing concern about the bad. There is concern on all sides to ensure that we maintain the support that the elderly and vulnerable are entitled to expect. I thank the hon. Member for Stourbridge once again for securing the debate, because she is right that this issue is absolutely centre stage in the debate about how we go forward in difficult times. I hope that the Minister will respond to my questions.
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): I am very happy to be serving under your chairmanship for what I think is the first time, Mr Davies. Let me tell my hon. Friend the Member for Stourbridge (Margot James) that this has been a very worthwhile debate on an extremely important question, and I thank her very much for bringing it to the House.
My hon. Friend made some strong and effective points about the problems in her constituency. Like other Members who have raised a significant issue in the House, she has had, if not the pleasure, the experience of finding that people all over the country hope that she will become their champion and write to her accordingly. Although I am sure that she will fulfil that role very well, I hope-indeed, I am sure-that she will be able to channel her resources towards dealing with her own constituents. She and other hon. Members raised some really important questions, which I will do my best to address.
It is worth repeating, as the hon. Member for Birmingham, Erdington (Jack Dromey) properly said in his balanced critique of what went before, that this matter has come before the House previously. There have been two Adjournment debates in the past 12 months or so, which were initiated by hon. Members with concerns about exactly this issue. The Sheltered Housing UK Association rightly has a strong reputation for getting its point across to right hon. and hon. Members.
Let us go back to where the Government stand on this issue. We are clear that housing needs to be there, and that the support needs of vulnerable and older
people should be met wherever they live, whether in their own homes, with their family, in supported or sheltered housing, in the extra-care accommodation mentioned by my hon. Friend the Member for Stourbridge-I note her concerns that extra-care homes may be subject in due course to the pressures that she described-or in residential care establishments.
There is a whole range of accommodation. The Government are committed to making sure that people have appropriate accommodation and the support to enable them to live in it. The coalition agreement says:
"people deserve dignity and respect in old age, and...they should be provided with the support they need."
"We will help elderly people live at home for longer through solutions such as home adaptations and community support programmes."
By extension, we will ensure that arrangements are appropriate for people in sheltered accommodation, whether in the private, charitable or public sectors. The Department is looking at how we can help older people to access the practical advice, support and home adaptations that they need to stay in their homes or to move to more appropriate accommodation. We are working with developers and planners to facilitate a wider range of high-quality housing options for older people.
At the heart of what the previous Government did, and what we are continuing to do, is the Supporting People programme. The programme has been protected as far as possible in the spending review. As part of the review, we have secured £6.5 billion for Supporting People over the next four years. The hon. Member for Birmingham, Erdington is not wrong to say that the finances are under extreme pressure or that there will be pressures on local authorities and providers, but I want him to understand that the sum being spent on Supporting People-it will be £1.6 billion this year-will still be £1.59 billion by 2015, which represents an overall reduction of just £46 million over the four years. That shows that we have a very strong commitment, in straitened times and circumstances, to ensuring that the Supporting People programme has the resources that it needs and that front-line services for vulnerable people, including residents of sheltered housing, are protected.
Figures are a little hard to come by, but something like £180 million out of the Supporting People programme goes to support for people in sheltered accommodation at present and, by everyone's account, that is doing a good job. Hon. Members have rightly focused on the sector's problems, and I want to discuss those in a minute, but let us not forget that there are 600,000 older people in sheltered accommodation, the huge majority of whom are happy and comfortable there and, in the traditional phrase, would not be anywhere else.
How will the Government approach the matter? We have said clearly and strongly that we believe that local authorities are best placed to identify services to meet the needs and balance the priorities in their communities. It is for local authorities to decide how best to design and commission the services that they believe are needed by all parts of the community, and to arrange for and deliver them-or enable them to be provided, perhaps by work with third sector and private sector providers. Central Government do not dictate to local authorities
or service providers the details of what local services to provide or how to do it, and we do not want to be in the business of micro-managing service delivery.
Andrew Stunell: That is primarily a matter for the Department for Work and Pensions and the Department of Health. I am happy to follow it up and to write to the hon. Gentleman and other hon. Members about progress in that respect. We should be quite clear: the Supporting People programme is non-statutory and has always been non-ring-fenced. That has allowed local authorities to draw money into it when they thought it necessary, and to use Supporting People money imaginatively and innovatively to provide good services by bolstering and reinforcing those they already had. It was never a ring-fenced fund and it still is not, and it does not cover a specific statutory duty, but I am happy to follow up on that point by writing to the hon. Gentleman and other hon. Members.
Later this month we will publish a localism Bill to devolve greater powers to councils and to neighbourhoods and local communities. It will return to them control over housing and planning decisions and will help to set the foundation for transforming the relationship between central Government, local government, communities and individuals. The philosophy behind the Bill includes the engagement and participation of residents and communities. Several hon. Members have rightly drawn attention to the fact that in some cases providers of sheltered housing appear deliberately to have sought to frustrate or bypass such consultation and engagement. The Government regret the fact that that happens and would want it to be challenged whenever it does.
Jack Dromey: Does that mean that the Government intend to honour the pledge given by the Deputy Prime Minister that residents of sheltered accommodation will have the right to vote on whether wardens are withdrawn?
Andrew Stunell: The hon. Gentleman is skilfully gliding over what he said to the House only about 10 minutes ago, which is that the Deputy Prime Minister favoured that approach; he did not give a pledge to introduce legislation, and I am certainly not going to do so. The hon. Gentleman has perhaps slightly gone beyond his very temperate approach, by trying to weave into it something that is not the case.
The localism Bill reforms, taken together, will shift power from the central state back into the hands of individuals, communities and councils. They will give local people, including community groups and residents associations-and why not groups of sheltered housing residents too-more power over local government and how public money is spent in their area, and will ensure that councillors are more directly accountable to them. They will free local government from central control so that it can ensure that services are delivered according to local needs; and they will let local people drive change through a renewal of confidence in a streamlined,
more efficient planning system, encouraging them to get actively involved in planning, housing and local services.
Before I return to the matter of sheltered accommodation I should perhaps mention that I probably got slightly carried away before in saying that Supporting People was never ring-fenced, as it was ring-fenced initially but the previous Government de-ring-fenced it and we have continued with that.
Sheltered accommodation, as has been mentioned, has been evolving for decades. Perhaps 30 years ago the model was somewhat institutional, and there is a hangover from that in accommodation that is really just bedsits with oversight. A decade or so ago, local authorities, including my own, went through an elaborate and sometimes painful process of upgrading their sheltered accommodation. The Help the Aged campaign report, "Nobody's Listening", which was published about 18 months ago, charted that progress. Part of the evolution of the way that care is provided has been a move to so-called floating support services. The reasons for that are, first, the changes in demand for sheltered housing, which have been alluded to in the debate; secondly, the fact that the standard of much sheltered accommodation is in need of improvement, which requires investment; and, thirdly, the fact that significant numbers of sheltered housing residents do not require support services. They are the "wellderly" or "active elderly", or are described in other such phraseology. I was interested to hear about the paper entitled "How we keep the new old young" by my hon. Friend the Member for South Thanet (Laura Sandys), and I congratulate her on her practical work.
Other factors are driving changes in the way that services are delivered, including the difficulty in recruiting resident wardens, which can be quite acute and has inhibited schemes in some places. The European working time directive somewhat constrains the hours that wardens work, so that sometimes a 24-hour live-in warden is not, in practice, as one might suppose, on duty for 24 hours seven days a week. Those are the practical realities that must be faced, alongside the direct financial constraints.
My Department receives correspondence from residents of sheltered housing complaining about issues such as being required to pay for services that they do not want. By a twist of fate, it falls to me to answer this debate at a time when I am in active correspondence with one of my groups of sheltered housing residents; they are campaigning against a 24-hour residential service, as they believe that it would not be good value for money or helpful. Perhaps the irony is completed by saying that the organisation that they are campaigning against is Peverel, which insists that they must have residential wardens. We live in a complex world where black is not always black and white is not always white.
Sheltered housing, like all other support services, cannot be immune from the wider demographic, technological and economic challenges and opportunities that we face. We need to encourage innovative ways of caring for and supporting people, so that solutions are more personalised and make the most of emerging technology. There are various ways of doing that, and it does not have to involve bad stories about call centres.
Telecare can bring substantial benefits. It can assist people to remain in their own homes, and it can reduce inappropriate admissions to hospital-although judging
by the story recounted by the hon. Member for Birmingham, Erdington, that is not always the case. It can also provide cover to allow for early discharge from hospital and advance warning of deterioration in a person's condition.
