Graham Stuart (Beverley and Holderness) (Con): I think what the House will take from the hon. Gentleman’s animated, passionate and, as ever, fluent speech is the fact that he is furious about a typically British evolution in the system of government that blocks his most devout desire, which is, of course, separation for Scotland.

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This system makes it fair in England. It deals with that grievance and means that his hope for independence disappears. That is why he is so angry.

Pete Wishart: As with so many things, the hon. Gentleman is half right. This has been noted in Scotland. A lot of people are observing this and seeing this Parliament becoming, in effect, an English Parliament. They are seeing the voices of their Members of Parliament, so recently elected, diminished in this House. They will not be able to speak or vote in particular circumstances.

Throughout the debate on EVEL, the Leader of the House gave the impression that these votes would be subject to a double majority—that the whole House would express its will and then there would be a vote for English Members, which would effectively be their veto—but that has not happened. Instead, there has been a banishment. That is the brutal reality of EVEL. This is what happens when we start mucking about with the Standing Orders and our membership arrangements. We are left with some Members who can do anything—participate and vote on any issue—and others who cannot. It is totally unsatisfactory. We have wasted God knows how much time discussing these issues today. It has made such a mess of parliamentary proceedings and added extra elements to the functions of an already hard-working House when considering Bills. It is a total mess.

Sir Gerald Howarth (Aldershot) (Con): The hon. Gentleman has already told the House that the Scottish nationalist party—[Hon. Members: “National!”]—that the Scottish National party has no interest in this measure, which in no way applies to Scotland, and therefore will not vote on it. What is his problem? SNP Members have every right to speak, and we have addressed an injustice. For years, Conservative Members felt like second-class citizens, unable to vote on health and education matters in Scotland, while they have been able to vote on matters solely to do with England. Would the SNP have voted on the measure to bring hunting regulations in England and Wales into line with those in Scotland?

Pete Wishart: I say this in all candour to the hon. Gentleman, whom I very much respect: we hear much from our English colleagues about their deeply held views on EVEL. He is a fine exponent of this perceived injustice: “How dare these Scots oppress English Members”—they only make up about 85% of the House!—“by coming down here and stealing our votes and having a say in our legislation?” With this Conservative majority, 88%, I think, of the House is English-only, yet we are the reason they cannot get their way. It is a ridiculous argument.

I do not want to take up any more time—[Hon. Members: “Hear, hear!”] I can if Members would like—but we will return to these issues in the future. This is not concluded. I have heard several English Members say they are doing this to save the Union. I add a word of caution to my friends representing English constituencies: in establishing this Committee and pursuing the issue in this way, they are driving Scotland out of the door. That is how it is seen in Scotland. During the referendum campaign, as you will remember Madam Deputy Speaker, we were told: “Stay with us, Scotland. Scotland, we love you.” But the minute we park our backsides on these green Benches, we are diminished in status and not allowed a say in all matters.

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Mr David Winnick (Walsall North) (Lab): As someone proud to represent an English constituency, I feel—I do not know if my Labour colleagues feel the same—that the Tories are making precisely the same mistake as their predecessors did over Ireland. The way to proceed is for Scottish and Welsh Members to show self-restraint in deciding whether to vote on an issue. To have first and second-class Members does a disservice to the Union. I deplore what is being done.

Pete Wishart: I am very grateful to the hon. Gentleman. I knew his would be one of the quality interventions of the debate. He is absolutely right. The only thing I would say to him is this: where on earth is his Front-Bench team? They are not even prepared to make a speech or statement. Why are they not participating? Labour Members used to be stalwarts of this debate. I remember when we had 50-odd Labour Members for Scotland. They would have been making a fuss and standing up for Scotland’s interests, yet today there is absolute silence from the Labour Benches.

Ian Murray (Edinburgh South) (Lab): I am delighted the hon. Gentleman has given way, because no SNP Members have participated in the Bill proceedings. We agree that this process is a complete charade, but while I was voting at 2.45 am last week on behalf of my constituents, he was in his bed.

Pete Wishart: Maybe. It is with great fascination that we hear from the one and only Scottish Labour Member of Parliament. Perhaps the reason why the hon. Gentleman is in such a diminished position is the Labour party’s silence on these issues. The fact that Labour Members have ignored them all the way through speaks volumes about the attitude of the Labour party. I do not know whether it is due to the particular chaos it is going through, but we need to hear from Labour Members to find out their view about what has happened.

Alison Thewliss (Glasgow Central) (SNP): Speaking as someone who was here in the wee small hours, I can say that Labour Members were notable for their absence, being far too busy clawing their own eyes out at the time. It is a bit of a cheek for them to seek to lecture us here.

Pete Wishart: I am grateful to my hon. Friend for reminding us that that was the night of the long reshuffle, so I suppose we should be grateful that any Labour Members were there. I do not wish to take up any more time.

Lady Hermon: I am grateful to the hon. Gentleman for allowing me to intervene. Since the Front Benchers have boasted—and it was a boast—that this is an historic occasion, it would help if the occasion was not flawed. To take but one example, new clause 62 is designated as applying exclusively to England. Will the Minister quickly turn to it before we proceed in order to establish whether it applies only to England, because given that it appears in the new clause, I think the word “Wales” applies to it?

Pete Wishart: The hon. Lady has made a creative intervention to put her point directly to the Minister, and I think it deserves a response. All I can say to her from the SNP perspective is that we are going to see lots

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more issues like that. Confining the EVEL rulings to a Grand Committee means that no consequential issues can be considered by the Speaker in making his certifications. That means that many massive issues will impact on my constituents down the line, but I will not be able to represent them in those matters.

If Conservative Members think they have won and believe that this will not have anything other than a totally detrimental impact on the fortunes of the Conservative party in Scotland, they need to have another think about it. This is unworkable; this is ungovernable; this is a mess; this is unfair. This creates two classes of Members in this House, which is totally unacceptable to my hon. Friends and the Scottish National party.

John Redwood: I rise to thank Ministers for taking England on its first step on the journey to justice and fairness for our country. Having participated in recent Parliaments and seen very large powers transferred to Scotland for self-government in accordance with the wishes of many Scottish people and their now vocal representatives from the SNP, I would have thought that on this day of all days it was time for Scotland to say, “We welcome some justice for England to create a happier Union, just as we have fought so strongly for so long for more independence for Scotland.” I hope that SNP Members will reconsider and understand that just as in a happy Union, where there are substantial devolved powers of self-government for Scotland that they have chosen to exercise through an independent Parliament, so there needs to be some independent right of voice, vote and judgment for the people of England, which we choose to do through the United Kingdom Parliament because we think we can do both jobs and do not wish to burden people with more expense and more bureaucracy.

On this day of all days, when Labour has been reduced to a party of England and Wales, having been almost eliminated from Scotland in this Parliament, I would have thought that the Front-Bench—[Interruption.] Our party is speaking for England. The point I am making is that now that the Labour party represents parts of England and Wales but has so little representation in Scotland, it behoves Labour Members to listen to their English voters and to understand that although they might not want justice for England, their voters do want it and are fully behind what this Government are doing.

Graham Stuart: I congratulate my right hon. Friend on the work that he has done for many years in championing the need for EVEL to be introduced. Does he agree that, given that they completely failed to persuade the Scottish people to end the Union, the greatest hope of the nationalists was that such would be the grievance and resentment in England that Scotland could be pushed out? Does he agree that this modest step is a way of alleviating that grievance, and that that is why the hon. Member for Perth and North Perthshire (Pete Wishart) was quite so angry?

5.45 pm

John Redwood: I entirely agree. We need fairness for England, in respect of the new financial settlement as well as our legislative procedures, but the way to preserve

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and develop the Union is to show that it is fair to all parts. I am sure that that will mean greater powers of independence for Scotland than we will gain for England, but we cannot ignore England. England deserves a voice, England deserves its votes, and England deserves, at the very least, the right to veto proposals that do not suit England but only affect England. I think that we shall need fair finances as well, because otherwise the English people will not be as happy with their Union as we should like them to be.

I hope that today is a day on which to advance the cause of the Union rather than to damage it. I hope that it is a day on which other Scots will welcome this small step on the road to justice for England, and will see that it helps them as well as us. What is wrong with England having a voice, its own political views, and some of its own political decision-making, in a Union in which Scotland took a great deal of that following the general election? In that election, all the main parties fought on the united proposition that there should be more rights to self-government for Scotland, but my party wisely said that that meant that there had to be some justice for England too. This is a small step towards that justice, and I hope the House will welcome it and not oppose it.

John Healey (Wentworth and Dearne) (Lab): We had intended simply to leave the Government to deal with the mess of their own making in this debate; and this debate is about the Housing and Planning Bill. With respect to the right hon. Member for Wokingham (John Redwood), it is not about the Union, or about justice for a part of the Union. This is, quite simply, a motion and a debate about the Housing and Planning Bill.

The rather ridiculous proceedings that we have seen this afternoon, and the over-excitement, underline the flaws in rushing reform of the House without proper consideration, without proper consultation and without proper cross-party agreement. We want, and recognise the need for, a stronger voice for England in this Parliament, but we have always said “a voice, not a veto”, and this Legislative Grand Committee constitutes a veto simply for those Members who are eligible. That should not be happening in this way, in a unified Parliament of the United Kingdom.

Simon Hoare: The hon. Gentleman appears to have neglected the apposite point that was made by my hon. Friend the Member for North East Somerset (Mr Rees-Mogg) and reiterated throughout the Procedure Committee’s discussion of this proposal, namely that it meant a change in Standing Orders on an almost “suck it and see” basis, so that we could see how it would work out. The great totemic change in the rules of the House that is supposed to have taken place does not exist, in statute or anywhere else. If we need to tweak this, we can, because it is only a change in Standing Orders.

John Healey: Standing Orders can always be altered, particularly by Governments, but by doing it unilaterally the Government have, on this occasion, created an extremely unsatisfactory procedure, as this afternoon’s debates have amply demonstrated.

Let me say something to the Scottish nationalists. I have not seen, none of my colleagues have seen, and the House has not seen them present in such numbers in

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debates on the Housing and Planning Bill, and at no stage—not on Second Reading, in Committee or on Report—have we seen them vote on the Bill. The hon. Member for Perth and North Perthshire (Pete Wishart) said this afternoon, “We have little interest in this Bill”, and he was right, because so little of the Bill concerns Scotland. He and his party would do much better to concentrate on his own poor record in government, and on improving what the SNP Government are doing about housing in Scotland. There are 150,000 people on the council house waiting list in Scotland and there is the lowest level of house building in Scotland since 1947. This debate—these proceedings—is simply preventing us from getting on with the proper job of holding this Government to task on the Housing and Planning Bill in this Chamber, and I hope we can move on to Third Reading without any further delay.

The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing): I remind hon. Members—although I do not think hon. Members really need to be reminded—that if there is a Division on the consent motion for England and Wales, only Members representing constituencies in England and Wales may vote. This extends to expressing an opinion by calling out Aye or No when the Question is put or acting as a Teller—I know the hon. Member for Perth and North Perthshire (Pete Wishart) knows that I recognise a Scottish voice when I hear one.

Question put and agreed to.


