Having worked for a UK regulator with European regulators, I know that we often translate into English law and then interpret European directives in ways that are much less flexible and more burdensome than those

28 Mar 2011 : Column 125

in other countries. I welcome evidence-based proposals, therefore, to reduce and/or improve regulation. The improvements to clinical trial regulations proposed in the Budget should lead to better regulation, which is good for business and innovation. However, the sleight of hand by which the Government have delayed green building regulations will actually add to the uncertainty in the building industry and reduce our energy efficiency.

We should not forget that the financial crisis would have been even worse had Labour heeded Tory calls for more deregulation of the City. As the shadow Chancellor has said, we should have been tougher with the City, but the Conservative party was certainly not calling for more regulation in that case. Since coming to power, the Department for Business, Innovation and Skills—the self-styled department for growth—has introduce 26 new regulations in six months, of which several will impose a burden and substantial costs on businesses.

The Government’s repeated calls for reduced regulation are yet another example of their rhetoric exceeding their reach. We know that the Government are recklessly cutting too far and too fast, but they are also entirely failing in leadership. Labour believed that the Government had a duty not to pick technology winners, but to deliver the coherent business, academic and political environment in which the best can win.

Recently I visited a small but growing, innovative high-tech manufacturing company, Kromek, which is developing colour X-rays for security applications. It is based in NETPark—the North East Technology Park—in County Durham, a business park supported by the RDA and the local authority. However, the company is finding it hard to get the talent that it needs, because of the Tory Government’s visa policies—an example of new regulation preventing growth. As the north-east chamber of commerce recently said:

“Since the Government came to power, business have seen the reversal of plans to recycle Carbon Reduction Commitment revenues; the Feed-In Tariff capped; and a delay to the expected start date of the Renewable Heat Incentive. These changes are delaying investment in low carbon technology.”

That regulatory uncertainty means jobs being lost in new industries, including in the north-east. As NESTA—the National Endowment for Science, Technology and the Arts—said when discussing regulation:

“Removing barriers to innovation is important, but on its own it is not enough. Innovation happens in an ecosystem and Government has a role to play in constructing that environment.”

To conclude, rebalancing and growing our economy requires vision, leadership, regulatory imagination, coherent policies and targeted investment. This Government are offering up a few regulatory sacrificial lambs to distract from the vacuum at the heart of their strategy for growth.

9.6 pm

Eric Ollerenshaw (Lancaster and Fleetwood) (Con): I am grateful to follow the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who was trying to make some positive comments about regulation, as was the hon. Member for Sheffield South East (Mr Betts), who spoke previously. Unfortunately, however, what we have heard from the majority of Opposition Members is this line about how we are cutting too far, too fast. It would really help their presentation to the country, including my electorate—or at least their presentation

28 Mar 2011 : Column 126

to us—if they said which cuts they would be prepared to tolerate, because to my electors their position just sounds bogus and false. The Opposition have lost the argument about how we got into this problem, but it would be really useful in the argument about how far we cut to know their position. I can say from my attendance in the Chamber that they have opposed every one of the Government’s proposed cuts. We would therefore love to hear one or two suggestions from the Opposition about where they would be by now.

Like most Members, I suppose, I spent the weekend trying to find out what constituents really feel about this Budget, on the political proviso that we should be careful on the first day, and then see how it sinks in on the following days. We are now five days in, and if I can sum up the general view by quoting one of my electors, he said of the Chancellor—in true Lancashire fashion, of course—that he did not think that the lad had done too badly, given the poor hand that he had been dealt. I have found that to be pretty much the general impression.

As for growth, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) is absolutely right. Indeed, the north and western Lancashire chamber of commerce has said:

“Overall there is a lot in this Budget for Business,”

and specifically mentioned the corporation tax reduction and cuts in fuel duty. From the workings-out that I have seen, the Federation of Small Businesses gives the Chancellor eight and a half out of 10, welcoming the measures on fuel duty, the fair fuel stabiliser, apprenticeships, deregulation, enterprise zones and small business rate relief, and the doubling of entrepreneurs’ relief and the increase in the R and D tax credit for SMEs.

In the few minutes remaining, I want to pick up on something that my hon. Friend the Economic Secretary said last week when she talked about regional imbalances. Anyone who goes to the Fleetwood end of my constituency and asks people there what their view is of economic policy over the last 13 years, would simply be told that Fleetwood had been forgotten—a port now without a ferry service; a train line without a train on it. Yet behind all that—to return to the point made by the hon. Member for Newcastle upon Tyne Central—all that small businesses talk about are the regulations that prevent them from taking on more people. I have food processors in my constituency that export all over the world, but they are trapped by regulation. They want to take on more apprentices, and they hope that something will come from the measures in the Budget.

The interesting thing about Labour policy on the regional imbalance over the last 18 years is this. The Office for National Statistics uses a measurement called gross value added, which measures the contribution to the economy of each individual producer, industry and sector. It showed that there was decline in the north every year for the past 13 years as growth in London and the south-east increased. Lancashire’s rate of decline was twice that of the whole of the north over the past 13 years. The figures are consistent for every single year.

What has gone wrong? My right hon. Friend the Secretary of State for Communities and Local Government has suggested that the regional development agencies were not working, and I support that view. I sat on the board of the London Development Agency for four years. I have to be careful what I say, because I see my

28 Mar 2011 : Column 127

hon. Friend the Member for Ealing Central and Acton (Angie Bray) in the Chamber, and she was instrumental in getting me on to that board as the lone Conservative. But why did London need such an agency in the first place? It had all the bureaucracy and office-led systems of any other development agency. It also claimed that every person employed across the whole of London was employed as a result of its actions. I could never quite make that connection, because I thought that perhaps the City of London Corporation and the development in the docklands might also have had something to do with people coming to London.

There is a general view in my part of the world that people in London think that the north-west begins and ends with Greater Manchester and Merseyside. I am therefore not surprised that each of those areas is to have one of the new enterprise zones, but I hope that Ministers are listening and will perhaps decide that there will be room for one of the 21 zones announced in the Budget in part of Lancashire.

During my four years on the board of the London Development Agency, I learned that, while it is possible to spend money on all kinds training schemes, as the Opposition have proposed, infrastructure is the key. This Government have made a commitment to major transport improvements. I also hope that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) will look into the proposal in the Liberal manifesto for regional stock exchanges. Given the problems with banks and investment, they might encourage greater investment by local people in local businesses. The Chancellor should look into that. A great practical step forward would be the announcement of a Lancashire-wide stock exchange based in Lancaster.

9.12 pm

Nic Dakin (Scunthorpe) (Lab): It is always a pleasure to follow the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), and I will try to respond to his challenges.

The Budget statement treads water while this reckless Government cut too fast and too deep. While the Deputy Prime Minister confides that there will be nothing for him to disagree with the Prime Minister about in future television debates, the nation suffers. Indeed, the nation is bracing itself for worse to come. I was proud to join more than 250,000 honest Britons on the march for the alternative on Saturday. That was the big society in action, rising up to say no thank you to the Government, and I am happy to spell out what the alternative is. Strangely, it is the very alternative that the British people voted for last May. Let us be clear: no individual party won the 2010 election. The British people essentially said, “A plague on all your houses.” One thing is certain, however: they roundly rejected the Conservative argument that there was a need to clear the deficit in double-quick time over four years. That argument was well put by the Tory party and the Tory media, but the British people gave it a resounding no. Instead, more people voted for candidates who argued that the deficit needed to be reduced more carefully and more slowly.

