Homes for All: Five-year Plan

Part of the debate – in the House of Commons at 3:30 pm on 24th January 2005.

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Photo of Caroline Spelman Caroline Spelman Shadow Secretary of State for Communities and Local Government 3:30 pm, 24th January 2005

I appreciate the apology that the Deputy Prime Minister gave, but I had only just about enough time to count the 20 pages of his statement.

We need to be clear that the statement is necessary because of the crisis in housing—a crisis that has spiralled out of control and is largely of the Government's own making. Under this Government, homelessness has increased by a third, and record numbers of people are living in bed-and-breakfast accommodation. It is disingenuous to single out families with children, because overall the number is a record. The amount of social housing being built has nearly halved and the resultant hike in house prices has taken home ownership beyond the reach of a whole generation of young people.

The stealth taxes introduced by this Government have had a disastrous effect for first-time buyers. The 70 per cent. increase in council tax, the extra £1,200 stamp duty facing the average first-time buyer and the abolition of mortgage tax relief all combine to make home ownership a near impossibility for hundreds of thousands of people each year. The Halifax review, published on Saturday, could not have been more damning, as it showed that nine out of 10 towns are now unaffordable for first-time house buyers.

Perhaps the Deputy Prime Minister could start his reply by offering an apology to all those people who took the Prime Minister at his word when he claimed to understand

"the very human aspiration to own your own home".

There are two key themes in this statement: the proposal for a pale imitation of right to buy for housing association tenants, and the Deputy Prime Minister's scheme to produce £60,000 houses on public land. That is ironic, given that in 1995 the Housing Corporation funded the provision of nearly 17,000 low-cost homes, whereas under Labour that has fallen to fewer than 3,500.

I have to admit some surprise at hearing what the Deputy Prime Minister had to say on the sale of equity in social housing. At the last Labour party conference, he declared that housing association homes were "not for sale". He said that

"it ain't going to happen".

Well, now it is being spun in the media that it is going to happen. His Minister of State said this morning that people could buy an equity share. Will the Deputy Prime Minister clarify whether that will be up to 100 per cent.?

This statement represents not so much a change of heart as a change in who has control over the Government's housing policy. The Chancellor of the Duchy of Lancaster, Mr. Milburn, is well known as an admirer of the long-established Conservative policy of allowing housing association tenants to buy their homes, and the Deputy Prime Minister has consistently been opposed to it.

Let us look at the implications for housing association tenants. Are not the Government guilty of treating housing association tenants as second-class citizens by limiting their right to buy equity? Did the Deputy Prime Minister really mean that they could buy as little as a 50 per cent. stake in the equity of their home—or will that be the minimum threshold? On a practical level, will he confirm that housing association tenants who have bought an equity share will have to secure permission from the charity or association before doing any work on their homes? Will that not effectively remove one of the main advantages of home ownership?

I must say that if I were a housing association tenant, I would be pretty confused about these proposals. Will such tenants have the right to buy on the same terms as council tenants? If they will, why do the Government not just adopt Conservative proposals for a full right to buy and the right to shared equity all the way up to 100 per cent.?

As for the associations themselves, the proposal denies them the significant capital receipts from outright sales that are crucial if they are to invest in new stock. What measures will the Deputy Prime Minister implement to deregulate housing associations, because without more freedom and flexibility, they will simply find themselves with a declining asset base without the flexibility to respond that our policy would give them? Conservative Members have pledged to reduce the eight regulatory regimes that oversee housing associations and reduce the costs imposed on them by the Government so that they can invest and innovate to generate new housing stock.

Let us turn to the other principal aspect of today's announcement: the provision of cheap houses for key workers. How does the Deputy Prime Minister define "key worker"? Just recently, I received a letter from a nurse who works in a GP practice, yet does not qualify for the Government's much-vaunted key worker scheme. Surely that is absurd.

How can the Deputy Prime Minister explain the inconsistency between the Chancellor's plans to sell off land in public ownership and his plans to build cheap homes on that land? By the Government's own arithmetic, the market value of the land will be about £71,000 per plot, so building 60,000 key worker homes—the figure touted in the press—under the scheme on publicly owned land will mean that the Treasury will forgo £4.2 billion of asset sales that were already pencilled in over the next few years. That represents a sizeable chunk of the total asset sales identified by the Lyons report, and it will create an even deeper black hole in the Government's finances, which could only be bridged with more third-term tax rises. Why are the Government obsessed with building key worker ghettos on public land when good shared equity schemes can make good-quality homes affordable for all?

Up to now, the Government's sole answer to the housing crisis has been to concrete over more and more green fields in the vain hope that supply will eventually match demand and bring house prices down. Today's announcement is essentially an admission that that approach, on its own, is doomed to fail. How can the Deputy Prime Minister expect to be taken seriously on the green belt? He has expanded it in areas where, in the words of the House of Commons Library,

"development pressure is not greatest," while allowing more than 170 permissions to concrete over the green belt. How can he possibly portray himself as the "guardian" of the green belt?

Yet still, the Deputy Prime Minister is determined to steamroller ahead with plans to impose massive housing targets on the countryside. The statement advocates again sustainable communities. What does he understand by the word, "sustainable"—surely not slapping down hundreds of thousands of new homes in a region of the United Kingdom that has 30 per cent. less water resources than 10 years ago?

There are many ways in which the Government can help people to get on to the housing ladder, but the statement misses nearly all of them. A five-year-plan, published probably just months before a general election, will fool no one. It is merely another example of the Government talking the talk to hide eight years of complacency and failure to act. Today's announcement is a fudge and a hastily assembled compromise that will do little to help the increasing number of people who are priced out of the housing market. If ever there was a case of too little, too late, this is it.