That the Committee consents to the following certified clauses and schedules of the Housing and Planning Bill and certified amendments made by the House to the Bill:

Clauses and schedules certified under Standing Order No. 83L(2) as relating exclusively to England and Wales and being within devolved legislative competence

Clauses 97, 98 and 120 to 150 of the Bill as amended in Committee (Bill 108) including any amendments made on Report;

Schedules 7 and 10 to 15 of the Bill as amended in Committee (Bill 108) including any amendments made on Report;

Amendments certified under Standing Order No. 83L(4) as relating exclusively to England and Wales

Amendments 180 and 181 made in Committee to Clause 71 of the Bill as introduced (Bill 75), which is Clause 76 of the Bill as amended in Committee (Bill 108);

Amendments 127 and 128 made in Committee to Clause 85 of the Bill as introduced (Bill 75), which is Clause 92 of the Bill as amended in Committee (Bill 108).

Lady Hermon: On a point of order, Madam Chairman. On a serious point of order, I am very conflicted because I do not want in any way to be critical of the Speaker and his certification, but the Speaker clearly today confirmed his provisional certification and that included reference to new clause 62 as being exclusively applicable to England. New clause 62 applies to both England and Wales. What could the Deputy Chairman advise when a certification by the Speaker—for whom I have enormous regard—appears to be flawed?

The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing): The hon. Lady makes a perfectly reasonable point, and it is important that we consider points of order because this is a new procedure and the Procedure Committee has assured the House that it will be looking at the procedure and how it works in practice.

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What I can say to the hon. Lady is that Mr Speaker did make available in the Vote Office, and in other ways, several days ago his provisional decision on this matter, and there have been several days during which the hon. Lady, and indeed any other hon. Member, had an opportunity to make representations to Mr Speaker exactly along the lines that she has just done. Perhaps if this happens in future and the hon. Lady has similar concerns, she will have ample opportunity to take those concerns up with Mr Speaker before we get to this point in the proceedings.

Lady Hermon: Further to that point of order, Madam Chairman. I do apologise for not bringing this to the Speaker’s attention earlier, but I am bringing it to the House’s attention today. I would hate to think there might be any consequences because flawed procedure has been followed in this case. It is a very important point. Members are going to be asked to go through the Division Lobby—apart from those of us from Northern Ireland, about which I feel exceedingly resentful, as I think it is quite wrong; and I do have an interest in this Bill because my constituents who are landlords are affected by it. So today I would like Madam Chairman to give advice as to whether we should pause and postpone this historic occasion until we get the certification corrected by the Speaker.

The First Deputy Chairman: No, again the hon. Lady is making a perfectly reasonable point, but I think I have already answered it. The fact is that the House took the decision on 22 October that we would proceed as we are proceeding today. As I have said to the hon. Lady, if she has concerns about how matters work in practice both the Procedure Committee will look at this as the weeks go on and Mr Speaker will be pleased to hear from the hon. Lady if she has concerns the next time we come to this point in the proceedings. But now we will proceed.

The House forthwith resolved itself into the Legislative Grand Committee (England) (Standing Order No. 83M(4)(d)).

The First Deputy Chairman: I remind hon. Members that no further debate on the consent motion for England is permitted, and that if there is a Division on the consent motion for England, only Members representing constituencies in England may vote. This extends to expressing an opinion by calling out Aye or No when the Question is put.

Motion made, and Question put forthwith (Standing Order No. 83M(4)(d),

That the Committee consents to the following certified clauses and schedules of the Housing and Planning Bill and certified amendments made by the House to the Bill:

Clauses and schedules certified under Standing Order No. 83L(2) as relating exclusively to England and being within devolved legislative competence

Clauses 1 to 63, 65 to 77, 79 to 81, 83 to 85, 87 to 95 and 99 to 119 of the Bill as amended in Committee (Bill 108) including any amendments made on Report;

Schedules 1 to 6, 8 and 9 of the Bill as amended in Committee (Bill 108) including any amendments made on Report;

New Clauses NC6, NC7, NC29 to NC31, NC35, NC37, NC43 to NC46, NC59, NC60 and NC62 on Report;

New Schedules NS1, NS4 and NS5 on Report;

Amendments certified under Standing Order No. 83L(4) as relating exclusively to England

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The omission in Committee of Clauses 35 and 36 of the Bill as introduced (Bill 75);

Amendment 4 on Report, resulting in Clause 78 of the Bill as amended in Committee (Bill 108) being left out of the Bill;

Amendment 111 on Report, resulting in Clause 64 of the Bill as amended in Committee (Bill 108) being left out of the Bill;

Amendment 129 on Report, resulting in Clause 86 of the Bill as amended in Committee (Bill 108) being left out of the Bill.—(Brandon Lewis.)

Question agreed to.

The occupant of the Chair left the Chair to report the decisions of the Committees (Standing Order No. 83M(6)).

The Deputy Speaker resumed the Chair; decisions reported.

Third Reading

5.56 pm

The Secretary of State for Communities and Local Government (Greg Clark): I beg to move, That the Bill be now read the Third time.

It is customary on these occasions to thank all those involved in the consideration and scrutiny of the Bill in question. On this occasion, I would like to pay particular tribute to the Minister for Housing and Planning for having moved so elegantly that historic motion for the first time in this House. I also commend the Leader of the House of Commons for giving us the opportunity to carry out our consideration of the Bill in this way. Throughout our proceedings, the debate has been rich and vigorous from beginning to end. Those of us who were here last week for the first day of its Report stage will know that there was no let-up in the passion—or indeed the number—of the contributions, despite the lateness of the hour.

Before embarking on the traditional congratulations, however, I suggest to the whole House that a degree of humility would be in order on the part of us all. Housing and planning policy has been debated in this House and in the other place for decades, yet for decades this country has not built the number of new homes that we need, despite the improvements of recent years, including the 50% increase in new housing starts and the fact that planning permissions now stand at more than 200,000 a year. The last time we consistently built 200,000 homes a year was back in 1988.

Clive Efford: May I take the Secretary of State back to his comment about humility? Will he take this opportunity to apologise to council tenants for not informing them at the general election of the Conservatives’ intention to take away their secure tenancies and for introducing that measure only towards the end of the Bill’s Report stage? Council tenants were not given that information before they went to vote in the general election.

Greg Clark: Going back to 2010, the Prime Minister thought it was reasonable that when we were allocating homes and social tenancies, we should amend the idea that someone should inherit, without conditions, a tenancy. That business was notified as much as five years ago.

Evidence of the effects, over many Administrations, of not building the number of homes we have needed for many decades has been seen in the lives of those who could, should and want to be homeowners, but have been denied the opportunity that many of us have

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had. Those who say that we already build enough homes or that home ownership is not important would do well to remember that.

Mrs Maria Miller (Basingstoke) (Con): I applaud the Secretary of State’s commitment to house building, to make sure that more of our constituents can be homeowners. I also applaud the Minister for Housing and Planning’s undertaking to look further at the quality of that house building in the response he made to my new clause 1 in the initial parts of our debate on Report.

Greg Clark: My right hon. Friend is absolutely right in what she says, and she has made an important contribution to the proceedings. It is vital that we see an improvement in the quality of design of our housing stock. One feature of the last housing bubble that was experienced before the Government came into office was a dearth of new family homes. Instead, most of the increase in housing that came during that time was in the form of flats. That arose from the particular incentive structure in place, whereby units, rather than any suggestion of quality, were important. The points she made have been well noted; in fact, in some of the announcements the Prime Minister made in recent days we have stressed the importance, in regenerating our estates, of adhering to standards of the highest quality.

Andy Slaughter: It is no surprise to hear that the Secretary of State wants to move away from talking about council tenancies, because his treatment of them is a disgrace. He was not asked about inheriting succession rights; he was asked about security. Why can council tenants not continue, as happened under the Housing Act 1985, introduced by Margaret Thatcher, to have security in the same way that anybody else would want in their home? The situation is appalling. Why is he only building starter homes, which nobody can afford, in Old Oak in my constituency, instead of social homes, which people need and want?

Greg Clark: The hon. Gentleman is completely wrong, and if he looked at our housing plans, he would see that they include building 100,000 houses for affordable rent as well as 200,000 starter homes. It is right, and it is the mandate on which this Government were elected, to provide homes for people who aspire to own their own home, as well as for those who want to rent. One failure during recent years has been that people who wanted to own their own home, in the way that many Members of this House have, have been denied that opportunity.

Mr Bacon: Does the Secretary of State agree that the hon. Member for Hammersmith (Andy Slaughter) is wrong not only because this Government are allowing the building of more affordable homes, but because this Bill provides for self-build and custom house building on a larger scale than ever before—and this can also include social housing for rent?

Greg Clark: My hon. Friend is absolutely right: we need homes provided right across the country, of all the different types and tenures that our constituents and residents want. There has been a dearth of affordable homes for first-time buyers for an increasing number of years, which is why the commitment in our manifesto to

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provide starter homes for first-time buyers is such an important part of our platform, which we are implementing with this Bill.

Graham Stuart: Does my right hon. Friend agree that the most important single thing we can do is to get building, because it is only by supply outdoing demand that prices will come down, and that all the programmes we had in the Labour years, from key worker housing to all the rest of it, were band aids on a massive wound? It is building that we need. That is what will make housing more affordable and that is how we are going to deliver a true one nation Government.

Greg Clark: My hon. Friend is right to say that we need to get Britain building again, and we are doing so, with a 25% increase in starts in the past year. We need to do this right across the country. I would have thought that all Members of the House, including Labour Members, would share in the warm welcome given across the housing sector, including by housing associations and by builders big and small, to the announcements the Chancellor made in the spending review, which double the housing budget. This is the biggest programme of affordable house building that we have seen since the 1970s.

Andrew Gwynne: Of course, what is affordable to the Secretary of State’s constituents might not be affordable to mine. Does he share my concerns that what we will see, as perhaps an unintended consequence of his measures, is the removal of properties from the social rented sector and their appearance in the private rented sector, costing more to the public purse in the long run?

Greg Clark: No, we want to see more homes of all types. We have committed to build 1 million homes over the next five years, which is something that the previous Labour Government signally failed to do. In fact, when they were in power, the number of homes that were built in a single year fell to 88,000, which was the lowest number since the 1920s.

Graham Jones (Hyndburn) (Lab): At the weekend, the Prime Minister said on the “Andrew Marr Show” that he expected a million properties to move from the social rented sector to private ownership. The Secretary of State is talking about building a million properties. Where are the extra social rentals coming from? It seems that the Prime Minister is saying not only that there will not be any extra, but that there will actually be a reduced number of social rented properties. Does he not see that the maths do not add up?

Greg Clark: The reduction in social rented properties happened under the previous Labour Government, when the stock fell by 400,000. Our determination is to build more homes of all types, so that we can house the growing number of young people who want to own and rent homes of their own.

Mr Prisk: On council houses, is not the real scandal that, in 13 years, the previous Labour Government failed to build the number of homes that we built in five?

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Greg Clark: My hon. Friend is absolutely right. As Housing Minister, he made a major contribution to the revival in house building that was necessary after the crash that took place under the previous Labour Government. We have seen, over the past five years, house building recover from the record lows of the previous decade, but, as this Bill makes it clear, these are the first steps away from a much longer record over successive Parliaments. Indeed, the connection between supply, affordability and ownership is obvious to all, and yet for decades successive Parliaments and Governments failed to find a lasting solution not because they did nothing, but often because they failed to tackle the underlying issues.