As someone who has run an organisation employing more than 250 people, I well know the difference between

28 Mar 2011 : Column 128

making cuts of, say, 8% and 16%. Chief constables said that they could manage a cut of up to 12%, but that anything greater would harm front-line services. The front-loading of cuts in public expenditure will also make the situation far worse. There are many of us in the Chamber who have run real organisations in the real world, and we know that savings can be more intelligently and better made when they are properly planned and actioned over time. There is a massive difference between the quantum of the service reductions being recklessly driven forward by this Government and the approach that Labour has argued for.

Alongside cuts in spending and tax increases, there is a need for growth to address the deficit. The Government’s plan for growth is this vacuous document, and in its four-point plan, it is silent on how to stimulate the biggest driver for growth—demand. That is not surprising as the actions of this Government have been to machete demand. With consumer confidence in free-fall, unemployment rising exponentially and inflation fuelled by a VAT hike, living standards are being eroded and the economy is contracting. All this is before the cuts in public expenditure hit next month and we see record job losses in the public sector and the lowering of demand for goods and services in the private sector. It is not, I am afraid, a pretty picture.

Charlie Elphicke: I have been listening carefully to the hon. Gentleman’s argument. I am unable yet, however, to understand or hear what alternative he suggests. Will he tell us what his alternative is?

Nic Dakin: The alternative is to go much more slowly and much more carefully so that things can be managed out there in the real world. [Interruption.] I am sorry that Conservative Members just do not understand the difference between double and half. They simply do not understand it, but perhaps that will get through to them over time.

Nadhim Zahawi rose—

Nic Dakin: I turn to deal with aspects of regulation and economic reform.

Several hon. Members rose

Nic Dakin: I am not giving way, as other Members want to speak.

Let me welcome the decision to defer the fuel duty rise in line with what Labour called for. It is disappointing, however, that the rise in VAT on fuel means that even allowing for a 1p reduction, people still have to pay 2p more a litre.

There is potential merit in the incentives for further charitable giving, but these are limited in their scope. I hope that the Government will examine carefully the proposals brought forward, with strong cross-party support, in my recent ten-minute rule Bill. It is designed to ensure that charities taking over the delivery of services from the NHS—for hospice care, for example—are treated in the same way as the NHS in respect of the application of VAT to non-business supplies.

The Budget’s proposals to increase support for technical innovation and research and development are movements in the right direction, as are the faltering steps forward for the green investment bank. However, I am disappointed not to see greater emphasis placed on ensuring that

28 Mar 2011 : Column 129

future investment in energy infrastructure will be carried out and supplied by UK-based companies. Such an approach would support the sort of renaissance that is needed in steel-based manufacturing supply chains.

I am further concerned about the introduction of the carbon floor pricing. It is not only steel manufacturers such as Tata in my Scunthorpe county constituency that are sceptical, but organisations like Greenpeace, which said:

“The carbon floor price will put up bills, deliver a windfall profit for existing nuclear power stations and yet it won’t drive investment into clean energy and improved efficiency. It’s not so much a green tax as a stealth tax and it’s exactly the kind of measure that gives green levies a bad name.”

The proposals on planning law are confusing when set alongside the direction outlined in the Localism Bill. At first glance, these are Janus-like policies, pointing in two directions. As the hon. Member for Mid Dorset and North Poole (Annette Brooke) pointed out, they present mixed messages to an already confused world.

Finally, there is nothing in this Budget to support getting young people into work and much to create greater worklessness. The investment in apprenticeships is to be welcomed, but the key issue around apprentices is not student demand—there is plenty of student demand out there—but employer supply. As the Federation of Small Businesses says, small businesses

“are willing to take on apprenticeships given the right incentives.”

This remains sadly unclear. There was also disappointment that the Government had chosen not to extend the graduate internship scheme.

To conclude, this is a Budget that disappoints rather than inspires. It leaves the UK economy charging pell-mell in the wrong direction. It is a helter-skelter ride of falling demand, rising joblessness and falling living standards. I hope the Government will listen to the people, take stock and pause—before it is too late.

9.19 pm

Paul Uppal (Wolverhampton South West) (Con): I thank all Members for the speeches that they have made this evening. We have heard a bit of knockabout and a few partisan comments, and of course that is all good fun in the Chamber, but I want to shed some light on the issue. I want to draw attention to the writings of one Hamish McRae, the economics correspondent of The Independent—a newspaper which, if truth be told, has not always expressed a favourable opinion of Conservative Members.

From about 2005 onwards, Hamish McRae’s weekly columns highlighted the fact that the then Chancellor was quoting his famous golden economic rules less frequently, until he eventually stopped referring to them, in much the same way as he stopped using the word “prudence”. In later years, Mr McRae pointed out that the Chancellor had continued to borrow money even when tax receipts were fairly plentiful. Despite Tony Blair’s best efforts to stress economic credibility and use the term “prudence” from the beginning of the last decade, the Labour Government abandoned Conservative spending plans and resorted to type, which meant spending money. Labour Members cannot help it: in the end, they always think that they can cure society’s ills and promote social mobility by throwing money at a problem.

28 Mar 2011 : Column 130

The present Government have produced a pro-growth and pro-aspiration Budget. First and most important, it outlines a strategy for growth, a strategy for reducing the national debt, and a strategy for continuing to restore confidence in our once broken economy. We must never shy away from supporting businesses by offering competitive levels of taxation, and we in the House of Commons must send out the message that the country is once again open for business.

Over the last decade, many high-profile companies have left the UK to escape our complicated tax system and our higher than average rate of corporation tax. Given the increased mobility of capital and people, Britain must be an attractive place in which to work and live. We must be a beacon for investment from around the world and the jobs that it will bring. With this Budget, we can once again start to attract the kind of investment that the country needs. Britain must be able to compete to attract the brightest and the best, and enterprise zones, lower corporation tax and other measures outlined in the Budget will achieve that.

I am proud to be able to speak about what I feel is the most important part of the Budget, the part that deals with enterprise zones. I know that the black country has already been allocated an enterprise zone, and I am delighted that the Chancellor has made that decision. I have in mind Wolverhampton and my constituency of Wolverhampton South West when I say that I hope and believe that the reintroduction of enterprise zones will offer the black country an opportunity to rebalance the regional economy and provide the building blocks for future prosperity in areas that have missed out on capital spending projects over the last decade. I grew up in the shadow of Merry Hill. I remember the original site, and I saw with my own eyes the power of ambition and aspiration being tangibly enhanced as the buildings rose up in a sea of regeneration.

The recovery must be led by the private sector, and the Budget outlines how we will be able to achieve that. The growth of small businesses employing a handful of people will be central to our future economic prosperity. They are the engines of our economy, employing 60% of the private sector work force and contributing half the United Kingdom’s annual turnover. Lower taxation, planning simplification and less bureaucracy will provide an ideal cocktail of measures to kick-start local economies and encourage the growth of that vital sector.

Let me end by briefly discussing another of Labour’s legacies. Labour created an environment in which young people feel unable or unwilling to take the first steps in creating their own businesses. On Friday I visited a number of sixth-form politics and economics students. When they were asked whether they wanted to set up their own businesses, none of them said that they did. I was struck by their reaction, which suggested that future generations would not be inspired to go out into the world of business. Indeed, that supports the finding of commissioned research that 50% of young people do not feel that they are encouraged at school to be entrepreneurial. Changing that culture is vital to our economic future. Children in our education system need to be challenged and encouraged to take employment into their own hands. We need to invest in and develop talented young people, supporting them in the first steps on the difficult journey towards creating their own businesses and ultimately becoming successful.