Local authorities are rightly responding to the changes in this market-although market may not be the appropriate word-in care provision. The resources available for housing-related support services are being carefully investigated at the local level, which means that local authorities are reviewing the services that they commission.
I agree with the hon. Member for Birmingham, Erdington that local authorities sometimes get it wrong. My hon. Friend the Member for Stourbridge said that 50 legal challenges are being made against 20 local authorities; and my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) said that that number might be bigger but for the legal barriers and hurdles that people had to surmount. Notwithstanding that, we should recognise that the majority of local authorities are getting on with the job. They are extending mobile support to older people in accommodation in the community, and the Supporting People programme gives them the flexibility to be innovative. Supporting People is tenure-neutral; it can be used to support people in private and charitable accommodation, and in third-sector and social housing. That is important.
What about consultation? Changes to housing-related support services should be designed to meet the assessed needs of service users, and changes to service delivery should take account of those people's views, with proper engagement and consultation with those affected. There are well established ways of doing that.
The Centre for Housing Support has been active in identifying and sharing good practice. In addition to its code, it works in partnership with TPAS, the Tenant Participation Advisory Service. It has provided deliverers of service with its publication, "Effective Resident Involvement and Consultation in Sheltered Housing: A Good Practice Guide for Providers and Commissioners". That is the textbook that I would want all providers to use when delivering those change processes. The code highlights the importance of the genuine involvement and engagement of service users-the people who live in the homes, the householders. Indeed, I am not sure that the phrase "service users" quite captures how important the home is to the people who live there.
Change is inevitable. Providers and commissioners need to be aware that, in preparing and reacting to change, they should involve the users of their service. They must ensure not only that the users are happy but that the changes are appropriate and that value-for-money services can be developed. The TPAS report addresses the barriers to effective engagement, and gives a number of case studies and examples of good practice.
My hon. Friends the Members for Stourbridge, for South Thanet and for Hereford and South Herefordshire and others have drawn attention to cases where that engagement is not happening. My hon. Friend the Member for South Thanet was eloquent in her critique of what she called the vertical integration of services provided by a particular company. It would not be appropriate for me to say a great deal about the specifics of that case, but I know that various residents' groups have approached the Office of Fair Trading on some of those matters. We should await the outcome, and a
response, before commenting further. However, if issues of substance need to be addressed in relation to private provision, the Government would obviously want to take serious account of the evidence.
When developing and commissioning services, it is important that local authorities should take account of the views and experiences not only of residents but of best practice around the country. Consultation and needs assessment are critical factors in ensuring that changes in service are well managed and reflect the wishes of users, as well as enabling local authorities to meet the needs of all service users and give them value for money.
The importance of needs assessment and consultation with service users are built into the quality assessment framework for the Supporting People programme. The QAF was introduced in 2003, and it set out the standards that are expected in the delivery of Supporting People services. It also identified methods of producing evidence of achievement. Over the past five years, it has been a successful practical tool for ensuring continuous improvement in service delivery, especially for housing-related support.
The QAF was reviewed in 2008, after running for five years, to bring it up to date and to emphasise the need for high-quality individually focused services that aim to improve the outcomes for service users. The majority of administering authorities-local authorities with responsibility for the framework-continue to use it today. Evidence shows that other local authority services, such as adult social care, have adopted the QAF as the standard tool to measure the quality of services being delivered.
We welcome the fact that we are moving away from the centrally driven, target-directed delivery of local services. It is good to see that a tool is available to administering authorities-social services authorities and others-to allow them to monitor themselves, to ensure that they are accountable to those for whom the services are provided and that their services are delivered to a good standard.
The sheltered housing sector has an independent code of practice. It was developed in consultation with practitioners and service users, and is administered by the Centre for Housing Support. That code was devised back in 1993, and its standards have been continually refined and adapted. It is a way of passporting through the QAF and was the first independent code to receive such an endorsement. The code focuses on outcomes rather than processes-not on how one gets there, exactly, but whether the service is good and whether people are happy with it. It encourages providers to create local solutions better to meet and serve the needs of the community.
I have attempted to respond to the various questions raised during the debate. The Government take seriously the matters that were rightly raised by my hon. Friend the Member for Stourbridge, which were strongly underlined and reinforced by my hon. Friend the Member for South Thanet, backed up by my hon. Friend the Member for Hereford and South Herefordshire and mentioned in a number of interventions. As the hon. Member for Birmingham, Erdington said, there is scope for improvement. It is not the case that the previous Government had a monopoly of wisdom on this issue, although I imagine that the hon. Gentleman would say
that neither do the present Government. There is work to do and progress to be made, and it is a key issue. I hope that I have been able to show the House that the Government take the problem seriously and will be listening hard over the coming months to ensure that residents of sheltered housing get the service for which they have paid and which they thoroughly deserve.
I want to draw attention to the position faced by a constituent of mine, Mr Peter Summers, who visited my surgery a few weeks ago. For many years, Mr Summers operated a business supplying tyres from an industrial unit he had purchased. At 67, he sold his business but retained the premises, and invested in a personal pension fund. He spent some money refurbishing the building, and let it in 2005 at an annual rental of £35,000. In 2008, the tenant occupying the building went into liquidation and vacated the premises, leaving Mr Summers with some arrears and reinstatement costs of some £3,500, but since then he has been unable to find a new tenant.
In respect of the liability to business rates, Mr Summers enjoyed a period of transition for the first six months, from April 2008 to September 2008, but since then he has incurred a significant sum in business rates. In the six-month period from 30 September 2008 to 1 April 2009, he paid £8,628. For 2009-10, he paid full-year rates of £18,066, and for the current year he has paid £16,071. Over that period of two and a half years, during which he has received no services, his total expenditure has been £42,776. At a time when Mr Summers might have expected to contribute £35,000 a year to his pension fund, he has paid net outgoings of £18,000 a year, a difference of £53,000 per annum.
People such as Mr Summers recognise, in holding commercial property as an investment, that by virtue of the economic cycle, which can go up and down, there will be times when such a property may be vacant and there will be no income. Most investors in property must live with that fact. Mr Summers is prepared to live with it, but it strikes me as unfair that in addition to the loss of rental income, he must now bear a further loss in paying business rates when he cannot meet the sum from his income. He is effectively paying for services he is not receiving. He now faces the prospect of selling his industrial unit in a distressed market where prices have been forced down. The downward pressure has been caused partly by other investors' concern that if they buy the property, they will be liable for the vacant business rate. Mr Summers came to see me to ask for my support in lobbying the Minister to rectify the position, which I believe is inherently unfair. I advised him that I was happy to do so.
The situation arose in consequence of a change to empty property rate relief that took effect in April 2008. For decades until then, the Government had helped struggling businesses through empty property rate relief. Shops and offices received an allowance of 100% relief initially and 50% thereafter, and owners of empty factories and warehouses received a 100% permanent exemption. The Government's intention in reducing empty property rate relief was to provide incentives to bring vacant premises into use by encouraging rents downward. The change was intended to encourage property owners to re-let, redevelop or sell empty non-domestic buildings
and improve competitiveness for all businesses, including small and medium-sized enterprises, in terms of property costs.
Gavin Williamson (South Staffordshire) (Con): I declare an interest as outlined in the Register of Members' Financial Interests. Has my hon. Friend found, as I have, that the changes, combined with the difficult market conditions, mean that speculative development of office or manufacturing property has stopped? Many small manufacturing businesses are concerned about expanding or taking on extra premises, because if the market weakens, they might end up paying rates on empty properties.
On the Government's original intentions, they recognised some difficulty with the proposals, and the position was changed slightly in the November 2008 Budget report to exempt from business rates commercial and industrial properties with a rateable value of less than £15,000. Regrettably, that is below the value of Mr Summers's property.
Lorely Burt (Solihull) (LD): I discussed the repercussions of the change with the previous Government on many occasions. I think that the level is £18,000 now, but in Solihull one cannot rent a broom cupboard for rates of £18,000 a year, as I know to my cost. I criticise the previous Government tremendously for the repercussions. I have constituents in Birmingham who are trying to rent out property for £1 a square foot just to absolve themselves of their problems with the rates. Will my hon. Friend exhort the Minister to consider whether, in this current economic climate, some form of marginal relief might be possible, just for the time being?
