I beg to move,
That this House
notes that England faces a housing crisis;
further notes with concern that housing starts, including for affordable housing, are down, and that homelessness and rough sleeping have increased under this Government;
further notes that the collapse in house building and contraction in construction are a major cause of the double-dip recession;
believes that the Government needs to take urgent action to get the economy and house building going again;
and calls on the Government to introduce a tax on bankers’
bonuses to fund the building of 25,000 additional affordable homes, to bring forward infrastructure investment, including for housing, and to cut VAT on home improvements, repairs and maintenance to five per cent for one year to help homeowners and create jobs.
Let me start by welcoming the new Housing Minister, Mr Prisk, to his post. It is a really important job, and I am sure he will bring to it much-needed skill and insight, and I sincerely hope he will also bring a new sense of understanding and urgency. My experience from dealing with the hon. Gentleman is that he is a modest man, unlike his predecessor, who gave hubris a bad name.
As the hon. Gentleman is new to his post, it might be helpful if I set out why we are having this debate. Today, the country is gripped by the biggest housing crisis in a generation and the longest double-dip recession since the second world war. Since the spending review, our economy has shrunk by 0.6%. As a result of this Government’s twin failure on economic and housing policy, the reality is that Britain is one of just two G20 countries in a double-dip. The reality is also that this is a recession and a housing crisis made in Downing street—and is it any wonder, as the Chancellor has multiple jobs and yesterday’s Housing Minister multiple identities, and both authored worthless plans on how to bounce back from recession?
The facts are stark: house building is down, homelessness is up, private rents have hit record highs, and we have a mortgage market in which people struggle to get mortgages. The latest Government figures tell us that fewer than 100,000 homes were started in the 12 months to June, which is a 10% decrease on the previous 12 months and amounts to fewer than half the 230,000 new households being formed every year.
As I will make clear later, I am prepared to defend our record at any time, but let me just give a few indications of our record: 2 million new homes, 1 million more mortgage holders, and over half a million new affordable homes. Also, we brought up to standard more than 1.5 million homes that were in need of decent homes investment, putting right the backlog left by the previous Government, and in 2007-08, the year before the bankers’ crash, we achieved the highest start point for new-builds in Britain at any time in the last
30 years, with more than 200,000 homes being built. When the crash came, our response was very different from what happened back in the dark days of the 1980s. Did we stand back and wring our hands? No we did not. We acted to keep people in their homes. Through Kickstart and other programmes, we took action, resulting in 110,000 homes built, 160,000 jobs safeguarded and 3,000 apprenticeships. So I will defend our record at any time.
I want to make a little more progress.
The sad reality of the gulf between supply and demand means that this week and every week, 2,500 fewer homes are built than are needed. The Minister will be aware that although his predecessor said two years ago:
“Building more homes is the gold standard upon which we shall be judged”,
housing starts under his tenure were lower in every quarter since Labour left power. The Minister will also know from his considerable experience in the Department for Business, Innovation and Skills that the collapse in the house building industry has had a catastrophic impact on the construction industry. The Office for National Statistics has confirmed that the total volume of construction output in the second quarter of this year fell by 9.5% from the total in the same quarter of last year. The ONS confirms that that was driven by a fall in work on new private housing of 6.7% and a catastrophic 25% fall in the public housing sector.
Two years ago, we warned the Government that by recklessly raising taxes and cutting spending too far and too fast, they risked putting the economic recovery at risk. We warned them that if they cut the housing budget by 60%, it would be a devastating blow not only to house building and the construction industry but to the wider economy and the millions of families desperately in need of a home at a price they can afford. The Government, having failed to listen to those warnings, cannot now escape their failure or duck their responsibilities for its victims.
Perhaps most devastating is the rise in homelessness and rough sleeping, the very issues that the previous Housing Minister said brought him into politics in the first place. Statutory homelessness has risen for five consecutive quarters, up 14% in the past year alone. I do not know what brought the new Housing Minister into politics, but, with the new homelessness figures out tomorrow, will he tell us whether he expects to see a fall or an increase for the sixth quarter in a row?