28 Mar 2011 : Column 131

Perhaps more pernicious is the Opposition’s determination to play politics and present the most draconian picture of the responsibility measures taken by the Government. Indeed, the Leader of the Opposition compared the demonstration on Saturday to the struggle for civil rights and the suffragettes. In 2009-2010 Government spending was £669 billion; by 2014-15 it will be £647 billion, a few percentage points leaner. Even more tellingly, in 1999-2000 it was £343 billion, and had it followed inflation, it would have been £438 billion by 2009-2010. In fact, expenditure increased by over 50% in real terms during the current decade. Labour just cannot help itself: it will always be in its DNA to spend other people’s money. Thank goodness we on this side of the House are implementing measures to return the country to good economic governance and responsible spending.

9.25 pm

Kerry McCarthy (Bristol East) (Lab): The Government have had to face up to two challenges in this Budget. The first was to do with growth, on which the news presented to the Chancellor as he drew up his Budget was not good. The UK economy shrank by 0.6% in the last quarter and the Office for Budget Responsibility was forced to revise downwards its growth forecast for the next two years. Unemployment is more than 2.5 million, a 17-year high, and is rising rapidly, and again the OBR has had to raise its forecast. The Chancellor must know in his heart of hearts that it is simply not possible to reduce the deficit while the economy is shrinking, tax revenues are falling and the number of unemployed people is rising.

Angie Bray: Will the hon. Lady give way?

Kerry McCarthy: I am afraid I do not have time, as I want others to be able to speak.

Instead of listening to the mounting evidence that the plan is not working and preparing a fiscal plan B, the Chancellor is not for turning. He has stuck to his plan of cutting too far and too fast, and instead of a plan for growth that would create jobs, he has gone back to the failed Thatcherite ideology of the ’80s—that by simply removing regulations and lowering taxes, the private sector will rush in and save the day.

I welcome the announcement of a local enterprise zone for Bristol, of course—this Government have so little to offer us that we have to grab what we are given—but how long will it be before we see the benefits of such a move, and how will we ensure that this does not simply displace investment from other areas that need it just as much? The Work Foundation says that up to four fifths of the jobs created by enterprise zones in the 1980s were merely shifted from other areas. It also says the cost of creating such jobs was in today’s money £26,000 per person. We should compare that with the £6,500 cost per job created under the future jobs fund, which, as I recall, not very long ago the Conservatives were decrying as a waste of public money.

With the regional development agency axed, where is the strategic overview for the wider city region of Bristol to come from? Where are the sources of match funding? Where is the focus on, or funding for, our infrastructure needs? On infrastructure, may I once again make a plea

28 Mar 2011 : Column 132

for an integrated transport authority for the Bristol area, as that is badly needed? On housing, I agree with the National Housing Federation, whose representative said:

“Removing regional spatial strategies, without putting anything in their place, was a short-term mistake”.

The NHF has estimated that local authorities have already scrapped plans for more than 200,000 homes as a result of that, and that there may be no new social homes built until 2015. In Bristol alone, 9,600 planned homes were scrapped by the city council. Shelter says that only 39% of housing need is met in Bristol. Last year, about 10,500 people were on the waiting list for social housing, and with transfers included, the number was as high as 15,000, but only a few thousand people a year are being rehoused. There is a clear need for a strategic level of planning to ensure that local need is met.

The Government now promise a presumption in favour of sustainable development in the planning system, but neither that nor the promised national planning framework were set down in the Localism Bill, and that presumption would appear to be at odds with the Localism Bill itself, which gives nimby power to small sections of a community to block developments in a local area. It is therefore unclear whether or not local people have been given more say over planning decisions in their area.

I welcome the Budget’s proposal to speed up major planning decisions. Developers in Bristol have in the past complained to me that it takes a long time—years sometimes—to get approval for their big projects and that it is simply not financially viable to hang on in there and wait. I accept that the planning authorities do need a rocket put under them, but that must not lead to decisions being railroaded through without local people being given a proper say.

The second challenge the Chancellor faced in his Budget was to deliver help for ordinary people, and again he comprehensively failed. The economic crisis began in the financial sector, but ordinary working families are paying the highest price for it. The cost of living is now rising by over 5% per year on the retail price index measure. That is in no small part due to the Government’s decision to raise VAT. Meanwhile, average wages grow at just 2.3%.

At the same time, cuts to services are also affecting the quality of life of ordinary people. Councils are grappling with cuts to their formula grant of 28% over four years. The Communities Secretary said that councils should be able to find efficiency savings rather than make front-line cuts, and the Deputy Prime Minister said that

“they shouldn’t immediately start issuing redundancy notices for savings that they can phase in over four years”,

but the Local Government Association believes councils will make 140,000 redundancies next year across the UK, and the Liberal Democrat-controlled Bristol city council is making 340 people redundant next year alone, and it is reported that 600 jobs are now under review. The Communities Secretary told councillors last year:

“You are now in charge of something like £38 billion every year, no strings attached.”

He also said that they were back

“in charge of the decisions which matter”,

28 Mar 2011 : Column 133

but in fact the only decision that councillors are now empowered to make is the decision to slash services on which local people rely.

The Chancellor could have chosen to implement a real strategy for growth by keeping people in work, building homes and infrastructure, and investing in businesses and industry. Instead he is cutting too far, too fast, and his Government have removed the strategic mechanisms for delivering the investment we think is needed. Even staying within his fiscal plans he could have chosen to put a greater share of the tax burden on the banks by reintroducing the bankers bonus tax. That money could have been used to create jobs and homes, as we suggested. He could have chosen to smooth the cuts to local authority budgets and protect the most vulnerable groups from sudden front-line reductions, rather than front-loading the cuts. The Chancellor is not listening. I predict that in time he will wish that he had.

9.31 pm

Andrew Bridgen (North West Leicestershire) (Con): I welcome this Budget as the first step in a much overdue reform of our economy and our tax system. It is not a sustainable position to expect the private sector, at 50% of the economy, to support itself and the other 50%, which is the public sector. The rebalancing of our economy is not a nice optional extra or a Government whim: it is absolutely essential to our country’s current and future economic survival in an increasingly competitive world. It will be by promoting enterprise that we grow our way out of the disastrous position left behind by the last Labour Government and their debt-fuelled economic model, which has been proven to be totally unsustainable. They borrowed even in the boom years of 1997 to 2004, when the national debt rose by an eye-watering £74.9 billion.

I welcome the announcement of the extra 1% cut in corporation tax to 26% this year, making it the lowest corporation tax rate in the G7, which is accompanied by commitments to reduce corporation tax further in future years. That positive move will let international businesses know that Britain is truly open for business. In addition, there are many signposts that if someone is prepared to take risks to generate wealth and pay taxes, the rewards will be worth while. The doubling of the size of the entrepreneur’s relief, for instance, ensures that if someone creates wealth and employment, they will not be overly punished by the taxman when they exit their business.

Other measures taken in this Budget are a welcome start on the road to regulatory reform and will be of encouragement to employers in my constituency and across the country, especially those with fewer than 10 employees—90% of the businesses in this country fall into that category. The announcements on incentives for charitable giving and the rise in personal allowances should be welcomed and supported by Members on both sides of the House.

I also welcome the announcement that the 50p tax rate is to be reviewed by Her Majesty’s Revenue and Customs, and the revenue raised from the new rate calculated. I have written at length about the damage the measure has done to our economy. Hon. Members will recall that when Nigel Lawson cut the top rate of tax from 60p to 40p in 1988, the tax take rose and the top earners actually paid a larger share of it. When the

28 Mar 2011 : Column 134

Treasury recently decided to set the rate of capital gains tax at 28%, it stated that studies it had conducted concluded that this was the rate that maximised the tax take. If that is correct and the optimum rate for unearned income is about 28%, it is very unlikely that the optimum top rate of income tax should be nearly double that level. I look forward to the report in due course.