Mark Pawsey: I am grateful to my hon. Friend for her contribution. I know that even in areas where rents have been reduced to the level that she mentioned, there are still no takers. If no businesses are willing to take the premises, the price is irrelevant. We know that the situation must change.
The regulations have been in force for more than two years and have had a number of effects, some of which the property industry expected and warned the Government about at the time of the change. On the failure to provide services, it can be argued in the interest of fairness that business rates are a tax on occupation with the intention of raising funds, in the same way as the council tax. However, clearly, if a property is not occupied, no services are being consumed, and it follows quite reasonably that no tax should be payable.
In many cases, the tax has become a tax on ownership rather than a tax on an income stream. Taxes are usually based on income streams, which means that they can be paid from profits earned. Again, where a commercial property is vacant, there is no income stream on which that tax can be levied.
Mr Marcus Jones (Nuneaton) (Con):
I congratulate my hon. Friend on making an important and compelling case. Does he agree that the imposition of non-domestic rates on vacant commercial premises has led to an
increase in the demolition of serviceable commercial premises and in the number of derelict sites blighting our towns?
Mark Pawsey: My hon. Friend, whose constituency neighbours mine, is entirely right. There have been unforeseen consequences, one of which is that it is more sensible for property owners to develop a property rather than retain it for future use.
The rates are almost a form of wealth tax, levied on ownership of an asset rather than the income derived from it, as was originally intended. In times of recession, many small businesses find themselves occupying properties too large for their immediate needs and look for a tenant to take their surplus space. Where they do so, the rents add to their income and the occupier of the business becomes liable for the business rate, but if they cannot find a tenant, they face the burden of further business rates. For most businesses, business rates make up their third biggest item of expenditure, after wages and rents. Also, business rates are a fixed cost. They do not decrease as turnover declines during recessionary times. I am concerned that in many cases, excessive bills are contributing to business failures and leading to higher unemployment.
A further unfairness is that it often takes a long time to find a tenant for vacant commercial property, a fact reflected in the time limit allowed for the non-application of rates. Even in boom times, an industrial property is likely to remain vacant for between 12 and 18 months. In the current economic climate, the loss of a tenant will almost certainly mean additional liability for business rates that might not have been budgeted for.
The effect on rental values has not been what the Government intended. They hoped that rental values would fall, but an April 2009 report by the Royal Institution of Chartered Surveyors suggested that that objective had not been achieved and that property owners were offering other incentives instead, such as rent-free periods. There has also been a detrimental effect on capital values. The same report found that because empty property rates make fewer investors willing to enter the market, investment levels in the sector have fallen.
Guto Bebb (Aberconwy) (Con): I congratulate my hon. Friend on securing this debate. The point about property values is important. In my constituency, responsible landlords have found themselves unable to proceed with property refurbishments and renewal work because they are paying rates on empty properties in other parts of the same area. The rates have a knock-on effect on the quality of the offer in towns such as Llandudno in my constituency.
I thank my hon. Friend for his contribution; he makes a very good point. The hope that the application of empty business rates would encourage the property owner to accept lower rents in order to keep their buildings occupied, and that it would support businesses in the economy generally, has not been realised. There is a parallel here with the position taken by Opposition parties in respect of welfare reforms. The Opposition say that there is no point in trying to force people to take jobs because there are no jobs available. Similarly, there is no point in trying to
force landlords to let commercial property cheaply if there are simply no occupiers to take up the space. There are absolutely no incentives for property owners to keep their buildings empty and not be active in seeking occupiers. In the case of Mr Summers, his failure over the past two and a half years to find a tenant has not been for the want of trying.
As mentioned by my hon. Friend the Member for Nuneaton (Mr Jones), one way in which property owners can avoid their liability for empty property rates is simply to demolish the property-if there is no building, there is no business rate. The RICS survey shows that the application of vacant property taxes is currently the strongest single factor in determining which buildings are demolished. It is often the older, less attractive properties for which, in times of recession such as now, it is more difficult to find a tenant. However, in most cases such properties are perfectly sound, usable buildings. An unintended consequence of the 2008 changes is that much of such low-cost industrial accommodation will no longer be available. Just as the country starts to emerge from recession, the start-up businesses that will be so important to our future prosperity will not be able to find any premises to operate from.
As my hon. Friend the Member for South Staffordshire (Gavin Williamson) mentioned, given the anxiety of completing a building, not being able to find a tenant and thus becoming liable for empty property rates, it is absolutely no surprise to find that property development companies are no longer developing commercial property on a speculative basis.
Esther McVey (Wirral West) (Con): I congratulate my hon. Friend on securing the debate. During the past couple of years in Liverpool and Merseyside, there has been considerable regeneration both as a result of speculative build and because people really wanted to put their heart into the city to develop and grow it. The tax on empty properties has stopped that process in its tracks because people wanted to look for secondary investors while developing inner-city areas.
Mark Pawsey: I thank my hon. Friend for that contribution. Clearly the redevelopment and stimulation of our town centres has been brought to a halt by this legislation, which has made that process much more difficult. Commercial property development companies are no longer building property speculatively-by which I mean property being built in the expectation of finding someone to occupy it, rather than having an occupier already in place. No new building has taken place and nothing has been left in the pipeline for later. Again, as the country emerges from recession, the consequence of that is that the accommodation needed by our businesses will still be in the form of paper plans, rather than completed buildings.
Andrew Bridgen (North West Leicestershire) (Con):
I declare an interest in line with the declaration of Members' interests. Business rates are undoubtedly a tax. When a building is empty, there is no rent. The crux of the matter is that this is a tax on an asset that has no income. As my hon. Friend has pointed out, that is distorting the property market and leading people to
make strange decisions. The cheaper properties at the bottom end of the market being used by start-up companies will be the first to be demolished.
Mark Pawsey: I thank my hon. Friend for his contribution. That point has been well made. Many years ago, I recall setting up my own business and occupying exactly the kind of property that would, by now, have been demolished. In my business's early days, secondary, inexpensive space permitted it to get started with relatively low overheads.
In addition to demolishing existing building, we will end up with no new building. My concern is that, as we emerge from recession, there will be no new industrial units for our businesses to occupy as they grow. That will have a significant effect in delaying our country's ability to emerge from the current recession. I am particularly concerned about the plight of small businesses and small private investors.
John Stevenson (Carlisle) (Con): For the record, I would also like to declare an interest in accordance with the register. Is the localism agenda not part of the solution, in that it should be up to local authorities individually to decide what should be charged and what percentage of relief should be given? That would reflect market conditions in different parts of the country.
Mark Pawsey: My hon. Friend makes an excellent point, which I am sure will be taken up by the Minister in his response. We are moving into an era of localism and it should be appropriate for individual authorities to make their own decisions on the matter, rather than having legislation imposed on them from on high.
Returning to the case of Mr Summers, the position of small private investors and small businesses contrasts significantly with that of larger, more established property companies that can absorb this cost in the round and are better able to respond. Of course, the business community fully accepts that the coalition Government need to take decisive action to deal with the country's deficit, and that any proposals such as those articulated by my hon. Friends this morning need to stand up against many other calls on the public finances at this difficult time. However, I contend that the consequences of the abolition of empty property rate relief on a significant proportion of the country's commercial property estate means that the matter should be given urgent and special attention.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill): May I start by saying what a particular pleasure it is to serve under your chairmanship, Mr Davies? I wish you well in this new elevation.
I congratulate my hon. Friend the Member for Rugby (Mark Pawsey) on securing the debate. It is an important topic and he put his case very cogently. I also thank hon. Members who intervened for the various points they made. The Government are alert to those points and want to take them on board, subject, of course, to the circumstances I shall set out briefly.
As I said, this is a very important matter, and I am glad that my hon. Friend has drawn hon. Members' attention to it because he has given me the opportunity
to set out the Government's position on business rates and the issues surrounding empty property relief. An important thread in my hon. Friend's comments that I endorse is the importance of the private sector. The Government fully recognise that the private sector is the driver of economic growth. That is why we are committed to rebalancing the economy and supporting business to provide the growth in jobs that the country needs.
Indeed, the Prime Minister's announcement at the start of this month set out the Government's plans to help small and medium-sized businesses to flourish and to encourage entrepreneurs. He has appointed Lord Young as his enterprise adviser and asked him to write a brutally honest report on what we, as a Government, can do to help smaller enterprises and start-ups, as mentioned in the debate, to prosper. Business rates are an important consideration, along with several others that I am sure my hon. Friends will appreciate the Government also want to address.