In the previous Parliament, the Government’s focus was on recovery from the worst housing crash since the second world war, but in this Parliament, our focus has shifted from rescue to reform. Though wide-ranging in scope, the Bill does not represent the entirety of what needs to be done. As the Chancellor made clear in the autumn statement and as the Prime Minister said last week, the Government are committed to a comprehensive and ongoing programme of reform, addressing the whole of the problem and not just part of it. This Bill is of central importance to the overall strategy.

Anna Turley (Redcar) (Lab/Co-op): I appreciate the Secretary of State kindly giving way. He talked about the previous Labour Government’s record, but could he explain why funding for affordable homes was slashed by 60% when his Government came to power in 2010?

Greg Clark: The record of the previous Government is very clear: we built more affordable homes, specifically more council houses, than the previous Labour Government did in 13 years, so we will take no lessons from the hon. Lady.

Tristram Hunt (Stoke-on-Trent Central) (Lab): Will the Secretary of State confirm at the Dispatch Box that, under this Bill, there is no block to foreign buyers purchasing council housing built for British people down the generations? As a result, we will see the sell-off to foreign investors of properties that were built for workers in this country.

Greg Clark: The hon. Gentleman might not be aware that restrictions are in place that prevent, for a considerable period, homeowners who have exercised the right to buy selling on. In fact, foreign ownership of UK property is still at a very low level. I do not recall the previous Labour Government introducing any particular restrictions on that. Let me point to two flagship manifesto commitments that the Bill implements, namely the extension of the right to buy to housing association tenants and the provision of 200,000 starter homes by 2020. The Bill is making good the pledges that were made directly to the British people and that were backed by the British people in the general election.

Catherine West: That particular element of the Secretary of State’s scheme does not work in high-value areas where people, because of the sort of work that they do, will never ever be able to get a mortgage. Therefore, there are certain people who will never be helped by his Bill.

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Greg Clark: I hope that, on behalf of her constituents, the hon. Lady will welcome the announcements that were made to extend the help-to-buy scheme in London to provide greater help there. In fact, housing associations, including those in her constituency, have welcomed enthusiastically one of the key features of this Bill, which is the provision that enables them to provide her residents with the right to buy their home and, at the same time, to build more homes in London.

Robert Neill: On that point, does my right hon. Friend recognise that it is thanks to this Bill, the work of the current Mayor of London and the initiative of my hon. Friend the Member for Richmond Park (Zac Goldsmith) that we are seeing consistently more affordable housing being delivered in London? That is in contrast with what happened under a socialist Mayor and a socialist Government that persistently under-delivered for London.

Greg Clark: Indeed, and one of the proud pieces of the legacy of the current Mayor of London, our hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson), is the opportunities he has given across the capital for people to own and rent their own home.

Of course, there are few pieces of legislation that cannot be improved by the deliberations of this House. This is a long Bill and I thank Members on both sides of the House for their informed contributions, their attention to detail and, on occasion, their perseverance. That applies especially to the members of the Public Bill Committee, adroitly chaired by my hon. Friend the Member for North Wiltshire (Mr Gray) and the hon. Member for Mansfield (Sir Alan Meale). I am also grateful for the expert guidance of my departmental officials and to the Clerks of the House.

Finally, allow me to thank my own formidable Front-Bench team, who conducted this Bill through all its proceedings with precision and tenacity and who have strengthened an already important Bill. In the same spirit, allow me to acknowledge the contributions of Opposition Members who served long into the night not just on Report but in the Bill Committee. In contrast to the Cities and Local Government Devolution Bill, which I am informed has completed its passage unamended in the House of Lords this very afternoon, we might not have greatly expanded the common ground between us during our deliberations on this Bill, but I thank the Opposition for their contributions to a debate that has at times generated light as well as heat.

I join my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) in recognising the notable contribution of my hon. Friend the Member for Richmond Park (Zac Goldsmith). London is a city like no other and it has a property market to match. In view of the special challenges and opportunities, it is right that proceeds from the sale of vacant high-value assets should be used to provide new affordable homes in London on a two-for-one basis. I am delighted that the Bill has been amended fully to support that objective, and I am grateful to my hon. Friend the Member for Richmond Park for his advice and advocacy in this matter. London is fortunate to have such a tireless and effective champion.

Of course, it is not only Members of this House who have contributed to the development of the Bill. I would like to put on record my gratitude to all those

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beyond this Chamber who have made their mark. That includes local government leaders of all parties, experts in planning policy, tenants’ representatives and the housing sector in all its diversity. Indeed, nothing has made a greater contribution to the development of the Bill than the historic deal agreed last year between the Government and the housing association movement. The voluntary agreement on right to buy not only speeds up the delivery of a commitment made to the British people at the election, but provides the basis on which housing associations can play a major role in the delivery of new affordable homes for both rent and purchase. I would therefore like to express my particular thanks to the National Housing Federation and its chief executive, David Orr.

The Bill has been the subject of intensive scrutiny and debate, with more than 40 hours in Committee and a further 15 on the Floor of the House. Furthermore, it has been a debate in which words have had consequences. The Government have listened and, as we should, we have acted on what we have heard. Significant and strengthening changes have been made as a direct result and thus, subject to today’s vote, the Bill goes to the other place in good shape, buttressed by a clear electoral mandate. I commend it to the House.

Madam Deputy Speaker (Mrs Eleanor Laing): As we complete this historic new procedure, I propose the Question that the Bill be now read the Third time.

6.14 pm

John Healey (Wentworth and Dearne) (Lab): As we pass this Bill on to the other place, I thank the officers and staff of the House, particularly those in the Public Bill Office, for their guidance and support throughout our work. I also pay tribute to my Front-Bench colleagues, my hon. Friends the Members for City of Durham (Dr Blackman-Woods), for Erith and Thamesmead (Teresa Pearce), for Greenwich and Woolwich (Matthew Pennycook) and for Easington (Grahame M. Morris). They relentlessly exposed the deep political, fiscal and policy flaws in the Bill as we opposed the worst of what the Government are trying to do. I am grateful, too, for the unified and strong support from my colleagues on the Labour Benches, particularly those who served on the Public Bill Committee—my hon. Friends the Members for Bootle (Peter Dowd), for Harrow West (Mr Thomas) and for Dulwich and West Norwood (Helen Hayes). I pay tribute also to the other members of that Committee who worked through those 40 hours of scrutiny.

The voices of serious concern from the Conservative Benches are welcome, as well as striking—those of the hon. Members for Hertford and Stortford (Mr Prisk) and for Wimbledon (Stephen Hammond), the right hon. Members for Cities of London and Westminster (Mark Field) and for Arundel and South Downs (Nick Herbert), and the hon. Members for St Albans (Mrs Main), for South Cambridgeshire (Heidi Allen) and for Oxford West and Abingdon (Nicola Blackwood), to name just a few. It is a warning to Ministers, and a signal to the other place, that Conservative Members and Conservative local government leaders rightly have growing criticisms about the loss of genuinely affordable homes in their area, rural and urban alike, about the sweeping new powers for Ministers to impose planning decisions on

12 Jan 2016 : Column 813

local communities, and about the so-called starter homes being unaffordable for many young families on modest incomes in their areas.

Usually, we hope to improve a Bill as it goes through the House. This was a bad Bill; it is now a very bad Bill. It was a bad Bill, now made much worse by amendments forced through at the last minute after the Committee’s line-by-line scrutiny—new clauses to define homes on sale for up to £450,000 as officially affordable. The Government are not building enough affordable homes, so they are simply branding more homes as affordable. Other late amendments included new clauses to stop councils offering anything longer than two to five-year tenancies, meaning the end of long-term rented housing, the end of a stable home for many children as they go through school, and the end of security for pensioners who move into bungalows or sheltered flats later in life.

How has it come to this—that we on the Labour Benches are having to defend the reforms and rights introduced by Margaret Thatcher? This is an extraordinary and extreme Bill.

Catherine West: Does my right hon. Friend agree that this Bill makes the lives of Londoners and people in other regions as well much less secure? Added to the insecurity that many people are experiencing in the workplace, that makes everyone’s life much worse.

John Healey: My hon. Friend is right. The Bill fails to get to grips with the problems of modern life and the crisis of homeownership, especially for young people and families on ordinary incomes. The so-called starter homes are simply out of reach in those areas where people most need help to buy a home of their own. Last week, Tory MPs voted against Labour proposals to make those homes more affordable. The Bill sounds the death knell for social housing, which has had support from all parties for over a century, and for the first time since the second world war, the Chancellor confirmed in the autumn statement that there is no national investment programme to build such housing.

Starter homes will be built in place of affordable council and housing association homes, both to buy and to rent. Councils will be forced to sell their best properties and housing associations will not replace many of their right-to-buy sales with like-for-like homes. That is why Shelter, like the independent Chartered Institute of Housing, predicts that this Bill will lead to the loss of at least 180,000 genuinely affordable homes to rent and buy over the next five years—an extraordinary and an extreme Bill.

We have tried to stop the worst of the plans, but Tory Ministers and Back Benchers have opposed our proposals to give local areas the flexibility to promote not just starter homes but homes of all types, depending on local housing need; to make starter homes more affordable and protect and recycle taxpayers’ investment; to stop Ministers from mandating that pay-to-stay limits hit working households on modest incomes; to allow local areas to protect council and housing association homes with a proper replacement of each; to limit any automatic planning permission from Ministers for brownfield land; and to protect stable family homes for council tenants.

In truth, many of the problems are caused by Ministers who announce first and ask questions later—no consultation and little time for proper scrutiny. More

12 Jan 2016 : Column 814

than 60 pages of new legislation were tabled at the last minute after the Committee had completed its scrutiny. There is a great deal for the other place to do.

In five years of government, we have seen five years of failure on housing under Conservative Ministers. Homelessness is rising, private rents are soaring and levels of homeownership have fallen each and every year since 2010; they are now at the lowest level for a generation. Over the past five years, the Government have seen fewer new homes built than under any Government in peacetime history since the 1920s. After five years of failure, the Bill does nothing to deal with the root causes of those failures; in many areas, it will make the problems a great deal worse.

Andrew Gwynne: Is it not also time that the Government practised what they preach? There are measures in the Bill to tackle houses of multiple occupation, yet in my constituency, but for the tenacity of Councillor Oliver Ryan and local residents, the Home Office and its contractors would have converted a small semi-detached family home into an HMO for the dispersal programme.

John Healey: My hon. Friend is right; I could have extended the list. Tory Ministers and Back Benchers have voted against our proposals to reinforce councils’ hands so that they deal with such abuse from landlords and such exploitation of tenants, to require homes to meet standards that make them fit for human habitation and to mandate annual electrical safety checks. They rejected each and every one of those proposals, to which we will return in the other place.

Mr George Howarth (Knowsley) (Lab): Will my right hon. Friend add to that list the failure to address the fact that some private landlords use properties to launder drug money?

John Healey: My right hon. Friend may well be right in some cases. One of the weaknesses of the enforcement regime and council powers, not to mention the resources being stripped out by the deep cuts, is that action to deal with such problems, often with other agencies, is prevented. Those issues blight many areas when they could be dealt with.