On a personal basis, on behalf of North West Leicestershire, I very much welcome the news that the per plane tax plan is to be dropped. East Midlands airport is in my constituency and the jobs dependent on both the airport and air distribution are a significant part of my district’s economy and employment base. There is nothing more international than air transport and if we had acted alone with the per plane tax, those jobs would have been threatened. Cuts in fuel duty are also particularly welcome for North West Leicestershire, as one in three of our private sector jobs are either in distribution or distribution-related.

I believe the Budget will act as a signpost that the Government will take action to reform our taxation system and our economy. Labour left our economy in a totally unsustainable state—imbalanced in so many ways, whether that meant the proportion of the economy made up by the public sector, our decline in manufacturing or our reliance, or over-reliance, on financial services and housing bubbles. There is no doubt that Labour’s economic model was and still is unsustainable. The attitude of the Opposition to the record deficit they bequeathed the coalition Government is both startling and opportunistic. In opposing all the coalition Government’s saving reductions but still claiming to be in favour of deficit reduction, they are failing to act in their duty of being a credible Opposition on this topic.

This is a good Budget for growth, a good Budget for jobs and a good Budget for North West Leicestershire, and I support it enthusiastically.

9.36 pm

Sheila Gilmore (Edinburgh East) (Lab): A very interesting thing happened in my city in 2009. For the first time since the 1960s, the number of affordable rented homes built exceeded the number of private homes—55% of all new build was affordable rented homes, subsidised by public spending. That subsidy helped the private builders who otherwise would have had to shut up shop for a while—as many have had to do—and meant that some at least could stay in work, and that gave work to the skilled work force who would otherwise be sitting at home watching daytime television because there was no work. When those people are at work they are contributing to our economy and paying taxes—[ Interruption. ] I do not know why that is so funny for people who want to reduce the deficit, because if people are paying taxes in, that is far better than their simply taking benefits out.

That was a good thing. It showed the weakness of the private sector, however, that it was affordable rented homes that had to be built in the numbers to keep some people in work. I look out from my constituency office at a regeneration scheme that has stalled because the private sector is not leaping in to build new homes and to bring offices or any other kind of business into the area. I look out on land. There is no shortage of land, but there is a shortage of investment to make all this development happen. We ought to invest in housing

28 Mar 2011 : Column 135

and build a real shared equity scheme, rather than providing a meagre amount of money that will be available for only one year, as we learn if we read the detail. The scheme is not sustainable: for one year there will be £250 million.

Shared equity has certainly helped to keep the house market going in my city—it is very important—but it needs subsidy. What is wrong is the constant juxtaposition of the private and public sector as though they are at war. In fact, the two are constantly interrelated.

George Freeman: Will the hon. Lady give way?

Sheila Gilmore: No, I will not.

The private and public sectors are constantly interrelated, because public sector stimulus has kept the economy going since the recession began.

History has been rewritten, and I find it deeply perplexing and upsetting that the Liberals have been prepared to be complicit in that. I am not surprised that the hon. Member for Colchester (Bob Russell) took us along the byways of Colchester becoming a city, because it was a diversionary tactic. He did not want to talk about his party’s real economic policy. It reminded me of when I was working from home—suddenly, cleaning the kitchen became quite attractive because I could not settle down to do the work that required a bit more effort. That is what is happening with a party that went into the election telling people that it would be downright dangerous to cut public spending too quickly. That is not just some sort of Labour notion, as the Conservatives seem to think. It was the policy of two of the parties that went into the election and that, together, won a majority of public support. It is not true that the public supported the financial disaster that the Conservatives are now wishing on us.

I said in a previous finance debate that the proof would be in the outcomes and that if the Conservative party was right and economic growth was driven by their policies, I would concede that, but so far we are seeing nothing of the sort. Our position would not be too far, too fast—

Mr Speaker: Order.

9.40 pm

Chris Leslie (Nottingham East) (Lab/Co-op): My hon. Friend the Member for Edinburgh East (Sheila Gilmore) was making her point so well, and I commend her analysis of this Budget, as well as those of my hon. Friend the Member for Coventry South (Mr Cunningham), my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) and my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger), for Newcastle upon Tyne Central (Chi Onwurah) and for Telford (David Wright), among others. They all made the point that it is a no-growth Budget that is hurting many people and that certainly will not help our economy in the years ahead.

We do not have to look far to see the cracks emerging. Setting aside the scepticism that some might have had about the Office for Budget Responsibility, a cursory flick through its detailed analysis shows that the Budget

28 Mar 2011 : Column 136

has had a dilatory effect on our economy. The first line of chapter 3 on page 31 of its report cites a squeeze on household disposable incomes in the coming months weakening consumer spending growth. The OBR states on the same page that

“we have revised down our central forecast for economic growth in 2011 from 2.1 per cent to 1.7 per cent.”,

as my hon. Friend the Member for Southampton, Test (Dr Whitehead) has pointed out. Page 53 of the report says that real household incomes will “fall further in 2011”, and page 54 states:

“We have revised down our forecast for consumption growth…from 1.3 per cent to 0.6 per cent”.

Page 62 tells us that the medium-term forecast for exports needs to be revised downwards and page 72 states:

“We expect unemployment to rise over the next few quarters,”

with unemployment 80,000 higher in 2012. On page 75, the OBR downgrades forecasts for average earnings and output growth and on page 76 it tells us that aggregate wages and salaries will be

“around 1 per cent lower by 2015-16 than expected”—

and on and on it goes.

Economic growth matters, but that simple fact is lost on the Chancellor. I asked the Library about the cost to the Exchequer of that infamous quarter 4 reduction in economic growth in the last few months of 2010 when the economy shrank by 0.6%. It estimated that that reduction has caused a £3 billion reduction in Treasury revenues—£3 billion that might have been anticipated in revenue if performance in quarter 4 had been anything like that in quarter 3. That significant sum would have been enough to offset the need for the freeze in child benefit or the cuts in capital allowances for business investment that the Chancellor announced.

There is a symmetrical irony in that the OBR says, on page 125 of the report, that an

“increase in the claimant count”

will lead to “higher benefit payments” in 2012-13. As my hon. Friends the Members for Bishop Auckland (Helen Goodman) and for Glasgow North East (Mr Bain) have pointed out, the OBR has forecast an increase in social security costs of

“approximately £3 billion per year from 2012-13 onwards”.

When economic growth is driven down and unemployment is increased, those costs and the deficit are both going to be increased, as the eminent economist Paul Krugman has pointed out this week. This obsession with deficit reduction to the exclusion of all else—this fetishism—is a very narrow view of the world and ignores the impact that the Government’s belligerent strategy is having on the real economy.

The other document that was published with the Budget, “The Plan for Growth”, has also failed to convince anyone that the Government understand the importance of the real economy. The OBR’s reaction to the policy measures, when it had totted up all the Chancellor’s announcements, was that

“we do not believe there is strong enough evidence to raise our trend growth assumption”.

That is its response to the measures in the growth plan. As my hon. Friend the Member for Scunthorpe (Nic Dakin) so eloquently put it, the Government have taken a

28 Mar 2011 : Column 137

machete to growth—that is exactly what has happened. Their growth plan is riddled with confusion, fudge and contradictions.

Enterprise zones sound interesting at face value, but when they were tried in the 1980s they took jobs from surrounding areas. My hon. Friends the Members for Blyth Valley (Mr Campbell) and for Oldham East and Saddleworth (Debbie Abrahams) tried to be as optimistic as they could when looking at those enterprise zones, but we have seen that the Government give with one hand and take away so much more with the other. Any improvements to capital allowances on the margins are taken away by a factor of 10, with the cuts in capital allowances of £5 billion announced for the next five years.