Andrew Bridgen: Does the Minister agree that the lack of Opposition interest in today's debate reflects the callous indifference of the previous Government to the plight of the small business man in the UK?
Philip Davies (in the Chair): Order. We ought to reflect that, in a half-hour debate, one would not necessarily expect anyone from the shadow ministerial team or, indeed, any other Member to be present.
Robert Neill: I understand that, Mr Davies, but there are criticisms of the previous Government's approach that I intend to make, and it is interesting that it is coalition Members who have attended to support the interests of businesses.
The Government, recognising the difficulties that we inherited when we came to power, have done much to support business. In the June Budget, we announced that we would reduce both the main rate and the small profits rate for corporation tax, which is another major outgoing; increase the threshold for employer national insurance contributions; and reduce employer national insurance contributions for new businesses in targeted areas.
Justin Tomlinson (North Swindon) (Con): On that point, does the Minister agree with me that if we used the national insurance holiday money to allow flexibility in the business rates for start-ups, we might see new businesses start up and new job creation?
We have also increased the enterprise finance guarantee, created a new growth capital fund and set up a regional growth fund. All those measures taken in the Budget set out the broader picture. We have also taken important action on business rates. In the Budget, we announced our intention to waive £175 million of backdated business rates demanded of businesses, including some, although
not exclusively, in ports. Thanks to that action, many companies across the country, particularly small and medium-sized enterprises, can now move forward confidently, unburdened by those unexpected debts. We will introduce the necessary legislation to achieve that in the localism Bill.
We also took action in the Budget to help small businesses through the business rates system. We are well aware that small businesses provide nearly 60% of our jobs and half of our GDP. We recognised the need to inject new life into that part of the private sector, so that enterprise can drive recovery. We therefore doubled the level of small business rate relief for one year-a measure that is currently saving approximately 500,000 businesses £390 million in taxes. More than a third of a million ratepayers will pay no rates at all for that year.
Alun Cairns (Vale of Glamorgan) (Con): I congratulate my hon. Friend the Member for Rugby (Mark Pawsey) on securing the debate. Does the Minister accept that business rates have a disproportionate effect on smaller business, which is demonstrated by the rate relief scheme? I accept the generosity of the rate relief scheme that has been offered, but does he not acknowledge its short-term nature? Businesses need to be able to plan over the longer term.
Robert Neill: I accept that the measures we have taken are for a targeted and limited period, but they are within the resources available to us, given the economic circumstances we inherited. There are longer-term plans, which I will discuss in a moment. My hon. Friend is right that we need to plan more comprehensively for the longer term in this regard, but it is worth noting that those two measures alone amount to more than £500 million of targeted support for more than 500,000 ratepayers to assist businesses in the current climate.
I would like to mention three other proposals on business rates that are aimed at supporting business and local authorities. First, we will ensure that all future business rates supplement projects, when they fund both more or less than one third of an overall project, will be put to the ballot, so that liable businesses can decide whether to impose the business rate supplement upon themselves. Liable businesses will therefore be able to vote for, and in effect approve, the planned economic development project that they will be funding. That was not available when the business rate supplement scheme was introduced by the previous Government. We think that it is right to ensure that there is only taxation with representation for small businesses in those circumstances.
Secondly, as announced in the coalition agreement, we are committed to finding a practical way to make small business rate relief automatic. We are determined to end that needless red tape that business faces and ensure that ratepayers get all the relief to which they are entitled, and I hope to be able to give hon. Members more details of that before too long. Finally, the Conservative party manifesto proposed that local authorities should be given new powers to introduce further discounts on business rates so that local authorities can respond to local circumstances by reducing business rates bills. The coalition Government are currently considering the scope of such powers. Again, I hope to be able to say something on that before too long.
I would also like to take the opportunity to set out our plans for the local government resource review, which will enable us to look at those longer-term, across-the-piece plans for business rates. We are committed to providing incentives for local authorities to promote economic growth through the business rates system. We outlined our proposals to enable councils to retain locally-raised business rates in the local growth White Paper. The philosophy of that White Paper recognises the point that my hon. Friend the Member for Carlisle (John Stevenson) made in his intervention on the advantage of giving greater local power in the setting of those rates. The proposals are designed to devolve exactly those sorts of freedoms and responsibilities to the local level as part of our decentralisation agenda.
We propose to take the work forward through the local government resource review starting in January, but I would like to reassure Members that that review will ensure that appropriate protections are put in place for businesses. We are clear that businesses should not be subject to locally imposed increases in the burden of taxation. We have made it clear that businesses would have the right to hold a binding vote on any supplementary business rates, as I have already said. A much more significant piece of work on business rates will come along in the new year.
Turning to empty property rates, we recognise that property taxes, in the form of business rates, are among the highest in Europe, and businesses would like us to do more to reduce that burden, which impacts on their growth and investment decisions. Nowhere is that more true than in relation to empty property rates. My hon. Friend the Member for Rugby set out extremely clearly the problems caused by the previous Government's reforms of empty property rates-problems that we fully recognise. I assure him that the present Government have tremendous sympathy with the position that his constituent, Mr Summers, finds himself in.
As my hon. Friend pointed out, from 2008-09 the exemption periods were restricted to three months for non-industrial property and six months for industrial property, with ratepayers being liable for full rates once the exemption period has lapsed. As he also pointed out, it is true that the previous Government claimed that the purpose of the reforms was to increase the costs of holding empty property, as a way of encouraging
owners of commercial property to re-let, redevelop or sell empty properties-or so it was postulated. That argument was based on an economic theory that was not, and is not, fully accepted by the business community or by many Members of this House. The previous Government also estimated that the change would increase net tax yield by £950m.
Faced almost immediately after the introduction of the reforms with deteriorating economic conditions, the previous Government recognised, perhaps surprisingly, that the reforms made things more difficult for owners of commercial property. That is why they introduced the temporary £18,000 rateable value threshold, below which empty property was exempt from business rates. As Members will be well aware, that threshold is due to revert automatically to £2,600 on 1 April 2011.
The economy is coming out of recession and growing again, thanks to this Government's policies. That should improve prospects for landlords seeking tenants for empty properties, but we recognise that ratepayers would like us to undo the previous Government's changes or to continue with the temporary measure. We fully understand and appreciate that view; the difficulty is that our ability to take action on the reforms must be balanced against the high costs involved, the targeted support on business rates that we have already provided, and the overriding need, as my hon. Friend recognised, to reduce public expenditure and support the economy by reducing the deficit.
I assure my hon. Friend that we most definitely recognise the problems caused by the previous Government's unfair changes. We will certainly keep the matter under review in the light of the work that we propose to undertake, and we will keep in mind the position of Mr Summers and others like him. We want to work constructively with the property industry on this inherited problem that we are trying to sort out, and to take appropriate action as and when our national finances allow. I hope that the major actions that we have already taken on business rates and those that we will be taking through the localism Bill demonstrate our commitment to providing targeted support to businesses through the business rates system. I thank my hon. Friend again for raising the matter.
Tony Cunningham (Workington) (Lab): It seems rather appropriate to have this debate on a day when floods have hit Cornwall. It is nice to see so many Cumbrian colleagues in attendance. I thought I would begin by doing something that I think is appropriate. On the day of the floods we lost a very brave police officer who undoubtedly saved many lives; he left a wife and four children. We then had a terrible bus crash, in which two young people and the driver lost their lives. On top of that, we had the terrible horrors of the shootings that took place not too long ago in the constituency of my hon. Friend the Member for Copeland (Mr Reed). I therefore ask Members to stand with me in silence for a few moments to commemorate those losses.
My memories of the floods are almost surreal. I had already spoken with the Environment Agency when river levels were rising, but when I walked into my local in Workington, the Green Dragon, everyone gathered there was, unusually, glued to the television screen, watching with incredulity. They could not believe what they were seeing: lifeboats on the main street of a small market town, and floods that, at their height, were eight or nine feet high. At one stage, the lifeboats could not be launched because of the speed of the river. I rang the then Secretary of State for the Environment, Food and Rural Affairs, my right hon. Friend the Member for Leeds Central (Hilary Benn), who had just got back from Brazil. He agreed to come up, and the following morning I was standing with him on the market place in Cockermouth, just off the main street, and the water around us was still very high. All we could hear were helicopters, and there was a bright yellow RAF helicopter winching someone to safety.