During the Bill’s passage the Prime Minister has been hyperactive with housing announcements; if press releases built homes, he would have had the housing crisis sorted by now. In years to come, people will judge him, the Government and the Bill on whether their housing pressures have eased, their housing prospects have improved and their housing costs have become more affordable. After five years of failure, we desperately needed a Bill to give people hit by the high cost of housing and the cost of housing crisis some hope that things will change. But this is not that Bill. This is an extraordinary and extreme Bill, and we will vote against it again tonight.

Several hon. Members rose

Madam Deputy Speaker (Mrs Eleanor Laing): Order. A great many Members wish to speak in this important Third Reading debate. We have only half an hour left. I hope that hon. Members will be courteous and take no more than three to four minutes: that means less than four minutes.

12 Jan 2016 : Column 815

6.24 pm

Robert Neill (Bromley and Chislehurst) (Con): I am saddened to have heard the speech by the right hon. Member for Wentworth and Dearne (John Healey), because he and my right hon. Friend the Secretary of State are two of the people I have always had the most respect for in this Chamber, but his diagnosis is fundamentally flawed. I am sorry that he has fallen into that error.

The reality is that the Secretary of State has brought forward a Bill that is necessary, proportionate and sensible. Anyone who tries to characterise anything that comes from my right hon. Friend as extreme is, I am sorry to say, not in touch with political reality. In the past—I understand why the right hon. Member for Wentworth and Dearne was in difficulty—we saw a litany of failure by Labour Governments. As a result, when my right hon. Friend the Secretary of State and I, with my hon. Friend the Member for Hertford and Stortford (Mr Prisk) and others, walked into the Department for Communities and Local Government, we inherited the worst rates of house building since the 1920s, the worst rates of social housing being built, and a market that was depressed and crushed.

That was particularly so in London, thanks to the very dirigiste and impositional views adopted by the previous Mayor, Ken Livingstone, who choked off the supply of housing, through unrealistic demands for a social element under section 52 agreements on developers and an almost an ideological hatred of the private rented sector—a sentiment which, I am sorry to say, slipped through in an intervention earlier. If run properly, the private rented sector has a crucial role to play in the housing mix of London and of any other city or nation. It is sad that we see a retreat not just back to the ’70s and ’80s but to policy of an incompetence that Herbert Morrison would be ashamed of.

Mrs Miller: Does my hon. Friend recognise the problems that I experienced under the Labour Government of centrally set house building targets that led to high levels of flatted accommodation rather than the family homes that are being delivered under this Government, with hundreds of families getting starter homes of the sort that they could only dream of under the previous Labour Government?

Robert Neill: My right hon. Friend is absolutely right. The London suburbs, in particular, suffered from the ludicrous policy of counting things in terms of units rather than the number of affordable homes. That meant that places such as Bromley, Beckenham and others were swamped with flats being built—one or two-bedroom units—when the real demand was for affordable family homes. That, at last, we are tackling. Good housing associations such as Affinity Sutton in my constituency were happy to sign up to the agreement with the Secretary of State, because it gives them flexibility to be innovative.

I remember when I was a councillor tons and tons of people in my ward wanting to buy their home and the Labour Government stopping them. I find it pretty appalling that someone I would usually respect seeks to obstruct and stop people from having aspiration. Aspiration goes beyond being forever a tenant—it goes to having a chance to buy and a chance to get on. It is that lack of aspiration that so characterises Opposition Front Benchers.

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That is why their opposition to this Bill is so sad and, I would say, such a betrayal of hard-working people—people exactly like my shop steward grandfather, who worked hard to buy his own home and was helped to do so. They are exactly the people this Government are trying to help. We will not take any lessons from Labour Members about social inclusion or equality. They are reversing social inclusion and equality. They set it back, and we should congratulate—

Mr Bacon: While my hon. Friend is on the subject of Labour’s lack of radicalism, does he share my confusion that the Labour party, which has control of many councils and billions of pounds of reserves, is not establishing and promoting mutual housing co-operatives? There is nothing in law to prevent Labour from doing that. If it really wanted to promote in perpetuity social rents, there are avenues available to it. Where is the radicalism one would have expected to hear from Labour Members?

Robert Neill: My hon. Friend is absolutely right. Many local authorities would take that up. Housing co-operatives are a great idea. Labour’s attitude towards the private rented sector has been a barrier to the institutional investment in the private sector that would so much improve the quality of the stock. It is the consistent failure of Labour authorities to take their opportunities that is the real story, not the freedoms that this Government and the previous coalition Government had been giving them.

It is a sad day, but I have to say this frankly to the right hon. Member for Wentworth and Dearne and his hon. Friends: I like them as people but they are profoundly wrong in their opposition to this Bill.

6.28 pm

Alison Thewliss (Glasgow Central) (SNP): I notice that the hon. Member for Edinburgh South (Ian Murray), who criticised us earlier, has since vanished from the Chamber—what a shame.

Members may remember—I am not sure if the hon. Member for Bromley and Chislehurst (Robert Neill) was here—when I spoke on 2 November about my grandparents’ house in Wishaw. I passed it on Sunday, and new tenants have moved in. A house that was in my family’s care as socially rented council tenants has now moved on to another generation. That is a very nice and positive thing that this Government want to remove from England.

Listening to this debate has been like listening to a story about another country, because in Scotland—[Interruption.] If the hon. Member for Burton (Andrew Griffiths) wants to intervene on me, he can, rather than grumbling on the other side of the Chamber. We have not participated in votes on this Bill, because we felt it was important to allow English and Welsh Members to make those decisions. We did not need English votes for English laws to make us take that principled stance.

We have taken on board concerns raised by Shelter, the Chartered Institute of Housing and the Scottish Federation of Housing Associations, which is worried about the impact on Scotland. We could not necessarily table an amendment on unintended consequences for, or things that might happen to, housing associations

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based in Scotland as a result of the Bill; there are a number of cross-border housing associations and we do not yet know what the impact on them will be. If they are forced to sell off stock south of the border, what will be the impact on their investment and other plans for Scotland and Scottish tenants? We do not know.

We have abolished the right to buy in Scotland, and for good reason. Those houses were being lost from the housing stock in Scotland and people were languishing on waiting lists. We realised that we could go no further, because people were not getting the chance to realise their aspiration of a socially rented home. Their aspiration was for a home, not a house, to live in for generations.

The tenancy limit is a cause for concern and will upset many people. People want to live and settle in an area and to belong to it. For many people, that will be the area they grew up in, while for others it will be elsewhere. If people’s rent is going to be up for review every two to five years, as stated in the Bill, they will not know whether they will be permitted to stay in their home. They might have to move and they will not know whether their children will be able to stay in their school. There may, therefore, be consequences for local schools in the area; if there is a constant turnover of pupils, that will impact on a school’s ability to work well, flourish and build a solid community in which we would all wish to live.

The Bill is pretty dreadful in many respects. The Minister said earlier that he did not want central command and control over housing. Why, then, does he want to set the rent and force housing associations to reduce rent by 1%, which undermines their ability to borrow, plan and provide essential welfare rights services to their tenants? They do not have that choice any more—he has taken it out of their hands through his central command and command system.

Pay to stay will have an impact on the personal relationship that many tenants have with their housing officer and their neighbours, who, if their daughter or son is waiting for a house, may feel inclined to clype, should somebody get a wee pay increase or if they want to improve themselves by getting a new job or a promotion. That undermines the principles of every party, because we all want people to get on and do better. It is just not right, and the Government have clearly recognised that by rolling back the scheme and making it voluntary rather than compulsory. I hope that in time they will get rid of it altogether.

I am also concerned about the selling of high-value homes, because they are not luxury mansions, but family homes that allow families to stay in local communities. We should look at that again, because it is very important that they are replaced properly. I will close on that point, because other Members want to speak and I would not want to abuse the House.

6.33 pm

Chris Philp: I will do my best to stick to Madam Deputy Speaker’s injunction of an informal four-minute limit.

It was a pleasure to serve on the Bill Committee and to watch both Front-Bench teams in action. I welcome the Bill as an opportunity further to improve this Government’s record on house building. The right hon. Member for Wentworth and Dearne (John Healey)

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cited some statistics a few moments ago. I respectfully remind him that in his last year as Housing Minister, there were 125,000 starts across the United Kingdom, yet last year, under the current Secretary of State and Housing and Planning Minister, the figure had increased by 35% to 165,000 starts. This Government have a record they can be proud of.

Anna Turley: London has experienced a 55% increase in rough sleeping. There is a Tory Mayor and a Tory Government. Is that the kind of Tory aspiration we have heard about this evening?

Chris Philp: I believe that the level of rough sleeping last year had gone down compared with five years ago. Of course action is needed to combat this terrible problem. I am sure that we can all agree on that.

There is agreement around the House that there is an under-supply of housing in this country when compared with population growth. That is true, and I welcome the measures in the Bill to increase the housing supply, particularly the measures to build on surplus brownfield land, as encapsulated by local development orders. The measures will also help to protect the green belt by making sure that we focus development in areas where it is most appropriate. The London Land Commission, which is jointly chaired by the Minister for Housing and Planning, is already doing its work. I welcome the announcement made a week or so ago about giving it further powers to bring publicly owned land into development. Similarly, amendments tabled on Report last week to introduce non-local authority providers of planning processing services—not decision-making, but processing powers—will expedite the passage of planning consents and further increase the supply of housing. All those measures will help to increase housing supply, and therefore help to improve affordability.

Another area in which the Bill does welcome work is that of home ownership. The right hon. Member for Wentworth and Dearne pointed out that home ownership has declined. The decline started in 2007, not 2010, but it is lamentable that home ownership has gone down. I welcome the starter home initiative, which I hope will reverse the trend. It is regrettable that the Labour party has passed up every opportunity to promote home ownership provided for by the Bill, which I shall be delighted to vote for in a few minutes’ time. In effect, every first-time buyer in this country will be given a 20% discount when the Bill becomes law. That is extremely welcome, and will I hope reverse the tide of home ownership decline. We should all be able to support that.

In summary, the Bill will increase the housing supply and promote home ownership. I urge all Members to support it. I even urge our SNP colleagues to support it vicariously.

6.36 pm

Andy Slaughter: It is difficult to dignify this Bill with analysis, because parts of it are so squalid and vindictive. What is pay to stay if it is not punishing success or making people on moderate incomes unable to afford to live in places such as my constituency. In the short time available, I want to focus on two of its aspects: one is the enforced sale of council housing, and the other is the end of secure tenancies.

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Such sales are nothing less than ad hominem attacks on every council tenant, every housing association tenant and everyone who lives in a social landlord tenancy in this country. Frankly, the policy is outrageous. It has nothing to do with housing policy; it is to do with sectarian interests, gerrymandering and social engineering. I agree with Glenn Tilbrook, the leader of singer of Squeeze, who memorably sang to the Prime Minister on “The Andrew Marr Show” on Sunday that council housing—affordable and secure homes for people on low and moderate incomes—is

“part of what made Britain great”.

For my constituents, the policy means that 50% of council housing will be sold off: 6,500 homes will be lost from the public sector in that way when there is an absolutely chronic shortage of decent housing and no one can afford private rents or owner occupation in my constituency. I do not believe that such homes will be replaced. Whenever homes are demolished, either they are not replaced or they are replaced by meaner versions at the side of private sites. The hon. Member for Richmond Park (Zac Goldsmith) let the cat out of the bag when he said that all the Tories will do is replace them with starter homes costing £450,000 and miles away from the areas in which such people are now living.