There are in the growth plan allusions to weakening employee rights, as though that is the avenue we have to go down to boost growth. There is an allusion to clarity on the national minimum wage. We will have to see where that goes. There is opposition to improvements in maternity and paternity rights—typical Tory fare. There are some interesting vignettes on legal reforms that the Government want to make. For example, injured parties will have to deduct their legal costs from their compensation, instead of those costs falling on the negligent party. The Government want fewer food safety inspections at takeaways, as some hon. Members mentioned this evening.

There are references to abolishing money-laundering regulations and reducing corporate accounting, but hold the front page! Many people may not have got as far as page 121, where the Government say—this is absolutely serious—that they will review the Outer Space Act 1986. Presumably they will give us a clue what planet they are living on. One assumes it is planet Redwood, but who knows?

As we can see from the discussion that we have had today, the cuts have been significant and they are having an effect on the real economy. We can see that the unprecedented reductions in local government expenditure will harm local economies. My hon. Friend the Member for Sheffield South East (Mr Betts) mentioned that 737 jobs are being lost in Sheffield alone. The Government are facing both ways when it comes to local government reform. The set of proposals in the Localism Bill is hardly deregulatory, with 142 order-making powers. The Government are facing both ways on business rates. They promise local freedoms to councillors, but when businesses object, they say, “We will have national certainty when it comes to business rates.”

There is a looming crisis in residential housing and property finance. On planning policy, as my hon. Friend the Member for Sheffield South East said, so much for localism, when the Government’s clear expectation is

“that the default answer to development is ‘yes’”.

We will see how far localism goes in each of the constituencies of those on the Government Benches.

My hon. Friend the Member for Bristol East (Kerry McCarthy) pointed out that although the planning process needs to be speeded up, the supposed guarantee of a 12-month closure, including the appeal, is incongruent with the 35% cut in the planning inspectorate’s budget—35%. We will see whether the Government can live up to that guarantee. They are abolishing the Infrastructure Planning Commission, but they will have to recreate a major infrastructure planning unit within the planning

28 Mar 2011 : Column 138

inspectorate. They say they will get rid of top-down guidance, but the growth plan refers to five new national guidelines.

It must be recognised that there are significant problems with the Budget, one of which is the risk of a lost generation of young people. Youth unemployment is up 30,000 in the first quarter of this year to just under 1 million claimants between the ages of 16 and 24, the highest since comparable records began in 1992. We know that in the 1980s—the Secretary of State for Communities and Local Government has joined us as a shibboleth for that era—the Government neglected the risk of unemployment. We know the story.

Now, again, a younger generation is forgotten by the Government. Young people are losing their education maintenance allowances, their tuition fees are being trebled to £9,000 per year if they go to university, and opportunities to get into work or on to the career ladder will be rare. There is insufficient emphasis in the Budget on work experience and apprenticeships. The Government should have repeated the bank bonus levy that we implemented last year to raise resources to target job creation, but no; instead, they have scrapped the guarantee of apprenticeship places for 16 to 18-year-olds—a massive backward step.

What hope do young people have of getting on the housing ladder with the rather puny Firstbuy scheme, which Shelter says will help less than 1% of first-time buyers? As my hon. Friend the Member for Sheffield South East mentioned, there is a 50% cut in the new social homes construction budget. On top of that there are cuts to housing benefit. Even on pensions, young people are penalised should they dare to want to save for the long term. The Government assume that they can get away with pulling the rug from under young people, perhaps because they do not vote, but the mood is changing across the country. There is a profound sense of unfairness in cutting young people adrift. It is foolish economics to consign a generation to poorer prospects and less prosperity than their parents enjoyed. The Budget’s adverse impact on young people will penalise and alienate those in their teens and 20s. It is a catastrophe in the making, and the Chancellor will rue the day he neglected the younger generation.

9.50 pm

The Financial Secretary to the Treasury (Mr Mark Hoban): We knew that the Labour party was in denial about the deficit and the difficult decisions that the country has had to take as a consequence of its legacy, but every one of the 16 speeches we heard from Opposition Members today reiterated that same denial. They claim that 250,000 people were out at the weekend to find an alternative, but there is clearly no alternative from those on the Opposition Benches. In speech after speech, Labour Members denied the reality of the economic situation they left the country. They have forgotten that when they were in Government the manufacturing sector halved in size while financial engineering replaced real engineering, and that our share of world trade fell as we failed to take advantage of growth in the global economy. The gap between the north and the south grew on their watch, and under their stewardship red tape, whether regulation or the length of the tax code, ballooned, acting as a dead weight on business. Their legacy to this country is an economy that needs reform if we are to

28 Mar 2011 : Column 139

have stable and sustainable growth, if every part of this nation is to prosper and if we are to compete with the best in the world. That is the agenda of reform that we set out in the Budget last week.

We want the UK to become the best place in Europe to start, finance and grow a business, but in the past decade alone countries such as Germany, Denmark and Finland have overtaken us in international rankings for competitiveness. In our plan for growth we have therefore taken action to abolish £350 million-worth of specific regulations, to implement in full Lord Young’s recommendations on health and safety laws and to impose a moratorium, exempting businesses employing fewer than 10 people and all genuine start-ups from new domestic regulations for the next 10 years. These measures were welcomed by my hon. Friends the Members for Aberconwy (Guto Bebb), for Mid Dorset and North Poole (Annette Brooke) and for City of Chester (Stephen Mosley). No longer will British business be tied down by wasteful red tape.

We are going to tackle what every Government have identified as a chronic obstacle to economic growth in Britain but have never done anything about: the planning system. Councils are spending 13% more in real terms on planning permissions than they did five years ago, despite the fact that applications have fallen by a third. Yes, communities should have a greater say in planning, but as a result of the Budget we will expect all bodies involved in planning to put jobs and growth first, and we will introduce a new presumption in favour of sustainable development so that the default answer to development is yes.

We will protect the greenbelt, but we will also remove the nationally imposed targets on the use of previously developed land. We will streamline the planning process. I welcome the support from the hon. Member for Bristol East (Kerry McCarthy), who wants to stop applications being bogged down for years, which I think will free up the economy. I am pleased that there is at least one measure in the Budget that Labour Front Benchers will support. No longer will cumbersome planning rules and bad regulation stand in the way of job creation up and down this country.

There has been a lot of talk about enterprise zones. The hon. Member for Nottingham East (Chris Leslie) was dismissive of them, so I think that he should speak to his friends the hon. Members for Blyth Valley (Mr Campbell), for Telford (David Wright) and for Coventry South (Mr Cunningham), who all want to see enterprise zones in their constituencies because they want to see the benefit that will flow as a result. We have already announced four new enterprise zones: Mersey Waters in Liverpool; the Royal docks in Newham; Manchester city airport, which was welcomed by the right hon. Member for Wythenshawe and Sale East (Paul Goggins); and the Boots campus in Nottingham. There are 17 more to follow. The only Member who did not call for an enterprise zone in his constituency was my hon. Friend the Member for Colchester (Bob Russell), who went one further and called for Colchester to become a city. I do not know whether city status will offer the same benefit as enterprise zones, but I wish him well in that bid.

28 Mar 2011 : Column 140

There was some discussion among Opposition Members about the problems of youth unemployment. We know that under the previous Government youth unemployment increased. Let me remind the House what the Chancellor announced in the Budget last week: 80,000 additional work experience placements and a doubling of the number of university technology colleges from 12 to 24. He announced 50,000 additional apprenticeships, taking the number introduced by this Government to 250,000 in total, compared with the plans left us by the previous Government.

We also need to make sure that we have a competitive tax system. Britain used to have the third lowest corporate tax rate in Europe; now we have the sixth highest. At the same time, our tax code has become so complex that it has overtaken India’s to become the longest in the world. As my hon. Friends the Members for Mid Sussex (Nicholas Soames) and for Wolverhampton South West (Paul Uppal) said, we have to address that issue.