The phrase I used in my first television interview after the floods was not mine. While my right hon. Friend was being interviewed, I turned to someone from the town and said, "This is just unbelievable." He replied, "Yeah, Tony, it's like something out of the Bible." The Sky television interviewer then asked me how I would describe the floods, and I immediately said that they were of biblical proportions. That was copied and echoed by many newspapers and so on, and people said that I was clever to think of it, but the words were those of a constituent who just happened to be standing next to me.
On that first day, we got in touch with Cumbria Community Foundation and launched an appeal. The nuclear industry in particular was extremely generous, giving tens of thousands of pounds to start it off. Cockermouth, Workington and Keswick are relatively small towns, but we raised about £2.5 million in that appeal, which says everything about the generosity of west Cumbrians, of Cumbrians and of the rest of the country. In fact, donations came in from other parts of the world.
The real heroes in the early days were the emergency services. What I am about to say I say not in anger, but in sadness. The police were absolutely superb in those early days, and yet today they are facing 20% cuts. The police community support officers who did such a fantastic job are now threatened with redundancy, and I understand that the number of local neighbourhood policing teams is to be cut from 21 to 10.
Mr Jamie Reed (Copeland) (Lab): My hon. Friend makes a powerful point about our local police. Like me, he spends a lot of time speaking with members of the police force, including PCSOs. After the year they have been through, how do they feel they are being treated at the moment?
Tony Cunningham: They feel let down, is the honest answer. I recently received a letter from a PCSO in one of the towns I represent-I will not mention which one-who made just that point. She said, "When the community needed us, we were there. We now need the state, the county council or whatever to help and support us. I hope they will be there for us."
Turning to the ambulance service, there was recently a vote of no confidence by nurses in both the West Cumberland hospital and Carlisle hospital in the local trust because of cuts, changes to working patterns and so on. They did an incredible job, and not only during the floods. My hon. Friend the Member for Copeland was there for the people he represents after the shootings in his constituency, and we can only imagine what it must have been like for those nurses having to deal with that. In such small communities, the victims were often people they knew, and gunshot wounds, as we know, are particularly horrific. Yet this is where they are now.
"The Government should urgently put in place a fully funded national capability for flood rescue, with Fire and Rescue Authorities playing a leading role, underpinned"
"by a statutory duty."
That recommendation was published in 2007, and I wonder where we are now. I talked with my local fire officers just a couple of hours ago. The centre where gold command worked during the floods was in Cockermouth, in the fire and rescue service headquarters. That is now going. The service has been offered either a relocation to Penrith, with a reduced number of staff, or outsourcing, which means they would all go. They co-ordinated the entire rescue, with the police, the coastguard and everything else, but that is what they tell me is happening to them.
Tim Farron (Westmorland and Lonsdale) (LD):
I sympathise very much with the hon. Gentleman's points. He listed the three professional emergency services that played such a crucial role a year ago, as they have done many times since. He may be coming to this point, but for many of us in Cumbria there is a fourth emergency service: the mountain rescue teams. His party's Government refused to give back the VAT and vehicle excise duty that those teams have to pay from their voluntary donations. The present Government have made sympathetic noises about that. Will he join me and other Members
in pressing the Government to release what is a relatively small amount of money to give those teams not only a financial boost, but the formal endorsement that we, the community, recognise the value of their work?
Tony Cunningham: I thank the hon. Gentleman for his comments and congratulate him-or perhaps offer my commiserations-on becoming president of his party. It is a great honour for him and for the county, so well done.
The hon. Gentleman can have a look at my speech notes, if he wants, but the next two words on the page are "mountain rescue". Cockermouth mountain rescue team, in particular, gave immense help. It is unusual for people in my position to apologise, but I will, because we should have done as he suggests and exempted mountain rescue teams from VAT. I fed that into the Government whenever I could, but it was always resisted. I am happy to apologise for the fact that my Government-the Labour Government-did not do that. I fully support what he, the hon. Member for Penrith and The Border (Rory Stewart) and others are trying to achieve, because it is important. There is a symbolism associated with it. It would say to the mountain rescue teams that they are recognised, and they should be rewarded and congratulated. As a little aside, in 2001, my very first question at Prime Minister's Question Time was on mountain rescue teams. I have a great affinity with them, and I am happy to support what the hon. Member for Westmorland and Lonsdale (Tim Farron) proposes.
Something else that is close to my heart is the lifeboat service, and during the floods the Maryport inshore rescue lifeboat in particular did incredible work. Just before the regional development agencies were disbanded, we had agreed a sum of about £1 million to build a new lifeboat station. That service now has a brand-new lifeboat, but nowhere to put it. It had planned to put it into a brand-new lifeboat station in Maryport, but there is no RDA funding.
I could go on discussing the emergency services. The RAF, too, did an incredible job, as did the coastguard and an organisation that many of us did not really expect to see: the Royal Society for the Prevention of Cruelty to Animals. That sounds strange, but the RSPCA was involved. I can remember being at a barrier set up to keep people away from the danger, and an elderly couple came up to me whose only concern-whose greatest concern-was their pet, which had been left in their flooded house. I got in touch with the RSPCA, which got a basket and rescued it. We should not forget its contribution.
The Environment Agency, in particular Glyn Vaughan and his team, did and are still doing a tremendous amount of work. In all the discussions and debates that the Minister will have on budgets, he should ensure that the Environment Agency is protected as much as possible.
Before my hon. Friend moves on too much further, we do not yet know the cost of the Cumbria floods. I believe that the insurance adjustments are about £200 million so far-I repeat, so far. The RSPCA undertook a fundamental role in protecting livestock. Has he spoken to any farmers-I know that he has spent a great deal of time with them over the past
year-who need feed for their herds and cattle about the role of the RSPCA and how much money it may have saved them?
Tony Cunningham: Thank you, Mr Sheridan. I very much concur with my hon. Friend's comments, and farmers are saying that. Let us not forget that hundreds, if not more, of cattle, sheep and other livestock ended up out in the Solway Firth, having come down the Cocker or Derwent rivers and been swept away. The livestock were hugely important, but the fields are still covered by boulders and debris and there is still a huge amount of work to be done.
I also pay tribute to volunteers, of whom there were hundreds during that extremely difficult time. I am not sure how many of us would put up complete strangers. I am not sure how many of us would say to someone we had just met on the street, who had only the clothes that they were wearing, "Come and share my house with me," yet that is what people did. They offered their own homes and bedrooms; they fed others and looked after them.
Another group I pay tribute to-I know that the hon. Member for Westmorland and Lonsdale will agree with me-is the churches. We forget at our peril the spiritual side of all of this. When people are going through trauma and difficulties, having lost their home and possessions, it is important to be able to talk things through with others. The churches were on the streets, not just offering tea, coffee, sandwiches and so on, but listening and talking to people, and being there for them. The churches together played a huge role, particularly in Cockermouth.
I also pay tribute to the local authorities, who did a tremendous job, in particular Jill Stannard, the chief executive of Cumbria county council. Other Members here will have known Jim Buchanan, a good, honest and decent man who passed away quite recently. I pay a personal tribute to him. [Hon. Members: "Hear, hear."] I also thank Harry Dyke and Jill Elliott from Allerdale borough council.
While I am thanking people, I should thank the media-I do not do that very often-both national and local. The Sky coverage was excellent, as was that of Border Television, BBC Radio Cumbria, and in particular my local newspaper, The West Cumberland Times and Star, and Nicole Regan and her staff. Their conduct was fantastic.
My hon. Friend mentions the role of the media in the floods last year, and the crucial public service that they performed in informing people about water levels, weather forecasts and the emergency responses that were in place. Was he as saddened as I was to see such a stark contrast between how the media undertook and performed such a fundamental good this time last year, and how they acted in June?
Tony Cunningham: My hon. Friend is absolutely right. In a sense, the media were with us for the floods, but during the terrible incident of the shootings-we have spoken about this in other debates-elements of the media behaved deplorably, offering people money and so on, so that within days the vast majority of people in west Cumbria wanted them to leave them alone.
I have said that the floods rose to nine feet. I talked about sheep and cows going down the river, but there were also containers-think of the size of a container on the back of a lorry-Ford Transit vans and people's garden sheds swept down. It was incredible. Much of the focus was on Cockermouth, where businesses were devastated and the flooding was horrendous, but I also want to mention Hall Park View, which is in Workington. It was completely flooded-every house under several feet of water. People there felt that the focus was not on them because Hall Park View is just a single street, but they suffered equally. They got a little angry sometimes, and I can understand that. However, I was speaking to a resident from Hall Park View whose house had been flooded by several feet of water and I asked her, "How are things?" She said, "Well, Tony, there are people much worse off than us." I thought that that summed up the spirit.