The attack on security of tenure is the most disgraceful thing in this Bill. Security of tenure is part of the social compact in this country, as Margaret Thatcher understood. When we had the Housing Acts 1985 and 1988, private tenancies were made insecure, which I regret, but assured tenancies and secure tenancies gave families something they could call a home. Why do this Government want to destroy that?

Finally, the largest development site in London— 24,000 new homes in Old Oak—is in my constituency. We are now told that they will be starter homes. Who will be able to afford homes at £450,000 each? The hon. Member for Richmond Park should be ashamed of himself. He cannot speak for London on this issue. The speech of my right hon. Friend the Member for Tooting (Sadiq Khan) shows that only one party and one candidate in the mayoral election will stand up for all Londoners in providing genuinely affordable housing in this country.

6.39 pm

Clive Efford: We will take no lectures from the Government on home ownership. It is at its lowest level for a generation and has gone down in every year under their tenure. They have to explain why they scrapped the £8.4-billion investment that was put into the programme in 2008 to build houses of all sorts, including affordable houses to buy, and cut it down to £660 million in their first Budget.

This is a war on social housing. For London, it is a war on traditional, long-standing, established working-class communities that have played their part in the economy of London for generations. There are several measures in the Bill that will wipe out the future of social housing. On planning, section 106 funding used to pay for most social housing, but will now pay for starter homes. There is the forced sale of housing association properties and the forced sale of high-value council housing properties

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to subsidise the rebuilding of housing association properties. We are yet to see the figures that prove that that is financially viable.

To the Government’s eternal shame, there is the removal of secure tenancies, with no mandate from the electorate whatsoever. There was no warning. We said that this was what the Tories wanted to do in 2010. We were told that we were lying. We are not lying now, are we, because it is exactly what they have done at the first opportunity to introduce it.

There is pay to stay. If someone goes out and increases their income or if the family income increases, they will be penalised with a higher rent. In what other social field would the Tories introduce a policy like that? It is just a war on social housing.

However, the Tories are prepared to subsidise home ownership. I am happy to see the subsidising of home ownership through various schemes, but it is not fair when the money is taken away from social housing. The Chartered Institute of Housing estimates that the cost of this measure will be £3.3 billion. We are yet to see where that money will come from.

The hon. Member for Richmond Park (Zac Goldsmith) says that there will be two-for-one replacement in Greater London. Where are the figures to show that that adds up? It is a fig leaf to cover his embarrassment at the Bill, which is disastrous for communities in London. It is an excuse written up on the back of the fag packet by Lynton Crosby, who is running his campaign. It will not work for people in London.

What the Tories do not understand is that social housing is an essential part of any major city’s economy. People need to live close to where they work. Particularly on the back of the fare increases that we have seen from this Tory Mayor, people cannot afford to do low income jobs, live in outer London and travel into central London. That is why low-cost social housing is so essential in areas of high land values in central London. The Tories do not understand it—they never have and they never will. They have always had a hatred of social housing. This is a Bill that Margaret Thatcher could not have dreamt of. It is a disaster for communities in London and I’ll tell you what: the Tories will rue the day that they did this.

Several hon. Members rose

Mr Speaker: I need speeches of nearer to three minutes, because I wish to call the hon. Member for Hornchurch and Upminster (Dame Angela Watkinson) and then to accommodate the hon. Members for Westmorland and Lonsdale (Tim Farron), for Brent North (Barry Gardiner) and for Sheffield, Brightside and Hillsborough (Harry Harpham).

6.43 pm

Dame Angela Watkinson (Hornchurch and Upminster) (Con): In welcoming this large and excellent Bill, I thank the Secretary of State, who fell short of accepting my new clause 5, but who has agreed to set up a working party to look into the reasons why so few local authorities use the powers that are available to them to collect tenure information via their council tax application forms. I believe that the information so collected would be extremely helpful to local authorities and tenants in identifying rogue landlords and letting agents, as well as

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housing benefit fraud, unregulated houses in multiple occupation, environmental health issues and other parts of the housing and planning function. I look forward to the working group making progress to ensure that those powers are exercised consistently across all local authorities.

6.44 pm

Tim Farron: It is right that the Government included a Housing Bill in the Queen’s Speech. Poor housing robs people of their freedom and liberty, and housing is the entry point to a civilised society. It is therefore a tragedy that in response to a broken market and chronic lack of supply, where we need 300,000 new builds a year over 10 years, where 1.6 million people are rotting on a council house waiting list, and where more than a quarter of 18 to 30-year-olds in this country are still living in the family home—

Peter Dowd (Bootle) (Lab) rose

Tim Farron: I probably should not give way to be fair to other Members who wish to speak.

It is a tragedy that the scale of this crisis is inverse to this Government’s puny ambition. Where is the designation of the five to 10 garden cities that are needed over this decade? Where is the increase in income and building capacity for housing associations? Instead, there is a decrease in their ability to raise funds to develop homes. Where is the increase in social housing that we desperately need to meet the needs of 1.6 million people? Instead there is a diversion of funds towards the wrong priorities. In short, we have 200,000 so-called starter homes, instead of 300,000 section 106 actual affordable homes. Right to buy is the second huge assault on affordable housing.

If we believe that aspiration is right and that the right to own one’s home is good and something to work towards, we should be allowing a like-for-like replacement in advance. If, by an act of vandalism, we want to destroy social housing, we should do what the Government are doing.

The hon. Member for Bromley and Chislehurst (Robert Neill) took offence at those on the Labour Front Bench who used the word “extreme”, but this Government’s actions towards rural communities are absolutely extreme. If we consider that three in four council houses in South Lakeland are now privately owned, and many are expensive private lets, we realise the damage done to rural Britain, not just in the lakes but in the west country and other parts of the UK. That shows a complete lack of understanding of rural Britain, as well as a failure to tackle the second homes crisis in those areas.

The Government acknowledged a broken market and made a choice to keep it broken. It is often said that there is nothing more stressful than the time we move home, because it is costly and psychologically difficult. Well, welcome to real Britain everyday life for millions of people who cannot afford their own home. The Government have looked those people in the eye. To govern is to choose, and they have chosen to let those people down. This Bill should fall.

6.47 pm

Barry Gardiner: There have been many good amendments to the Bill, but sadly they were the ones the Government rejected. New clauses 3 and 4 would have set right many

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of the inadequacies of the Commonhold and Leasehold Reform Act 2002, but they were rejected. New clause 52 —imagine, Mr Speaker, a clause to ensure that rented properties are fit for human habitation: defeated. Houses not fit for habitation were voted for by a Government not fit to govern. The Bill focuses on the abolition of social housing, both council and housing association owned, and it is a deliberate dismantling of the social rented sector.

Peter Dowd: Is my hon. Friend aware that as a result of this Bill, one of my local housing associations is preparing to sell off stock that is expensive to maintain as it becomes vacant, even if that is through auction, and it is incrementally moving out of the very areas it was supposed to serve?

Barry Gardiner: My hon. Friend makes a powerful point, and in my constituency 500 council homes in Brent would be at risk of forced sale, rather than going to people on the waiting list. We have 4,500 households on the waiting list in bands A to C. Band D has been abolished, and we have had to tell people that anyone in band D does not stand a chance of getting a home in Brent North. That is the scale of the problems we are facing, and the response that we have had from the Government is totally inadequate to meet the housing needs of people in London. High rent, lower than average incomes and a larger than average household size in my constituency means that affordability is a huge problem.

Council and housing association rents are to be cut by 1% a year. That is mixed news. According to the Institute for Fiscal Studies, it will help very few of the 3.9 million social tenants—it just comes off their housing benefit—but it is a great bonus for the Treasury. Some £1.7 billion will be removed from the housing benefit bill by leaving a disastrous hole in council and housing association finances. It is there, in the social rented sector, that the real price of this measure will be paid for and felt by tenants.

Future planning for housing development will have a greater and greater share of homeownership, rather than social rented housing. Communities will find themselves broken up by redevelopment or, in the long term, by the loss of secure tenancies, which have been a bedrock of stable neighbourhoods. I want children in my constituency to grow up knowing that in three years’ time they will be able to sit their GCSEs and their A-level exams at the same school they started off in at the age of 11. The Government are denying them that right. It used to be that an English family’s home was their castle—no longer.

6.51 pm

Harry Harpham (Sheffield, Brightside and Hillsborough) (Lab): I would like to focus on a couple of areas that I find especially concerning.

First, on the planned extension to the right to buy scheme, Ministers have made much of it being agreed to voluntarily by the National Housing Federation. Given that it was accepted only with the clear knowledge that similar measures would be forced on housing associations, there are some doubts as to

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how voluntary the agreement really was. After the Government strong-armed housing associations into this position, it is no wonder that they are sceptical.

Forcing local authorities to sell off their housing stock to pay for the policy means councillors are not exactly keen either. As the Tory-led Local Government Association pointed out, councils are best placed to respond to their area’s housing needs. It is disappointing that Ministers, who not so very long ago prided themselves as the champions of localism, are now tying councils’ hands while they raid town halls for the money to cover this counterproductive measure.

The Chartered Institute of Housing has suggested that sales of these high value properties will fall well short of expectations, to the tune of some £3.3 billion. More to the point, who will these high-value homes be sold to? If they are high value, then certainly they will not be sold to first-time buyers. Councils are incentivised to sell them at a price as dear as possible to make sure they can meet Treasury demands, so they will, more likely than not, end up in the hands of speculators or buy-to-let landlords. Council housing that was once leased at affordable rents will move out of the reach of people struggling to meet their housing costs.

The other area where the right to buy policy really falls down is on its lack of a requirement for replacement housing to be built on a like-for-like basis. As it stands, the Bill is far too weak on housing association replacements. There is no requirement for them to build a similar property to the one sold, or even to build it at the same end of the country. A third are now saying that they will stop building affordable homes altogether. Housing associations have always worked with a social ethos, but the Bill hollows that out to the point where commercial survival is all.

On council tenancies, the Bill legislates for insecurity. By forcing local authorities to offer only short-term tenancies, the Government are encouraging uncertainty and worry for low-income families. For council tenants, the house they live in is not an asset to be managed. It is a home. It is where they have raised their family. For those on low and very limited incomes, a secure tenancy represents safety, stability and a sense of belonging.

I will end with a few remarks about the private rented sector. From my own experiences as a councillor in Sheffield, I know there are many dedicated and genuinely caring private landlords whose professionalism does them great credit, but there is far too large a minority who see their often vulnerable tenants as cash cows and who have little thought for their responsibilities, other than turning up every week on the doorstep to collect the rent. Private renting is on the rise. One quarter of all families with children are private renting, and it is a national scandal that nearly one third of these properties do not meet the decent homes standard. The Government are to be congratulated on trying to get to grips with the problem, but the Bill could be so much bolder. A statutory requirement for private landlords to make sure their properties are up to scratch throughout the lifetime of a tenancy would give their tenants a decent level of security and allow for much swifter action to be taken against landlords who give the rest a bad name.

Question put, That the Bill be now read the Third time.

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The House divided:

Ayes 309, Noes 216.