Our taxes should be efficient and support growth, be fair and predictable, simple to understand and easy to comply with. That is why from April the corporation tax rate will be reduced not just by 1 percentage point as we announced last June, but by 2 percentage points, and by 1 percentage point for each of the next three years, taking our rate down to 23%—16 percentage points lower than in America, 11 lower than in France and 7 lower than in Germany, giving us the lowest corporation tax rate in the G7.

A competitive tax system is not just about lower rates, however; it is also about the way in which we make tax policy and cut the cost of compliance. That is why last July we set up the Office of Tax Simplification to give advice on how to reduce the complexity of the tax system; and that is why we are going to reduce no fewer than 43 complex reliefs, from Black Beer to Angostura Bitters and late-night taxis to luncheon vouchers. We are ridding the tax system of unnecessary legislation and taking out 100 pages from our tax code, which is a good step towards creating a simpler tax system and reducing the cost of compliance for small businesses.

We need to go further, however. For decades, we have operated separate systems for income tax and for national insurance, with two completely different systems of administration and two different periods and bases of charge. That imposes unnecessary costs on our country’s employers, and that is why this Government will consult on merging the operation of national insurance and income tax to create a simpler, more competitive and more stable tax system that is an asset to our economy.

Several hon. Friends talked about the importance of small businesses having access to finance, and we should not ignore the problems that businesses face in that regard. Small businesses in particular have been innocent victims of the credit crunch. They have seen the flow of affordable credit dry up, their overdrafts squeezed and lending conditions deteriorate. That is why we have agreed with the nation’s banks a 15% increase in the availability of credit to small businesses.

But that is not the end of the story. As my hon. Friends the Members for Stratford-on-Avon (Nadhim Zahawi) and for South Northamptonshire (Andrea Leadsom) said, we need tax incentives to encourage entrepreneurial activity, and that is why it was good to see Sir Ronald Cohen and a number of venture capitalists and business angels praise the measures we announced

28 Mar 2011 : Column 141

in the Budget last week to double the size of entrepreneurs relief to £10 million and to increase income tax relief to 30%. That is how we will provide finance to the nation’s small businesses in order to help them to grow and create the jobs that we will need in the future; and that will help Britain to become the best place in Europe to start, grow and finance a business.

The issue is not just about financing start-ups and smaller businesses. We are pleased that the banks have agreed to increase the size of business growth funds to £2.5 billion, and to provide more equity investments for small and medium-sized businesses that want to grow and become the best in the world.

This Government are looking to right the wrongs of the past. We are going to reverse the trend of the past decade, a decade that saw manufacturing shrink, businesses tied down by red tape imposed by the previous Labour Government, the south grow faster than the north and growth balanced precariously on a mountain of debt. We will not repeat the mistakes of the previous Labour Government. We want to see growth built on firm foundations, with reforms that make our country more competitive and more business-friendly, with an economy exploiting new opportunities in the manufacturing, life sciences, digital and creative industries.

That is why the Budget has been greeted with acclaim throughout the country by business organisations that recognise the measures we have taken. That is why the strategy that my right hon. Friend the Chancellor set out, of tackling the deficit, has been supported by the OECD, the International Monetary Fund, the European Union, the CBI, the Institute of Directors, the Bank of England and 35 business leaders who wrote in support of our plans at the time of the spending review last year. Who can the Opposition claim in support of their plans? The Guardian. Is it not typical that, when this country needs far-reaching economic reform, the only answer that the Labour party has is a policy, which it knows is illegal, to cut the VAT rate on petrol?

We have set out measures to ensure that we tackle the mistakes of the past, that build a more dynamic, prosperous and sustainable economy that this country—

10 pm

The debate stood adjourned (Standing Order No. 9(3)).

Ordered, That the debate be resumed tomorrow.

28 Mar 2011 : Column 142

Business without Debate

Private Members’ Bills

Motion made,

That, notwithstanding the provisions of Standing Order No. 14(4), Private Members’ Bills shall have precedence over Government business on 9 September 2011, 21 October 2011, 25 November 2011 and 20 January 2012.—(Mr Alistair Carmichael.)

Mr Speaker: As there is an amendment not supported by the Member in charge, I will follow the practice of my predecessors and treat it as an objection to the motion. Objection taken.

Human Rights (Joint Committee)


That Mrs Eleanor Laing be discharged from the Joint Committee on Human Rights and Rehman Chishti be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)


Bus Services (Hartlepool)

10 pm

Mr Iain Wright (Hartlepool) (Lab): I rise to present a petition on behalf of my constituents who are concerned about the loss of bus services, particularly evening bus services and those on socially vital routes.

The petition states:

The Petition of residents of the borough of Hartlepool,

Declares that the petitioners are concerned that residents in areas of the borough such as The Headland and Burbank, as well as villagers in Dalton Piercy, Elwick and Greatham, have been left isolated and without transport following the decision of Hartlepool Borough council to cut public subsidy to private bus companies.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Transport to work with the Secretary of State for Communities and Local Government, residents of the borough, Hartlepool Borough Council and bus operators immediately to reinstate the services and then to secure a financial settlement and a regulatory framework which provides a comprehensive, reliable and cheap system of bus transport in Hartlepool, designed to address the social and economic needs of passengers in both the urban and rural areas of the borough, rather than the narrow interests of private bus companies.

And the Petitioners remain, etc.


28 Mar 2011 : Column 143

Sustainable Communities Act

Motion made, and Question proposed, That this House do now adjourn.—(Mr Alistair Carmichael.)

10.2 pm

Caroline Lucas (Brighton, Pavilion) (Green): I should like to thank hon. Members remaining in the House for their interest in the Sustainable Communities Act 2007. I will begin by explaining why the Act is so important. A successful first round of proposals has been made under the Act, but delays with implementing the 2010 amendment to it are creating unacceptable delays for future proposals, and I want to focus on that as well.

The Act is important essentially because, in so many ways, our communities are unsustainable. In the past decade, Britain has lost a quarter of all its post offices, a quarter of all its independent newsagents and a fifth of all its bank branches. In my constituency, thankfully, there is still a thriving local economy with local traders and businesses fighting off incursions on to the high street by the big chain stores and supermarkets, but we are unusual in being successful thus far, and there are certainly many battles still ahead. In particular, we need more powers to restrict the number of large chain stores that pose a threat to the unique character of our city of Brighton—for example, powers to stop the expansion of supermarkets given that we already have about 56 major ones.

Our city is home to about 10,000 small and medium-sized enterprises, which form the backbone of our economy as well as being a major element in Brighton’s attractiveness to holidaymakers in terms of the services that they provide, such as bars and clubs, and the retail experience that they create. In fact, the city remains home to the largest concentration of independent traders on the south coast. Of course, we also have the well-established reputation of Brighton’s leisure and tourism industry, which attracts more than 8 million visitors a year and has remained a large source of employment in Brighton and Hove despite the recession.

As I said, however, we are bucking the trend, and the relentless march of the high street clones is taking its toll, as are the prevalence of out-of-town shopping centres, the push to run public services such as our post offices for private profit, and the legacy of gaping social inequality. Increasingly, there are signs of disengagement from the political system. Evidence such as the POWER inquiry shows that people want to be engaged and to get involved, but that they do not bother because they perceive that they cannot really change anything.