Rory Stewart (Penrith and The Border) (Con): The hon. Gentleman will also please remember the communities of Eamont Bridge. The suffering of Cockermouth was truly terrible, but even in places such as Eamont Bridge near Penrith, there was terrible devastation of people's lives and families. Perhaps we could look at institutional mechanisms that we can put in place to try to ensure that such things do not happen again. In Eamont Bridge, I noted the huge complexity of dealings with the Highways Agency and the Environment Agency, and trying to measure river flow. What sort of institutional procedures can we put in place to ensure that that does not happen again?
Tony Cunningham: I offer my sympathies to the hon. Gentleman's constituents. As well as Hall Park View, the village of Barepot was completely devastated, but because it was on the other side of the river, people tended to forget about it. In Camerton, people could not bury their dead because the churchyard was flooded. Wives could not be buried next to their husbands and so on-it was horrendous.
On the second part of the hon. Gentleman's question, there has to be co-ordination by a range of organisations, but the money has to be in place. I shall deal with local models a little later, but we could learn a great deal from the flood action groups-Sue Cashmore's group in Cockermouth and Cecil Thompson's group in Workington. Sue's group, working with Brian Watson, actually has a structure. It has a chair and sub-committees, including ones dealing with the media and the Environment Agency. It is a very professional organisation, from which we could learn a great deal.
We have said that Cockermouth flooded, Workington flooded, houses flooded and so on, but that was only part of the story. The hon. Gentleman mentions Eamont bridge. The bridges going down in west Cumbria was absolutely devastating. Not only did it result in loss of life, but we lost Harbour bridge; we lost Northside bridge, where PC Barker lost his life; and we lost Navvies
bridge. Workington, or Calva, bridge is still not open. On the Saturday, the Papcastle bridge was closed as well, and I talked to a taxi driver the following day. He had already agreed the fare-£5 or £6-to go from Workington to Seaton, which is a journey of about a mile. Someone standing in Workington can see Seaton. That day, the taxi driver did a 180-mile round trip: he drove from Workington to Penrith, Penrith to Carlisle, Carlisle to Maryport, and Maryport to Seaton. He then dropped his passenger off-for a fiver-and drove all the way back. That gives hon. Members some idea of the difficulties that we faced. On top of that, even when Papcastle bridge was repaired, people were still doing 20 or 30-mile round trips, when a mile would normally have done. The forbearance and patience of people in Seaton, Siddick, Northside, Barepot and further afield who were having to travel such huge distances, was absolutely incredible.
Mr Reed: My hon. Friend is giving a moving, telling and detailed description of the events of last year. He has talked about the travel chaos and the absolute devastation that was caused to businesses and to people's ordinary lives, but would he, as a former teacher, care to talk about the effect on the schooling of children in our part of the world-not just the effect on academic achievement and attainment, but the impact of the disruption to their lives, including their psychological well-being?
Tony Cunningham: I am very happy to do that. I spoke to the then Secretary of State and the Schools Minister, and made the point that it might have to be borne in mind that, because of the disruption, some of the students would not do as well in their exams as they could have. They were having to get up two hours earlier and were then stuck in traffic, going round and round. Those who had been flooded out might have been living in a caravan, rented accommodation or a bed and breakfast, and might not have had a computer or been able to do their homework. All that had a massive effect. I was delighted that the Government gave additional funding for extra buses, but having to travel 30 miles to get to school, perhaps arriving late, and then leaving early and missing lessons so as to get back, also had a massive effect.
The big change came within a week of the floods, when we managed to get a footbridge up and running. People said to me, "Why did it take a week?" and I was thinking, "Hang on. We've done very well to get it done in a week." I want to pay tribute to the Army, who did a fantastic job. I think that the footbridge came from Bedford. Getting a footbridge from there to Workington and getting 200 soldiers up there to pile both sides of the river and get a bridge across in a week was a phenomenal achievement, and it said an enormous amount about the armed forces. The local people took them to their hearts and kept going down with pizzas, cakes and sandwiches. After a few days, I spoke to the Army officer in charge and he said, "What is marvellous is that we have to do lots of drills and practices, and it's nice to do something for real that makes a huge difference to the lives of people here."
The hon. Gentleman rightly pays tribute to the swift work that was done to tackle some of the worst infrastructure problems. The previous Government,
the local authority and the emergency services deserve credit for much of what has happened over the past 12 months. It is worth flagging up, however, that in Backbarrow in my constituency there is still no footbridge. Some 12 months on, the residents who live on one side of the river-the overall majority of the population-have no means of getting easily across it to where Leven Valley post office and primary school are located. Still today, children are being bused in to a school to which they ought to be able to walk. That is a county council responsibility, but perhaps the hon. Gentleman might ask the Minister to intervene, as the case is relatively easy to fix. That community is still rent in two.
Tony Cunningham: I am sure that the Minister has taken appropriate note of that. As the hon. Member for Westmorland and Lonsdale and the other Cumbrian MPs know, in the near future hopefully all six Cumbrian MPs will meet, and one issue that we will look at is flooding and bridges.
Mr Kevan Jones (North Durham) (Lab): I join my hon. Friend in congratulating the Army, and I also congratulate the reservists on the role that they played in securing the footbridge. The Minister had a bit part in the Government's response to the Cumbria floods. Does my hon. Friend not worry, as I do, that with the abolition of the Government office for the north-west, which played a key role in co-ordinating not just the Army's response but that of other agencies, and the abolition of the other RDAs, there will be a gap there for any other future natural, or other, disaster in the English regions?
Tony Cunningham: I share that concern. I am delighted to see here the former Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for Leeds Central, who vividly remembers the floods.
On the first morning, I rang Steve Broomhead, the chief executive of the regional development agency, and said, "There's devastation here. If you look down the main street you will see that businesses have been flooded beyond repair." He said, "You can have £1 million," and not only did he deliver on that, but in the end he delivered £1.45 million to businesses. About 90% of the businesses in Cockermouth are back up and running, due in large part to the care, work and effort of the RDA, and that will be sorely missed.
Rory Stewart: This incredibly useful contribution is a fantastic way of raising with Parliament and Ministers the problems with the floods, and with planning for the future. May I push a little, not just on resources but on what we can actually do regarding planning, institutions and training? Looking at the current water levels in my constituency, and at what is happening to the world's climate in general, what worries me is that we might be moving into a world where this happens far more frequently than we would like. Are there things, apart from providing money, we could do to ensure that this is a priority for the years to come?
There are things we can do. I mentioned the Pitt report, which I hope will be implemented. That will give a statutory role to all this planning. I am not saying that lack of maintenance
caused the floods-they were created by the huge amount of rain-but dredging needs to take place, and we need to maintain our rivers. Part of the reason why the tree trunks and the branches came thundering down the rivers was that the rivers had not been cleaned out. If the Environment Agency has to make dramatic cuts in its budget, I am worried that one thing it will not do is all the general physical maintenance-the cleaning and dredging. That concerns me, and I am sure it concerns others.
Thomas Docherty: I congratulate my hon. Friend on securing the debate. He will probably share my concern that the Government are cutting by a minimum of 20% the flood defences budget-I remember that from the Environment, Food and Rural Affairs Committee. Does he agree that that will do nothing except increase the likelihood that we will see such tragic events in Cumbria and elsewhere in the country?
Tony Cunningham: I agree, and the best example I can give, if you will bear with me, is Carlisle. The flood defences created there cost about £35 million, and at the time of the Cockermouth floods, those defences held-only just, but they held. The estimated cost to the Exchequer-the state-of cleaning up if we had not invested that money was about £70 million or £80 million. Cutting back on flood defences and resilience measures is a short-term approach and does not value the long-term benefits accrued by investing now and in the near future.
John Woodcock (Barrow and Furness) (Lab/Co-op): I congratulate my hon. Friend on securing the debate. Powerful points have been made about maintenance and the need for co-ordination, and although he is right about the flooding in west Cumbria being of "biblical proportions", does he agree that both co-ordination and maintenance were absent in Ulverston in south Cumbria and in the surrounding areas affected by flooding? There needs to be maintenance of investment and greater co-ordination to prevent buck-passing between agencies and local authorities. We have to grip this now if we are to prevent a repeat of the problem, as we have seen in the past week in Lowick Green, where the Farmers Arms flooded again, almost to the day that it was afflicted last time.