Division No. 163]


6.55 pm


Adams, Nigel

Afriyie, Adam

Aldous, Peter

Allan, Lucy

Allen, Heidi

Amess, Sir David

Andrew, Stuart

Ansell, Caroline

Argar, Edward

Atkins, Victoria

Bacon, Mr Richard

Baker, Mr Steve

Baldwin, Harriett

Barclay, Stephen

Barwell, Gavin

Bebb, Guto

Bellingham, Sir Henry

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Berry, James

Bingham, Andrew

Blackman, Bob

Blackwood, Nicola

Blunt, Crispin

Boles, Nick

Bone, Mr Peter

Borwick, Victoria

Bradley, Karen

Brady, Mr Graham

Brazier, Mr Julian

Bridgen, Andrew

Brine, Steve

Brokenshire, rh James

Bruce, Fiona

Buckland, Robert

Burns, rh Sir Simon

Burrowes, Mr David

Burt, rh Alistair

Cairns, Alun

Campbell, Mr Gregory

Carmichael, Neil

Cartlidge, James

Caulfield, Maria

Chalk, Alex

Chishti, Rehman

Chope, Mr Christopher

Churchill, Jo

Clark, rh Greg

Clarke, rh Mr Kenneth

Cleverly, James

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Costa, Alberto

Cox, Mr Geoffrey

Crabb, rh Stephen

Crouch, Tracey

Davies, Byron

Davies, Chris

Davies, David T. C.

Davies, Dr James

Davies, Mims

Davies, Philip

Davis, rh Mr David

Dinenage, Caroline

Djanogly, Mr Jonathan

Donaldson, rh Mr Jeffrey M.

Donelan, Michelle

Dorries, Nadine

Double, Steve

Dowden, Oliver

Doyle-Price, Jackie

Drax, Richard

Drummond, Mrs Flick

Duddridge, James

Duncan, rh Sir Alan

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Mr Nigel

Evennett, rh Mr David

Fabricant, Michael

Fallon, rh Michael

Fernandes, Suella

Field, rh Mark

Foster, Kevin

Fox, rh Dr Liam

Frazer, Lucy

Freeman, George

Freer, Mike

Fuller, Richard

Fysh, Marcus

Gale, Sir Roger

Garnier, rh Sir Edward

Garnier, Mark

Gauke, Mr David

Gibb, Mr Nick

Gillan, rh Mrs Cheryl

Glen, John

Goodwill, Mr Robert

Gove, rh Michael

Graham, Richard

Grant, Mrs Helen

Grayling, rh Chris

Green, Chris

Green, rh Damian

Greening, rh Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Halfon, rh Robert

Hall, Luke

Hammond, rh Mr Philip

Hammond, Stephen

Hands, rh Greg

Harper, rh Mr Mark

Harris, Rebecca

Hart, Simon

Haselhurst, rh Sir Alan

Hayes, rh Mr John

Heald, Sir Oliver

Heaton-Harris, Chris

Heaton-Jones, Peter

Henderson, Gordon

Herbert, rh Nick

Hinds, Damian

Hoare, Simon

Hollingbery, George

Hollinrake, Kevin

Hollobone, Mr Philip

Holloway, Mr Adam

Hopkins, Kris

Howarth, Sir Gerald

Howell, John

Howlett, Ben

Huddleston, Nigel

Hunt, rh Mr Jeremy

Hurd, Mr Nick

Jackson, Mr Stewart

James, Margot

Javid, rh Sajid

Jayawardena, Mr Ranil

Jenkin, Mr Bernard

Jenkyns, Andrea

Jenrick, Robert

Johnson, Boris

Johnson, Gareth

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kinahan, Danny

Knight, rh Sir Greg

Knight, Julian

Kwarteng, Kwasi

Lancaster, Mark

Latham, Pauline

Leadsom, Andrea

Lee, Dr Phillip

Lefroy, Jeremy

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Lewis, rh Dr Julian

Liddell-Grainger, Mr Ian

Lidington, rh Mr David

Lilley, rh Mr Peter

Lopresti, Jack

Lord, Jonathan

Loughton, Tim

Lumley, Karen

Mackinlay, Craig

Mackintosh, David

Main, Mrs Anne

Mak, Mr Alan

Malthouse, Kit

Mann, Scott

Mathias, Dr Tania

May, rh Mrs Theresa

Maynard, Paul

McCartney, Jason

McCartney, Karl

McLoughlin, rh Mr Patrick

McPartland, Stephen

Menzies, Mark

Mercer, Johnny

Merriman, Huw

Metcalfe, Stephen

Miller, rh Mrs Maria

Milling, Amanda

Mills, Nigel

Milton, rh Anne

Mordaunt, Penny

Morgan, rh Nicky

Morris, Anne Marie

Morris, David

Morris, James

Morton, Wendy

Mowat, David

Mundell, rh David

Murray, Mrs Sheryll

Murrison, Dr Andrew

Neill, Robert

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

Offord, Dr Matthew

Opperman, Guy

Parish, Neil

Patel, rh Priti

Paterson, rh Mr Owen

Pawsey, Mark

Penning, rh Mike

Penrose, John

Percy, Andrew

Perry, Claire

Phillips, Stephen

Philp, Chris

Pincher, Christopher

Pow, Rebecca

Prentis, Victoria

Prisk, Mr Mark

Pritchard, Mark

Pursglove, Tom

Quin, Jeremy

Quince, Will

Raab, Mr Dominic

Rees-Mogg, Mr Jacob

Robertson, Mr Laurence

Robinson, Gavin

Robinson, Mary

Rosindell, Andrew

Rudd, rh Amber

Rutley, David

Scully, Paul

Selous, Andrew

Shannon, Jim

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Simpson, David

Skidmore, Chris

Smith, Chloe

Smith, Henry

Smith, Julian

Smith, Royston

Soames, rh Sir Nicholas

Solloway, Amanda

Soubry, rh Anna

Spelman, rh Mrs Caroline

Spencer, Mark

Stephenson, Andrew

Stevenson, John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Graham

Sturdy, Julian

Sunak, Rishi

Swayne, rh Mr Desmond

Swire, rh Mr Hugo

Syms, Mr Robert

Thomas, Derek

Throup, Maggie

Tolhurst, Kelly

Tomlinson, Justin

Tomlinson, Michael

Tracey, Craig

Trevelyan, Mrs Anne-Marie

Truss, rh Elizabeth

Tugendhat, Tom

Turner, Mr Andrew

Tyrie, rh Mr Andrew

Vara, Mr Shailesh

Vickers, Martin

Villiers, rh Mrs Theresa

Walker, Mr Charles

Walker, Mr Robin

Wallace, Mr Ben

Warburton, David

Warman, Matt

Watkinson, Dame Angela

Wharton, James

Whately, Helen

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, rh Mr John

Wiggin, Bill

Williams, Craig

Williamson, rh Gavin

Wilson, Mr Rob

Wilson, Sammy

Wollaston, Dr Sarah

Wood, Mike

Wragg, William

Wright, rh Jeremy

Zahawi, Nadhim

Tellers for the Ayes:

Sarah Newton


Simon Kirby


Abbott, Ms Diane

Abrahams, Debbie

Alexander, Heidi

Anderson, Mr David

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Barron, rh Kevin

Beckett, rh Margaret

Benn, rh Hilary

Berger, Luciana

Betts, Mr Clive

Blomfield, Paul

Bradshaw, rh Mr Ben

Brake, rh Tom

Brown, Lyn

Bryant, Chris

Buck, Ms Karen

Burgon, Richard

Burnham, rh Andy

Butler, Dawn

Byrne, rh Liam

Cadbury, Ruth

Campbell, rh Mr Alan

Campbell, Mr Ronnie

Champion, Sarah

Chapman, Jenny

Clegg, rh Mr Nick

Coaker, Vernon

Coffey, Ann

Cooper, rh Yvette

Corbyn, rh Jeremy

Cox, Jo

Coyle, Neil

Crausby, Mr David

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Dakin, Nic

David, Wayne

Davies, Geraint

De Piero, Gloria

Doughty, Stephen

Dowd, Jim

Dowd, Peter

Dromey, Jack

Dugher, Michael

Durkan, Mark

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Ellman, Mrs Louise

Esterson, Bill

Evans, Chris

Farrelly, Paul

Farron, Tim

Field, rh Frank

Fitzpatrick, Jim

Flello, Robert

Fletcher, Colleen

Flint, rh Caroline

Fovargue, Yvonne

Foxcroft, Vicky

Gardiner, Barry

Glass, Pat

Glindon, Mary

Godsiff, Mr Roger

Goodman, Helen

Green, Kate

Greenwood, Lilian

Greenwood, Margaret

Griffith, Nia

Gwynne, Andrew

Haigh, Louise

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harpham, Harry

Harris, Carolyn

Hayes, Helen

Healey, rh John

Hendrick, Mr Mark

Hepburn, Mr Stephen

Hermon, Lady

Hillier, Meg

Hodgson, Mrs Sharon

Hoey, Kate

Hollern, Kate

Hopkins, Kelvin

Howarth, rh Mr George

Hunt, Tristram

Huq, Dr Rupa

Hussain, Imran

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Gerald

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Kane, Mike

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Khan, rh Sadiq

Kinnock, Stephen

Kyle, Peter

Lamb, rh Norman

Lammy, rh Mr David

Lavery, Ian

Leslie, Chris

Lewell-Buck, Mrs Emma

Lewis, Clive

Lewis, Mr Ivan

Long Bailey, Rebecca

Lucas, Caroline

Lucas, Ian C.

Lynch, Holly

Mactaggart, rh Fiona

Madders, Justin

Mahmood, Mr Khalid

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marris, Rob

Marsden, Mr Gordon

Maskell, Rachael

Matheson, Christian

McCabe, Steve

McCarthy, Kerry

McDonagh, Siobhain

McDonald, Andy

McDonnell, Dr Alasdair

McDonnell, John

McFadden, rh Mr Pat

McGinn, Conor

McGovern, Alison

McInnes, Liz

McKinnell, Catherine

McMahon, Jim

Miliband, rh Edward

Moon, Mrs Madeleine

Morden, Jessica

Morris, Grahame M.

Mulholland, Greg

Murray, Ian

Nandy, Lisa

Onn, Melanie

Onwurah, Chi

Osamor, Kate

Owen, Albert

Pearce, Teresa

Pennycook, Matthew

Perkins, Toby

Phillips, Jess

Pound, Stephen

Powell, Lucy

Pugh, John

Qureshi, Yasmin

Rayner, Angela

Reed, Mr Steve

Rees, Christina

Reynolds, Emma

Reynolds, Jonathan

Rimmer, Marie

Ritchie, Ms Margaret

Robinson, Mr Geoffrey

Rotheram, Steve

Ryan, rh Joan

Saville Roberts, Liz

Sharma, Mr Virendra

Sheerman, Mr Barry

Sherriff, Paula

Shuker, Mr Gavin

Siddiq, Tulip

Skinner, Mr Dennis

Slaughter, Andy

Smeeth, Ruth

Smith, rh Mr Andrew

Smith, Angela

Smith, Cat

Smith, Jeff

Smith, Nick

Smith, Owen

Spellar, rh Mr John

Starmer, Keir

Stevens, Jo

Streeting, Wes

Stringer, Graham

Stuart, rh Ms Gisela

Tami, Mark

Thomas, Mr Gareth

Thomas-Symonds, Nick

Thornberry, Emily

Timms, rh Stephen

Trickett, Jon

Turley, Anna

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Watson, Mr Tom

West, Catherine

Whitehead, Dr Alan

Williams, Mr Mark

Wilson, Phil

Winnick, Mr David

Winterton, rh Dame Rosie

Woodcock, John

Wright, Mr Iain

Zeichner, Daniel

Tellers for the Noes:

Judith Cummins


Sue Hayman

Question accordingly agreed to.