The Sustainable Communities Act 2007 aims to reverse those interconnected problems. It recognises that community decline is an ongoing national problem. Evidence such as the New Economics Foundation’s “Ghost Town Britain” research demonstrates that and shows that it will get worse if nothing is done. The best efforts of local citizens and communities are not enough to reverse this overwhelming national trend. The Prime Minister has placed enormous faith in what he calls the big society, but without adequate resources it is unreasonable to expect that people will have the capacity, skills, time and wherewithal either to plug the gap left by cuts to public services or to provide the intensive input required to facilitate genuine community development. Of course, we all know of inspiring individuals who make a difference

28 Mar 2011 : Column 144

in their neighbourhoods and of projects that turn lives around, but that is not the same as the kind of infrastructure that allows for long-term, community-controlled sustainable engagement in the transformation of our society.

Government should help and Government can help, but communities are the experts on local problems and the solutions to them. The actions that Government take to help them should therefore be decided by communities, not by those in Westminster and Whitehall. A mechanism is needed whereby local people can drive Government action to reverse community decline and create local sustainability. The 2007 Act creates precisely that mechanism and enshrines it in statute. Putting local people in the driving seat is a crucial aspect of the Act. For the first time, it sets up in law a bottom-up process. Communities and councils are invited to make proposals for Government action to reverse community decline and promote local sustainability. Central Government then have a duty not only to consult, but to co-operate and reach agreement with an independent selector body on which of the proposals will be implemented.

The Act became law in 2007 as a result of a long and widespread grass-roots mobilisation campaign organised by Local Works, a coalition of more than 120 national organisations. The campaign inspired tens of thousands of citizens to urge their MPs to back the Sustainable Communities Bill. It struck a chord with communities who were fed up with seeing the decline of the places where they lived and worked, but who felt powerless to do anything about it.

I spoke at a large public meeting in Brighton in 2004, when the Bill had only just entered Parliament. Local Works organised more than 100 such constituency public meetings across the country. The turnout stunned MPs. The meetings drew average crowds of 250 people, with some attracting as many as 300 or 500 members of the public. In 2006, another huge meeting was held in Brighton, to which more than 250 people came to urge the city’s three MPs of the time formally to back the Bill in Parliament. A year later, when the Bill was in its final parliamentary stages, London’s Green MEP, Jean Lambert, spoke before 1,000 people at a public meeting that the campaign had organised in Westminster. I give these examples because they give a clear sense of the level of public support for this campaign and this Act.

The Green party was the first political party to back the Bill formally, and the campaign continued to call for cross-party support. That was eventually achieved and the Act became law in 2007 with the support of all parties across the House. In early 2010, Local Works successfully campaigned for the Sustainable Communities Act 2007 (Amendment) Act 2010. The 2010 Act ensured that the process would be ongoing, and allowed parish and town councils to submit proposals to central Government directly.

It is important to look back to see what has happened since. Have the opportunities promised by this groundbreaking legislation been realised? Back in October 2008, the Government of the day launched the first invitation for proposals under the 2007 Act. Local Works held many more public meetings across the country, where communities lobbied their councillors to resolve to use the Act. A hundred local authorities responded. Together with their communities, they drew up 300 proposals for Government action and submitted them to the Local Government Association, in the role of selector, by 31 July 2009.

28 Mar 2011 : Column 145

The proposals were wide ranging and included measures to protect local post offices, shops and trade, and pubs; measures to increase the production and sale of local food; measures to promote local renewable energy, microgeneration and energy efficiency; measures to protect local public services; and measures to increase democratic participation.

The people of Brighton and Hove successfully urged the council to opt into the Act, and then many got involved in coming up with the proposals that would help the area become a more sustainable place. Of those proposals, eight were shortlisted by the LGA. Examples include allowing food grown in allotments to be sold locally, introducing feed-in tariffs for local renewable energy and empowering councils to have more flexible business rates to encourage local trade and jobs.

The LGA’s selector panel shortlisted 199 proposals in total and submitted them to the Government in January 2010. On 15 December 2010, the Government announced that they had reached agreement with the LGA’s selector panel on all the shortlisted proposals, and they published the results. Some proposals were to be implemented and some were rejected, with reasons given, while others were compromised on or deemed unnecessary because powers already existed.

I am pleased that as a result of that process, the Government will make it easier to introduce renewable energy schemes by bringing in permitted development rights for small-scale renewable and microgenerational energy. They have also agreed to legislate to establish a community right of purchase, which will allow communities to bid to take over local assets. A moratorium on the sale of listed assets will give community groups time to prepare a bid. The planning rules are due to be amended to exclude gardens from the classification of “previously developed land”, and the Government have backed community calls for a ban on the sale of alcohol below cost price, preventing supermarkets from selling alcohol below a certain price floor.

Those are positive outcomes, with local communities having a direct say in shaping their futures. But what happens next? The Government have set up a barrier-busting website as the portal for submitting future proposals under the Act. They have also invited community groups and councils to submit proposals directly through the website. Local Works has welcomed that, and I do too. However, the 2010 Act requires that the Government introduce regulations that will govern the process of making proposals and deciding on them in future. The consultation that they must run before finalising those regulations has not yet been published.

Following repeated requests for information, officials at the Department for Communities and Local Government initially advised that the consultation would be published in the summer of last year. Since then the date has been continually revised, first to the end of 2010, then to the end of January 2011 and then to before the mid-term recess in February, and now we are not being given any time frame at all. Parliamentary questions tabled by the hon. Member for Gower (Martin Caton) and me asking when it would be published both met with similar responses, stating that it would be soon and that a statement would be made “shortly”.

Community groups and organisations, councillors and officers who want to get involved in the Act are now all asking what on earth is going on. To them, this

28 Mar 2011 : Column 146

looks like deliberate stalling by the Government. I have to say, I am minded to agree. The fact that the early-day motion on the subject currently has the second highest number of signatures, with 236 hon. Members supporting it, suggests that people in the House are also very concerned about the future of the Act. That is true not just of people here in the House but many people outside, too. I shall give just a sample of what is being said.

Ruth Bond, chair of the women’s institute, has stated:

“The Women’s Institute is looking forward to encouraging our members and others in our communities to be involved in the Sustainable Communities Act and to use it to help and protect the vibrancy of our villages and towns. However, the delay in the consultation on the future regulations for the Act is holding us all back. This delay has been ongoing since early January this year and still we have no date for when the consultation will be published. We therefore hope the government will make an announcement urgently.”

John Walker, the national chairman of the Federation of Small Businesses, has made a similar point, stating:

“We are looking forward to seeing the consultation on the new Sustainable Communities Act regulations. The long delay in seeing this consultation has been frustrating as it is holding back our members and branches on the ground from engaging in the Act to help keep trade local and promote and protect local businesses and jobs in their communities.”

I have a whole stack of further quotations from many organisations, including the Campaign for Real Ale, Age UK, Sustrans, the Public and Commercial Services Union, the Woodland Trust and others. All of them make the very same point—that extensive delay to the consultation is extremely frustrating and, worse, risks local people becoming disillusioned with the whole process.

The Sustainable Communities Act has enormous potential, and its emphasis on community control and empowerment should surely be in keeping with the Government’s professed support for localism. I therefore hope very much that the Minister can tell my constituents, me and the many others who are still waiting to hear about why progress has stalled, what his plans are to get it back on track and when we can look forward to action. I hope he will also take this opportunity to reiterate his full support for the Act and its processes.

10.14 pm

The Minister of State, Department for Communities and Local Government (Greg Clark): I warmly congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this debate. I am happy to give her my full commitment to the Sustainable Communities Act 2007, which is one of the most important Acts that this House has passed. The fact that it was passed with cross-party support underlines its continuing significance to how we govern ourselves in future.

For my money, the Act is one of the most important Acts of the past decade, because it contains, as the hon. Lady knows, two important principles: first, that communities should have the right to know what is done by public bodies in their area on their behalf; and secondly, that communities, armed with that information, have the right to suggest alternative, better ways that might enable them to thrive, as she described. The Act is a seminal piece of legislation, and I congratulate our predecessors who campaigned long and hard for it, and the coalition led by Local Works, which did so much in the community.