Tony Cunningham: I agree, and co-ordination has to take place. If we do not invest now, we are only storing up problems and difficulties for the future. It is a little simplistic to say, "Well, we've got these budget cuts that we need to make". To cut off or slow down funding now, which will mean a huge loss of investment in years to come, does not make any sense to me.
The hon. Gentleman is being characteristically generous. On the point about co- ordination being so critical, I pay tribute to the right
hon. Member for Leeds Central (Hilary Benn) for the all-party work that helped the Flood and Water Management Act 2010 pass at the end of the previous Parliament. It gives out co-ordination powers and various responsibilities. Does the hon. Gentleman agree that that means that those authorities that have been given responsibility need to take it? I have two examples. First, many communities around the Lakes, in my constituency and in others in Cumbria, such as Bowness and Ambleside, flooded because of poor preparation regarding the maintenance of water levels in the Lakes at the wrong time of year. Secondly, one only gets a flood warning text if there is a risk from river water flooding, not if the risk is from surface water flooding. Those issues need to be tackled, because although it may have been a once-in-a-thousand-years occurrence looking backwards, as my hon. Friend the Member for Penrith and The Border (Rory Stewart) said, looking forwards, these will be much more regular occurrences.
Tony Cunningham: I agree. Picking up on the hon. Gentleman's point about co-ordination, I actually began having meetings with Cockermouth flood action group before the floods, and I have had meetings with Barepot-Workington flood action group as well. One of the things I always insist on is inviting Natural England, the Environment Agency, the Lake District National Park Authority, the Highways Agency, the local council and so on. Doing so avoids the issues that the hon. Member for Westmorland and Lonsdale raised. If we are all sat round the same table with the residents from the action group, it is difficult to pass the buck and say, "Well, it's not us, it's the county council", or, "It's not us, it's Natural England".
Mr Reed: The hon. Members for Penrith and The Border and for Westmorland and Lonsdale are right: more can be done that does not necessarily require additional hundreds of millions of pounds of expenditure. However, as my hon. Friend said regarding Carlisle, not only did the expenditure there save up to 3,000 homes on the night of the 2009 floods; it saved 1,200 jobs at McVitie's biscuit factory. The cost saving there alone was well worth the £35 million that went into the flood defences.
Does my hon. Friend agree that we need hard defences as well as the soft defences further on in the environment? Parton, a village in my constituency, that has suffered in the past from flooding now has its own flood action group. People take shifts at 2, 3 or 4 o'clock in the morning when the rain falls, alert each other, put down the sandbags and put in the flood barrier defences. We had council workers working in their spare time-unsalaried-and local businesses, such as drainage firms such as Mayson Bros, providing investment out of their own pocket. They were not contractors; they were doing it because they wanted to do it. That is the definition of something that has existed for 200 or 300 years-the big society. That same building company, if it is on the bones of its backside because the contracts are not coming in, and that same council worker, if he is still in a job, probably will not be inclined to put in that extra effort now-
Tony Cunningham: I agree with my hon. Friend. Sue Cashmore and Brian Watson's group in Cockermouth has looked again at what happens when they get a flood warning-who goes where and to which high ground and which buildings, and how many people there are. It is all organised and sorted, so if that is what the big society is, they are doing it and have been for some time.
I mentioned the footbridge, which was vital, but we needed a road bridge, and the only bridge that existed was the railway, so we needed a new railway station and a train to run between Maryport and Workington, because that was the only way of getting across the river. I pay tribute to my right hon. Friend the Member for Tooting (Sadiq Khan), because whenever I went to him and said, "I need", he said, "You can have". There was rarely a hesitation. I said, "Look, the need is desperate. We need a road bridge quickly". I think we got a road bridge in about three months, which cost about £5 million. That is a lifesaver for people on both sides of the river. The free train cost about £1.5 million, and sometimes it was full and had to do extra journeys, but it kept the wheels oiled and turning. I am delighted that my right hon. Friend is here.
Tony Cunningham: The team of companies that got the new rail station up in, I think, six days, which is an incredible record, won a national award at Grosvenor House. We have all seen when travelling by train the people at the ends of platforms taking the numbers, and one of the funniest things was that they flocked to west Cumbria. There was a new train and station, and they were there taking photographs, which helped the tourism industry enormously. Strangely enough, the chief executive-the top man-of Direct Rail Services Ltd lives in Seaton, so it was useful for him to be able to get backwards and forwards.
Tim Farron: This will be a brief intervention as the hon. Gentleman has been very generous. On tourism, I wonder whether it is worth pointing out that the media, which did a wonderful job during the flood crisis, as has been said, nevertheless also contributed-probably inadvertently-to the general sense that Cumbria was closed for business. When the flood waters went away, perhaps even after a week or 10 days, people as close as Lancaster would not visit the Lake district because they assumed that we were all in complete chaos. As may have been noticed, I have kept out of the resource discussions, but as the hon. Gentleman will doubtless agree, a strong marketing operation is utterly crucial, so that Cumbria can stand up against those problems and ensure that it is clear that it is open for business when such things happen, as they occasionally and inevitably do.
I very much agree, and I want to touch on tourism a little later. There are ongoing problems; there are businesses still not back in operation and people still out of their homes. I want to highlight one particular case that I have been trying to deal with: that
of Mrs Michelle Lockett, who is still not back in her home due to disputes between loss adjusters and the insurance company.
I am sure this is only a coincidence and has nothing at all to do with the debate, but, strangely enough, I got an e-mail this morning-we should remember that this situation has been going on for 12 months. In it, a guy from the National Insurance and Guarantee Corporation-the insurance company-says:
"The current position with this claim is that the majority of the Buildings element of the claim has been settled...With regards to the Contents element of the claim we have agreed to accept this part of the claim subject to the normal terms and conditions".
Having said that, I am not going to have a go at all insurance companies and loss adjusters. When I meet them, they say that 70 or 80% of people are happy with what went on. There are examples of good practice among such companies. Some people in Cockermouth were back in their homes within a couple of months. I am not, therefore, having a go, but there is still a lot of work to do.
Mr Reed: Does my hon. Friend agree that the insurance industry, of course, also includes practitioners of whom we would not want to see too many? However, the insurance industry and the insurance companies were a pivotal component of the community's response in getting back on its feet after the floods.
Tony Cunningham: Yes, absolutely. I pay tribute to the insurance companies and the good loss adjusters, but I want to remind people that things are not perfect. If people are still out of their homes after this length of time, something has obviously gone wrong.
I have a few ideas for the Minister from constituents-people such as Sue Cashmore and Michelle-about how insurance can be developed. I will not go through those ideas now, but leave them with the Minister. I ask him to take serious cognisance of them, because local people often have some very good ideas. I also had a visit from the CBI recently. It had concerns about climate change and small businesses, and perhaps I can pass on its comments and questions to the Minister.
Tony Cunningham: The hon. Gentleman will have an opportunity to reply. I have come across examples of insurance premiums being tripled or quadrupled and of people being asked to pay a £10,000 or £15,000 excess. People could now be asked to make a contribution on top of that. In my discussions with people in west Cumbria, that idea has gone down like a lead balloon.
I know that tourism is close to the heart of the hon. Member for Westmorland and Lonsdale. [Interruption.] I welcome the hon. Member for Carlisle (John Stevenson). It is nice to see him here. I think we have a full turnout
of Cumbrian MPs, which is superb. Tourism is vital, but I wonder what message it sends when the chief executive of the Cumbria tourist board comes to see me and says that one third or two thirds of his staff have had to be axed. Half of them have already gone.
I want to say something that moves slightly away from what I have said so far, and I am sure that my hon. Friend the Member for Copeland will talk about this, too, because it relates to the future of the nuclear industry. The one thing the people of west Cumbria-people such as Ron Williams from Bothel, Margaret O'Hare from Tallentire, and the residents of Westnewton-do not want any more of is in onshore wind farms. Even the planning inspectorate tells me that the cumulative effect of so many onshore wind farms in such a small area should be considered when looking at planning applications.
I supported offshore wind turbines, which generate enough electricity for about half of Cumbria. However, when people are prepared to put in a field half a dozen wind turbines that generate little electricity and are perceived as an absolute eyesore by those who have to live by them, we have to think again. There must be a balance between generation on the one hand and tourism and the environment on the other.