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Business without Debate

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Landlord and Tenant

That the Agricultural Holdings Act 1986 (Variation of Schedule 8) (England) Order 2015, dated 24 November 2015, a copy of which was laid before this House on 2 December 2015, be approved.—(Margot James.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Terms and Conditions of Employment

That the draft National Minimum Wage (Amendment) Regulations 2016, which were laid before this House on 7 December 2015, be approved.—(Margot James.)

Question agreed to.

12 Jan 2016 : Column 829

Connaught Income Fund

Motion made, and Question proposed, That this House do now adjourn.—(Margot James.)

7.10 pm

Guto Bebb (Aberconwy) (Con): Before we get into the detail of the questions I want to ask the Minister, I think it is important for me to provide some context and background on the issue.

The Connaught Income Fund Series 1 was established in April 2008. The aim of the fund was to invest in bridging loans, primarily through a company called Tiuta International Ltd. Regulatory demands resulted in the fund being operated by a Financial Services Authority-regulated firm. In the case of Connaught the initial operator was Capita Financial Managers Ltd.

Capita issued the first investment memorandum as the fund’s promoter under section 21 of the Financial Services and Markets Act 2000 in April 2008. In September 2009 Capita Financial Managers resigned and the role of the operator was transferred to Blue Gate Capital management. At the time this decision was taken, a meeting between representatives of Capita Financial Managers and Capita plc was held. Minutes of this meeting, which are in the public domain, confirm that Capita was, at the very least, concerned about Tiuta’s financial viability and was aware of the false representations promoted to investors within the information memorandum. However, despite this level of knowledge and concern about the viability of Tiuta and the improper use of moneys invested in the fund, Capita, upon transferring the operator status to Blue Gate Capital management, did not inform existing investors of its concerns. That is despite the fact that Capita did write to existing investors informing them of the change of operator.

Jim Shannon (Strangford) (DUP): I congratulate the hon. Gentleman on securing this debate, and the number of Members who are present is an indication of the interest in this issue. Does he agree that the Financial Conduct Authority should publish the issues that resulted in it withdrawing from negotiations with Connaught and other parties so that, importantly, those who lost out in the collapse of this fund can know who they have cause to claim against and to blame?

Guto Bebb: The hon. Gentleman makes an important point that I will come on to. Indeed, the need for information as to why that decision was taken is something I will be asking the Minister to comment on.

Graham Stuart (Beverley and Holderness) (Con): I, too, congratulate my hon. Friend on championing this issue. I have been contacted by constituents. They want to know why the FCA is taking so long conducting its inquiry and when they are going to get information about what is going on within it. They want to be confident that the inquiry is being properly conducted and to see a resolution of this unpleasant and long-running saga.

Guto Bebb: My hon. Friend has summarised my speech in a pithy intervention.

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It is important to highlight that when the transfer of operator happened, the subsequent information memorandum issued by Blue Gate was virtually identical to the original information memorandum issued by Capita, and for a further 10 months, more or less, investors’ funds going into Connaught were still managed by Capita IRG Trustees Ltd, which handled investors’ money while Blue Gate waited to receive authority from the FSA to handle client funds.

The whole issue becomes even more concerning because in January 2011 a whistleblower—none other than the chief executive of Tiuta, George Patellis—contacted the FSA to make a principle 11 notification in relation to the misuse of fund moneys by Tiuta. In March 2011 George Patellis met Ian Conway from the FSA to highlight evidence of mismanagement and the fraudulent use of investor funds. He provided ample evidence to support his claims.

Kirsten Oswald (East Renfrewshire) (SNP): Does the hon. Gentleman share my concern that, after five years, the regulatory authorities appear to have made little progress on securing justice for the 1,500 investors, including my constituent George Devon, who lost money in what should have been a secure investment fund? They have made even less progress on working out who to hold to account for the disappearance of more than £100 million. Will he join me in calling for a comprehensive review of the regulatory framework, which is supposed to protect small-scale investors but fails to do so?

Guto Bebb: I will join the hon. Lady in that call, and I agree entirely with her comments.

On 26 May 2011, three months after the whistleblower provided evidence of wrongdoing, the FSA finally published a note on its website stating that the fund should not be compared to a bank or building society account. That was remarkable, considering that it had been provided with evidence of wrongdoing. In the light of that evidence, it is difficult not to argue that a stronger warning should have been provided to investors by the FSA.

Mims Davies (Eastleigh) (Con): Does my hon. Friend agree that many of our constituents have waited a long time for this investigation, despite the whistleblowers? This debate provides an excellent opportunity for us to urge the Financial Conduct Authority to set out a clear timescale. It is only right and proper that full clarity should be given to all our constituents—we can see the large number of Members present in the Chamber tonight—about the scope, nature and timing of this full and much needed investigation.

Guto Bebb: Absolutely. My hon. Friend has just covered part of my speech very well, and I agree entirely with her comments.

Despite the warnings, and the acknowledgment of those warnings by a note that was issued on the FSA’s website, money was still being invested in the fund for a further 10 months. That is scandalous.

Mrs Cheryl Gillan (Chesham and Amersham) (Con): I congratulate my hon. Friend on calling this debate. It is obvious that there is interest across the House in this matter. Is not the situation made even more dreadful by the fact that constituents like mine who invested £100,000

12 Jan 2016 : Column 831

in 2011 did not receive those warnings earlier? One of the financial advisers who advised several people to invest in the fund is based in my constituency. They are now exposed and they want timely and transparent answers from the FCA. Everything seems to have been concealed in this case.

Guto Bebb: I am grateful to my right hon. Friend for that intervention. I will come on to the way in which independent financial advisers have been badly treated under the regulatory framework in this regard.

Bill Wiggin (North Herefordshire) (Con): Does my hon. Friend agree that the new body, the FCA, is as toothless as ever and that it is more likely to refer people to the ombudsman than to do anything itself? Will he urge the Government to change that?

Guto Bebb: I regret that I have to agree with my hon. Friend. The financial ombudsman service is too often seen as an option by the FCA when problems are brought to its attention. Unfortunately, I also have some comments to make on the performance of the ombudsman in relation to this issue.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): I am extremely grateful to the hon. Gentleman for calling this debate. It is unacceptable that people such as my constituent Paramjit Tank, whose family invested some £60,000 in the fund over three years, do not know what has happened to their money. Whatever authorities we have set up, those people are in limbo. Their money has gone and they do not know what is going to happen next.

Guto Bebb: The hon. Lady speaks for all of us in this regard, and the constituents who are the worst affected are often old and vulnerable and have invested their life savings in the scheme. I share her concerns.

In March 2012, the fund was finally suspended. It is important to point out, however, that more than half the investment in the fund was invested after the original warnings had been given to the FSA. That issue needs to be addressed. The fund went into administration in May 2012 and finally entered liquidation in December 2012.

When I first came across this matter through my constituency casework, most interested parties and stakeholders were complaining that the FSA—and subsequently the FCA—were unresponsive to their concerns. However, that situation appeared to change following the establishment of the all-party parliamentary group on the Connaught Income Fund. At its first meeting in July 2014, the FCA’s director of supervision, Linda Woodall, announced unilaterally that the FCA would facilitate negotiations between the liquidators of the fund and the former operators of the fund, Blue Gate and Capita. This was not a perfect solution, but it offered the hope that some redress and compensation would be offered to investors. That commitment was made during the APPG meeting, but again a question arises: given that a warning was made by a whistleblower so much in advance of this fund being suspended, should the FCA be looking not just at contributions

12 Jan 2016 : Column 832

towards compensation from the operators of the fund, but at itself? Did the FCA owe the investors a duty of care?

Mrs Caroline Spelman (Meriden) (Con): As a member of the APPG, will my hon. Friend say how concerning it is that there has been no communication from the FCA since March 2015? This long period of anxiety for our constituents is what is really troubling so many of us.

Guto Bebb: As the chair of the APPG, I have felt extremely frustrated when Conservative and Opposition Members have asked me for an update, as I am unable to offer one, because there is nothing to be said.

Dame Angela Watkinson (Hornchurch and Upminster) (Con): I, like most colleagues here, have had correspondence with constituents who have lost considerable amounts of savings, with this often changing the direction of their lives as the amounts are so significant. Does my hon. Friend share my hope that the strength of feeling being shown in this Chamber today will force some urgency to be put into finding a solution to this?

Guto Bebb: Again, I fully agree with my hon. Friend’s comments, and I do think that tonight’s turnout indicates the concern across the House on this issue. It is important to point out again that the proposed mediation was described as the fastest way of getting some compensation to investors, which is why the APPG welcomed it, although with some reservations. A deadline date of 31 October 2014 was offered for the completion of that mediation. Subsequently, in November 2014 the FCA announced a new date of the end of January 2015, and then in January 2015 it announced a new date of the end of March.

On 9 March 2015, I was asked to meet Martin Wheatley, the now former chief executive of the FCA, in Portcullis House, where I was informed that the FCA was withdrawing from the mediation process—that was announced the following day. Again, the decision was unilateral. In effect, the decision to go for mediation was a unilateral one made by the FCA without consulting other stakeholders, as was the decision to end the mediation. As chair of the APPG, I think it essential that the FCA explains why it took those decisions. It needs to explain why it thought it was better to end the mediation rather than continue with a method of dealing with this issue that it had claimed would be the most effective way to proceed.

John Glen (Salisbury) (Con): My hon. Friend is getting to the crux of the matter. For an organisation that many of our constituents see as being an appropriate regulator and an arbiter of what should happen, this lack of accountability is totally unacceptable. The number of vulnerable people who are reliant on this organisation to act wisely means that it is outrageous that this situation is allowed to continue. Does he agree that urgent action needs to be taken by the Minister to ensure that the FCA steps up to the mark immediately?

Guto Bebb: I agree entirely with my hon. Friend, who has been a firm supporter of the APPG since its establishment. He makes the point we wish to make: we might be annoyed that the all-party group has not been

12 Jan 2016 : Column 833

kept informed, but we should be outraged that the investors and the stakeholders involved in the fund have also been treated with such disrespect.

Alex Chalk (Cheltenham) (Con): May I declare an interest, Mr Speaker? As a barrister, I was instructed by the FCA to prosecute serious Ponzi fraud. I agree with my hon. Friend that this is about clarity and certainty; it is only by being clear that the investigation is being concluded that investors who have been left in limbo can get the certainty they deserve.

Guto Bebb: Again, I fully endorse those comments. We are in this House this evening almost giving a cry for help to the Minister, where the all-party group and Members of Parliament have failed to deliver on behalf of their constituents. I sincerely hope that she can intervene and ensure that at least a degree of clarity is offered.

Liz Saville Roberts (Dwyfor Meirionnydd) (PC): I wish to raise a wider issue. Unregulated collective investment schemes are not permitted to be marketed to the general public, as one would expect, but does the hon. Gentleman not agree that this needs proper enforcement and that it may not always take place?

Guto Bebb: That is a point that I subscribe to and agree with, and it should be considered in due course.