28 Mar 2011 : Column 147

The hon. Lady describes her long association with the campaign. When I was selected as a parliamentary candidate in 2004 and first went canvassing on the doorstep, almost the first question I was asked—from Mr Philip Clarkson Webb, a constituent whom I have come to know—was whether, if elected, I would support the Sustainable Communities Bill. I told him that I did not know but that I would find out, and it is a thrill to speak at the Dispatch Box now in support of the Act.

I hope to reassure the hon. Lady on some of her points. The Act is seminal in other ways, because of its impact on other legislation. Its principles of dialogue, collaboration, and genuine, bottom-up democracy are a recurring theme in the coalition agreement, and unite both parties to the coalition. Those principles wholly permeate, and to a significant degree have inspired, the Localism Bill, to which she drew attention, which completed its Committee stage earlier this month.

The principles of dialogue, collaboration and bottom-up democracy also underpin our consultation on the new regulations to govern the Act’s implementation. I can tell the hon. Lady that we will launch that consultation tomorrow. I also welcome the opportunity of informing her and the House of how we intend to proceed. First, we are keeping the essential character of the previous approach, but trying to make it more streamlined and effective, and easier for communities to take up. The Act is about inspiring ideas from local communities and engaging with them in open, honest dialogue; it is not just for councils. It is not about councils saying to their communities, “We want to do this, do you agree?” but rather about councils asking their communities, “How would you like us to improve our area?”

As the hon. Lady said, the Communities and Local Government Secretary invited councils to begin that process on 15 December 2010, which was the second invitation under the Act. The first invitation was made back in 2008, which generated a range of ideas from around the country on how best to put power where it belongs, and how to put control into the hands of local people.

Many of those ideas—getting rid of the regional spatial strategies and giving local councils much more discretion on spending public money—were reflected in the actions that the Government took in our first months in office. The hon. Lady mentioned three examples from Brighton, which as one would expect contributed some of the more lively, ambitious and creative proposals. There was a recommendation to introduce feed-in tariffs, for which she and many constituents in Brighton have campaigned for many years, and now we have them, and it is possible to introduce business rate discounts under the Localism Bill. We looked very carefully at the possibility of allotments selling surplus food, and we have clarified—I hope to her constituents’ satisfaction—that those powers exist. If she finds any frustrations in exercising them, she has only to come to me, and we will make sure that anyone who doubts them is told what the reality is. I want the second invitation under the Act to be even more successful in provoking local debate, energy and imagination. It is a good opportunity to reinvigorate local democratic discussion between councils, community representatives and individual members of communities, and to bring forward great ideas and translate them into practice wherever possible.

28 Mar 2011 : Column 148

I have always been clear that the best ideas are not to be found cooked up by Ministers and officials in Whitehall. They come from people in communities who have practical ambitions to make their communities better than they could otherwise be. One of the great things about the Act is that it sets a challenge for government to open itself up to ideas from communities in a way that in the past it has been too reluctant to do, and in that sense to turn government upside down, so that it can truthfully serve the interests of the people and follow their initiative, rather than governing them in the traditional way. The Act introduced the important concept that local and central Government should try to reach an agreement on what local people want. We are keeping this fundamental principle. We made it the centrepiece of the December invitation, and we will make it the centrepiece of the regulations when they are published in draft tomorrow.

The core principles behind the Act and our intentions remain the same. However, the difference I have set out is the first of several differences between the first invitation and the second, all of which are designed to improve the process. I have been grateful for the helpful suggestion that the Local Works coalition has made in helping us to frame these changes. There was some frustration, as reflected by the hon. Lady, about the fact that some of the processes were rather slow, bureaucratic and cumbersome. In the second invitation, we are seeking to be much more open, responsive and bureaucracy free. More action and less paper is what people want from us.

We want the second invitation to put people firmly in the driving seat. As the hon. Lady knows, under the first invitation, we saw only a fraction of the ideas that people put forward—those put forward by the selector for the Government to try to implement. This time, we have made a commitment to consider everything. We guarantee that we will try to help with any genuine problem raised. We do not want to filter out good ideas just for the sake of having a smaller number. Anyone can now e-mail one of the barrier-busters we have established in my Department with an example of how red tape or some other regulation or practice is preventing people from improving their area, and we will do our level best to resolve it.

Under the first invitation, people submitted their idea, but then, as the hon. Lady pointed out, had to wait a year or more for a decision to be taken, with no way of keeping track of progress. If people were concerned because they did not know where their idea was, they wondered whether it had been forgotten about altogether. This time, anyone who submits a request through the barrier-busting site will have a tracking number, like with an internet order, so that the person can tell where it is in the system, and they will have a dedicated person to call to check on progress.

The first invitation was time limited and burdensome on councils, but this time there is no deadline. Councils can ask for people’s ideas at any time and in any way they want. We will not presume to know better than them how they should talk to their local communities and whom to involve. The first invitation also set out a rather restrictive role for the selector—the body tasked to keep the Government honest in their handling of the Act. The selector was asked to reduce the number of suggestions and to prepare a pared down list. This time, however, we will give the selector as well as the people proposing the ideas more freedom than ever before.

28 Mar 2011 : Column 149

They will be able to choose which ideas to champion and will get involved only when they feel the need to. People will have the right directly to address the Government. They will also have help from an advisory panel to assist them. I am pleased to announce that it is our intention that Local Works and the National Association of Local Councils, both of which have been vital, will join the Local Government Association in providing a really top-notch advisory panel to the selector.

Because there might be times when, despite our best efforts, it will not be possible to reach agreement between Whitehall and councils on the way ahead, councils that go the extra mile—those that want to champion people’s ideas under the 2007 Act, but are told that we cannot remove the barrier stopping them—will get an extra route of appeal. We will reform the role of the selector, so that it can resubmit that request for help and require us to discuss that request with it before we come to a decision.

Finally, let me mention another difference that I regard as an improvement, and which I hope the hon. Lady will too. The first invitation, before the amendment, excluded parish councils. We are very keen indeed for parish and town councils, which represent their communities so successfully, to submit suggestions and proposals under the 2007 Act. That is one of the reasons why we are keen for the National Association of Local Councils to be included in the work of the selector. We will ensure that the duty to “try to reach agreement” with the selector will apply to requests from parish councils, not just higher or upper-tier authorities, as they are referred to.

All in all, the changes are designed to make the process easier, more open, less bureaucratic and more

28 Mar 2011 : Column 150

effective at making change happen—and, I hope, more inviting for people in communities up and down the country. With the barrier-busting services, the support and advice to which Ministers have access will now be increasingly available to people in communities. If we regard people in communities as having good ideas, it is incumbent on us to give them help and support in turning those ideas into reality, just as Ministers count on officials to help them turn their ideas into legislation. It has been my ambition in proposing these changes to turbo-charge the 2007 Act.

My final point is that, through the consultation, the Government are listening for further suggestions and changes that might be made, which we know are most likely to come from people in communities. The consultation on the regulations is a genuine consultation. If there are things that we have missed out or if suggestions are made during the consultation, we will do our level best to take them into account. The operation of the 2007 Act should go along with the spirit of the Act, and should be driven by communities.

I hope that those points will have brought the hon. Lady up to date on our intentions for the 2007 Act. I hope that she will welcome the fact that the publication that she was hoping for will happen tomorrow, in a written statement to the House. I would welcome the chance in future to discuss with her and hon. Members from up and down the country how we can put real power into the hands of local communities, and in so doing make our country and those communities better.

Question put and agreed to.

10.27 pm

House adjourned.