As Mr Ron Williams also pointed out-I can only concur-the wind blows on some days, but not on other days. However, the tide comes in twice a day, every day. We need to look at that issue, and I hope the Minister will say one or two words about it. There were plans for a barrage across the Solway to generate the electricity we need, but-
Jim Sheridan (in the Chair): Order. I genuinely hesitate to interrupt the hon. Gentleman, but the winding-up speeches will start at 3.40 pm. If other Members indicate that they want to speak, he will have to wind up pretty soon.
I want to say a couple more things just to finish. Two things stick in my mind. Let me give hon. Members an example of how Cumbrian people reacted to the floods. The bridge had gone down and, tragically, the police officer had been killed. The community of Northside was left without electricity or telephones. Hearing that elderly people in Northside did not have access to telephones-they were elderly so they did not have a mobile phone-someone from Penrith, in the constituency of the hon. Member for Penrith and The Border, went into the town, bought 10 mobile phones, put money on them all, drove to Workington and handed them in to the community centre, saying, "These are for elderly people who don't have access to telephones."
I have one other little memory, and I will finish on this note. Jennings brewery was badly damaged and flooded. It was not able to produce the wonderful beer that it normally produced, so the beer had to be produced in Burton. Ten pence from the price of the beer was going to the Cumbria flood appeal, and I cannot remember the number of times I was in a pub when someone said, "I think I'll just have another one. It's for a good cause." Those efforts raised about £178,000, which is a lot of 10 pences. It also says a lot about the amount of beer that is drunk.
In conclusion, people might think we are asking for special treatment in west Cumbria. However, I want the Minister to comment on the memorandum of agreement, because we are asking for the special treatment that is already provided for. I thank the Minister, and I thank all hon. Members for their comments so far. I will sit down and let others make their contributions.
Mr Jamie Reed (Copeland) (Lab): I am grateful to my hon. Friend the Member for Workington (Tony Cunningham) for securing the debate. He has been after it for some time, and I am glad that, as usual, he has succeeded. He gave me my start in politics-for good or ill-when I was briefly his researcher in the European Parliament and it is a pleasure to work alongside him now. I speak in this debate as the shadow Minister with responsibility for this policy area, but also as a constituency MP directly affected by these issues.
I wish to point to the tireless work that my hon. Friend undertook this time last year, not only for his own constituents, but for the whole of west Cumbria, including my constituents. When the floods hit, my hon. Friend was a Government Whip, so he was unable to take part in any debates. However, his constituents know what he did on the Thursday night, as the rain kept coming down. They also know about the work he threw himself into on the Friday morning, when the devastation became apparent, and about the work that he has continued doing to this very day.
It is often said that the man who is his own advocate has a fool for a client, so I feel duty-bound to say these things on my hon. Friend's behalf. Frankly, he hides his light under a bushel. I am proud to have him as my neighbour and to work alongside him on so many issues. I am also grateful that many of my friends and family members, who live in his constituency, have him as their MP.
My hon. Friend and I were in constant contact as the disaster unfolded, and I know what he did in the midst of the chaos-no one could have done more. He ensured that skips were made available for people emptying their homes. He went to buy nappies for the child of a young mother who was in desperate need and who did not know where else to turn. In addition-and he has not mentioned this-he was pivotal in establishing the local relief fund and in prising open the Treasury's coffers, with the help of my right hon. Friend the Member for Tooting (Sadiq Khan), who is no longer in his place, for funding for bridges, temporary train services and much more. I passionately believe that he provided a definition of a first-class Member of Parliament, and of leadership. He did what he did because he believes passionately in west Cumbria's people and potential.
The belief, optimism and hope that pervaded not just west Cumbria but Barrow and other parts of the county in November 2009 are harder to find now, as they are throughout much of the country, because in addition to the floods and the community-wide psychological effects-the trauma and devastation-caused by them, our area, as has been said, has suffered significant further trauma since then. Earlier this year, two school pupils from Keswick school were killed when their bus was involved in a road traffic accident. Such a senseless loss of life caused widespread grief throughout my constituency,
throughout my hon. Friend's constituency of Workington, in Allerdale and further afield. Soon after, as the community was still reeling from that disaster, 12 people were murdered in that quiet corner of England. The community is still dealing with that event and processing its long-term response. My heart goes out to all those who were affected, and I am grateful to all right hon. and hon. Members present today for the recognition and respect that they gave to them at the beginning of the proceedings.
I mention those events because they are relevant. They are issues to which the community must respond and challenges that we must meet. The pattern is clearly one of challenge after challenge. None of us can directly understand the pain caused to those families who were affected by the events, but as a community our response has been typically resilient. However, I must be entirely honest-as my hon. Friend has been and as I am sure other hon. Members will be-and say that that resilience is not helped when the community sees reductions in the number of police officers and hospital services; money for rebuilding its schools taken away; widespread redundancies at the publicly funded Sellafield nuclear facility, which is the cornerstone of our local economy; and now cuts to the national flood defence budget. Our community shows stoicism in the face of tragedy beyond our control, but anger in the face of ideologically driven political choices inflicted by a remote Government with a dubious democratic mandate. I shall move on to those issues later.
I wish to pay tribute again to PC Bill Barker, who lost his life in the floods on 20 November last year. PC Barker was a constituent of mine and few, if any, of us can know what the Barker family are going through now. As the anniversary of his death approaches, it must be particularly difficult. It is a difficult subject to talk about. However, following his ultimate sacrifice, I know that he still occupies the thoughts of our entire community. He is incredibly well thought of and is held in almost unimaginable affection in the town of Workington.
Tony Cunningham: I know that I have just spoken, but I want to pay tribute to Bill Barker's wife, Hazel, who is a wonderful woman. She lost her husband and has four children. When I meet her or talk to other people about her the one thing that comes through is the incredible dignity of the woman. I am sure that my hon. Friend agrees.
Mr Reed: My hon. Friend puts it better than I ever could. Mrs Barker has displayed remarkable integrity and incredible dignity and is a superb mother to her children. I am sure that her husband would have been very proud.
PC Barker gave his life serving others and did it instinctively. Many of us either would not or could not do that. His sacrifice provides a definition of heroism for us all. His heroism was commended by the then Prime Minister and the heir to the throne, but the tributes from his wife, children and colleagues dominate all the others, in my memory. He was a devoted father and husband, an extraordinary friend and a supremely committed police officer. He elicited a rare combination of love and respect from those who knew him. He gave all he had for the people he served and will for ever be remembered by the people of west Cumbria.
Last year, the towns of Workington, Keswick and Cockermouth, and the areas around them, were the places most seriously affected by the floods that hit Cumbria. In Workington and Cockermouth there was devastation that is uncommon in west Cumbria. Streets were swept away, homes were ruined, businesses were badly affected and lives were put on hold. As Alan Irving of the Whitehaven News remarked at the time, the whole community of west Cumbria came together in the wake of the floods. Rivalries were abandoned-my hon. Friend the Member for Workington and I need not talk about rivalry, as there is certainly none between us, but our towns have long been the best of enemies, in a friendly way-and the principles of community were reaffirmed across the whole of our county, with people in Whitehaven, Egremont and elsewhere showing incredible solidarity with their flooded neighbours.
On the Friday night after the floods hit, I stood in the Cockermouth sheep and wool centre in my hon. Friend's constituency, helping as best I could, as the then deputy Regional Minister for the North West. I was overwhelmed to see my constituents fetching what food, clothing, toiletries, blankets and, in some instances, toys they could to help the people of Cockermouth and Workington who were stationed there. Those constituents of mine, who had travelled 20 or 30 miles to do so, saw it as their job and duty, and it is typical of them and of the constituents of my hon. Friend that they should have done so.
There are many thank yous and stories from the days when the floods hit, and we will tell them for a long time, but we must first understand what happened. Credit must go to the Met Office for the ability it now has to predict extremes of weather with such precision. In the days prior to the floods we knew that they were likely. Heavy rain and gales affected Cumbria from 18 to 20 November, and the associated high river flows and flooding problems were made worse by ground that had already been saturated. By 18 November, Cumbria had already received close to the average rainfall for the whole month. The floods affected more than 1,300 homes and left many more without power and water. Of all the towns and villages involved, Cockermouth, as I have said, was the worst affected. Water levels there reached 2.5 metres. The village of Seathwaite set an unenviable record of receiving 314.4 mm of rain in 24 hours-a new UK record for the wettest November day in a single location.
|Next Section||Index||Home Page|