The questions that I have for the Minister are pretty clear. First, in view of the FCA’s recent decision to cancel its proposed review of banking standards and culture, can we have a guarantee that the investigation will be completed by the FCA? Many people affected by this issue have contacted me, expressing their concern that, in view of the delays and the lack of information from the FCA, the review will be completed.

Secondly, the FCA unilaterally withdrew from the mediation process, without any consultation with stakeholders or investors. Can the Minister assure us that the FCA will, upon completion of its investigations, publicly justify its decision to curtail the process of mediation and the subsequent delay in compensation and redress?

Thirdly, it has also been implied that the reason for curtailing the mediation process was a result of a realisation within the FCA that the financial compensation on offer from the mediation process would not be sufficient. Is that the case? As we have had no clarity or confirmation that that is the case, will the Minister give us some assurances on the matter? If it is not the case, will the FCA be able to explain why it therefore curtailed the mediation?

Liz McInnes (Heywood and Middleton) (Lab): I wish to add my voice to those of other hon. Members who have expressed concerns on behalf of their constituents. I also wish to express the request of my constituent, Mel Carney, who says:

“I have already waited over three years to learn what has happened to my money.”

He is asking for transparency from the FCA and for the investigation to be concluded in a timely manner.

Guto Bebb: The hon. Lady has asked my fourth and fifth questions.

12 Jan 2016 : Column 834

My fourth question is this: 10 months after the mediation was cancelled, are we in a position to get an update from the FCA, and if we are, how soon can that update be offered? Finally, we need an end date. We need to know when this investigation will be completed. I ask the Minister to implore the FCA to provide that information.

Peter Aldous (Waveney) (Con): I understand this situation very well. My constituent, Charles Rodbourne, has lost the bulk of his life savings. This scandal has been going on for seven years now. Will my hon. Friend urge the Minister to do all she can to bring it to a conclusion as swiftly as possible, as so many people across this country are affected?

Guto Bebb: I join my hon. Friend in urging the Minister to do just that. In relation to my five questions, I think that the FCA has hidden behind its claims that, because this is a live investigation, it is not in a position to comment. Will the Minister confirm that there is in fact no statutory reason why the FCA cannot provide a progress report for those who are interested in this issue?

Finally, it is important to address the matter, which is of ongoing concern, of the way in which the IFA community is being treated by the regulatory authorities in relation to the Connaught issue. The situation at the moment is that there are emails and other information in the public domain that imply that the Financial Ombudsman Service, when it is dealing with complaints about Connaught, is instructing its caseworkers to find against IFA regardless of the facts of the matter, and indeed regardless of the fact that there is an inquiry and an investigation into possible fraudulent wrongdoing within Connaught in the first instance.

It is entirely appropriate that independent financial advisers should be held to account for any poor advice offered. However, that would demand that each case, or each complaint brought to the FOS, is considered on merit. The instructions to FOS officials to ignore such evidence of wrongdoing and the on-going investigation into what happened in Connaught makes it very difficult for us to have any confidence in the decisions made by FOS in relation to complaints against individual IFAs.

I understand the need to ensure that both the FOS and the FCA operate independently of each other. However, is it too much to ask that they at least consider each other’s actions before making decisions that are clearly based upon only a partial understanding of the facts?

Ruth Cadbury (Brentford and Isleworth) (Lab): I congratulate the hon. Gentleman on securing this debate, because I, too, have constituents who have been affected by this matter, including Anna Hughes who lost 90% of her investment and three years of interest. Is it not right that our constituents who have been affected by the Connaught scheme should have confidence not only in the process of investigation and resolution on this issue, but in the financial system and in the belief that their investments are safe wherever they put them?

Guto Bebb: Again, I would agree with those comments.

If blanket decisions are being made on the basis of rules that do not take into account individual cases, I ask the Minister to ask whether the FOS and the FCA

12 Jan 2016 : Column 835

are acting properly and fairly as regards their duty of care towards independent financial advisers. The debate has shown, if nothing else, that there is a degree of concern across the House. I apologise to the Minister for having over-extended my allotted time, and I will therefore sit down and allow her to answer some of the very important questions that have been raised by colleagues.

7.30 pm

The Economic Secretary to the Treasury (Harriett Baldwin): I congratulate my hon. Friend the Member for Aberconwy (Guto Bebb) on securing this debate, chairing the all-party group and raising the serious issues concerning the Connaught Income Fund. His constituents and, clearly, those of many other colleagues have been seriously affected by this event and have written to me many times.

Many investors have lost substantial sums and, indeed, sometimes their life savings as a result of the events involving the Connaught funds. I am very much aware that that has caused real hardship for people across the country. It is important that the FCA and the all-party group get to the bottom of this matter and try to secure the best outcome for investors in these funds. Those who are responsible should face justice for their actions. It is equally important that steps are taken to ensure that this situation does not arise again in the future.

I reassure my hon. Friend and all other Members that the Financial Conduct Authority takes this matter extremely seriously.

Kirsten Oswald rose

Harriett Baldwin: Given the shortness of time, I will make a bit of progress. If I have time, I will come back to the hon. Lady.

The FCA also knows that what happened with the Connaught funds has caused serious distress to many investors and continues to work closely on this case to secure the best possible outcome. As my hon. Friend the Member for Aberconwy said, the Connaught funds comprised three separate funds, income series 1, series 2 and series 3. In total, approximately £147 million was invested in the funds, which, as we know, were unregulated collective investment schemes. By definition, such schemes are not subject to direct regulation by the FCA or, previously, by the Financial Services Authority.

In the case of Connaught investment funds, many of the usual protections and safeguards that protect investors in regulated funds were absent, owing to the unregulated nature of some of the entities involved. On this point, I want to touch on two main issues. The first concerns the actions taken by the FCA to try to protect consumers, despite most of the entities involved being unregulated. That includes the ongoing work to secure a fair and proper outcome for investors. The second involves the steps that can be taken to ensure that this sort of situation does not happen again.

First, despite the schemes’ being unregulated, the FCA has taken a number of significant steps to try to protect customers right from when the first problems arose. In May 2011, the FCA, which was at the time the FSA, altered Tiuta’s permissions on issuing new regulated

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mortgage lending. Shortly thereafter, it wrote to investors who might have been mis-sold the fund and all financial advisers who sold the fund, asking them to review the sales and to contact customers where there may have been the risk of unsuitable advice. The FCA has continued to provide updates on the situation via its website. Once the funds were suspended and steps were taken to wind them down, the FCA announced on 16 July 2014 that it would support a negotiated settlement to address investor losses.

As hon. Members may know, the FCA initially supported the negotiations between the parties involved, as it believed that doing so was in the best interests of investors. However, having extended the negotiations more than once, in March 2015 the FCA announced its decision to withdraw from them. The FCA decided that a further extension to the negotiation period was not in the best interests of investors. I am sure my hon. Friend will understand that as the negotiations were voluntary and confidential, the FCA cannot provide specific details on what happened during the negotiations.

Mr David Hanson (Delyn) (Lab): Will the Minister give way?

Harriett Baldwin: I have so little time.

The FCA is now conducting formal investigations into the activities of the two operators of the fund, Capita Financial Managers Ltd and Blue Gate Capital Ltd. My hon. Friend questions the length of time that the FCA is likely to take in order to conduct and conclude its investigations. Although it is too early to give a reliable estimate of the likely time frame for their conclusion, the FCA has assured me that it intends to progress the investigations efficiently and effectively. The length of time it will take to complete the investigations is affected by, among other things, the level of co-operation received from those under investigation and any related third parties.

As the FCA is in the process of carrying out its investigations it is, of course, not possible to comment on their likely outcome. The FCA is unable to provide any comment on what the level or form of compensation to investors may be if it is found that the operators have contravened any regulatory principles or rules.

Mr David Nuttall (Bury North) (Con): Will my hon. Friend please give way?

Harriett Baldwin: I have so little time, but I will try to make progress and then give way.

The FCA is an independent, non-governmental body, so I am sure my hon. Friend the Member for Aberconwy will agree that for me to interfere in its investigations in any way would not be appropriate.

My hon. Friend raised the question of whether the Financial Ombudsman Service has indicated a pre-determination to find against independent financial advisers, regardless of the allegations of fraudulent behaviour within the fund. It is important to note that like the FCA, the Financial Ombudsman Service is an independent, non-governmental body. It provides an independent dispute resolution service for consumers with individual complaints against financial services companies. In view of this independence, it would not be appropriate for the Government to comment or

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intervene in the Financial Ombudsman Service’s work on complaints against advisers who sold the Connaught Income Fund.

However, although I cannot provide comment on these details of these investigations, I am assured that the FCA has put considerable resources, time and effort into trying to achieve a good outcome for the investors affected by the failure of the fund, and that it continues to act in the best interests of the investors.

Mary Robinson (Cheadle) (Con): Will my hon. Friend give way?

Harriett Baldwin: I shall give way to the hon. Member for East Renfrewshire (Kirsten Oswald) first.

Kirsten Oswald: I am grateful to the hon. Lady for giving way. In response to a written question I was referred to the record of ministerial meetings to find out when a Treasury Minister last met representatives of the FCA. Does the Minister understand my astonishment at finding not a single bilateral meeting between the Treasury at ministerial level and the FCA in the two years from October 2013 to September 2015? Does she appreciate that her Government seem to be asleep at the wheel as the FCA fails to clean up the financial services sector?

Harriett Baldwin: The hon. Lady has been assiduous in tabling a number of parliamentary questions. I think I am right in saying that they have been put on the record in the Library. I encourage other hon. Members to have a look and see the record that she has managed to get from the FCA in writing.

I am sure that other hon. Members who have constituents who have suffered losses in the Connaught Income Fund will welcome the reassurance that the FCA is doing its utmost to secure the best possible outcome for investors, and that they will support the FCA in its current investigations.

Mr Nuttall: I appreciate that the Minister does not want to comment, but given the strength of feeling this evening, will she please pick up the phone in the morning to Tracey McDermott, the interim head of the FCA,

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and make it absolutely clear that we want some action on behalf of our constituents and we want this matter sorted out now?

Harriett Baldwin: I am sure my hon. Friend would not want me to interfere in a number of different FCA matters, but I am quite sure that the FCA will have seen the strength of feeling in the Chamber this evening.

I have one minute left so I will take a quick intervention.

Mary Robinson: I am grateful to my hon. Friend. Does she agree that at the heart of this are many elderly people who have done the right thing all their lives, saved for their retirement and gone, like my constituents, to an IFA, and now it is time for the FCA to do the right thing for them?

Harriett Baldwin: There clearly is a lot to investigate in this case. As I said, the FCA is doing its utmost to secure the best possible outcome for investors.

I would like to reassure hon. Members about the steps that have been taken to ensure that this situation does not occur again. The FCA has brought in new rules banning the promotion of unregulated collective investment schemes to ordinary retail investors. Independent financial advisers should not be selling unregulated investment schemes to retail investors. The circumstances in which unregulated schemes can be promoted to consumers are generally restricted to certain types of qualifying investors, such as those who have a high level of understanding about investments, or high net worth individuals, for whom those products are likely to be more suitable. That is an important step to take in ensuring that such a situation does not occur in the future.

I thank my hon. Friend the Member for Aberconwy once again for raising these important issues. His all-party group plays an incredibly important role in the parliamentary scrutiny of what the FCA is investigating, and I hope we can move forward and secure redress for his constituents and others.

Question put and agreed to.

7.40 pm

House adjourned.