Most heartbreaking of all—we see it all over the country—there was a 23% rise in rough sleeping last year. It is a visible, visceral epidemic that harks back to the 1980s, when Tory policies led to cardboard cities under bridges and annual reports of deaths in cold English winters.
It is not just those without a roof over their head who are suffering. The Minister’s predecessor and the Prime Minister have claimed on the Floor of the House that private sector rents are falling, so perhaps the Minister can explain why the very company used by both the
Prime Minister and yesterday’s Housing Minister to justify their claims, LSL Property Services, reported only two weeks ago that rents hit a record high over the summer? As a consequence, we have the rise of “generation rent” with 1 million young people predicted to be locked out of home ownership by 2020 as they face a squeeze on their wages, increasingly unaffordable rents and difficulties saving for a deposit, as evidenced by the Joseph Rowntree Foundation.
While my hon. Friend is on the subject of private sector rents, which the Government categorically promised us would fall, not least because of the reductions in housing benefit, does he accept that since the election 93% of the additional housing benefit claimants have been working people? It is therefore working people on low incomes who are being hit by the total failure of the Government to fulfil their promise.
My hon. Friend is absolutely right, and it is a bitter irony that the public purse, through housing benefit, is picking up the consequences of the failure to build new homes on the one hand and subsidising landlords charging ever higher rents on the other.
There are other serious consequences of the growing housing crisis, from health to welfare. Bad housing harms health and costs the national health service £2.5 billion a year. It holds kids back at school, and the price tag for lost earnings of young people whose GCSE results have been affected by poor housing is £14.8 million. Unaffordable housing drives up the benefit bill. The Government’s supposed affordable rent programme alone will drive up housing benefit by £1.4 billion.
Despite the costs of the housing crisis and the Government’s long record of failure, Ministers continue to claim that they recognise the importance of house building, including to the economy. Since cutting the affordable housing budget by 60%, the Government have announced and reannounced countless schemes and initiatives that promised to get Britain building. May I summarise but some?
In November 2010, the Department for Communities and Local Government launched the new homes bonus, promising action
“to get the country building again”.
In March 2011, the Government launched “The Plan for Growth”. Remember that? It said:
“A successful construction industry is vital for sustainable growth. Building and maintaining homes…are activities that underpin the entire economy…it is critical that industry gets the support it requires to build houses on the scale the UK needs”.
“radical planning reform” that would deliver
“the housing the country needs.”
At the time, the Secretary of State for Communities and Local Government welcomed the
“action to get the house building industry building again”.
Two months later, the Government launched Firstbuy, promising
“a much-needed boost to our house building industry, supporting thousands of jobs across the country.”
In November 2011, the Government were at it again, launching the housing strategy. Do Members recall that it was described as the housing revolution? The Prime Minister and the Deputy Prime Minister donned their wellies, hard hats and high-vis jackets for the TV cameras as they promised
“to restart the housing market and get Britain building again” with schemes, they said, that could create 400,000 jobs. All that with £420 million, but a tenth of what was cut the previous year by the Chancellor.
“boost to the housing market…and thousands of jobs in the construction industry”,
and yes, you have guessed it,
“to get Britain building again.”
So much has been promised—hundreds of thousands of jobs in the construction industry, hundreds of thousands of new homes, hundreds of thousands of new home owners—but what has been delivered? A contracting construction industry and collapsing housing starts, a growing housing crisis, a double-dip recession, and an array of announcements followed by a litany of failure. Can there be any more fundamental an indictment of failure than the fact that, at a time of economic crisis, when the Government have promised over and over again to build Britain out of recession, building starts fall quarter after quarter after quarter, pushing Britain back into double-dip recession?
What does my hon. Friend make of the announcement that we are to have yet more planning legislation, increasing uncertainty and almost certainly blighting a possible housing revival?
I will cover that in greater detail later, but my hon. Friend is absolutely right. The Government blamed the failure to build homes on the planning system and so tore the system up by its roots. We warned them of the consequences: damaging uncertainty, chaos, confusion and hiatus. Sure enough, the figures bear that out. The ink is barely dry on the new national planning policy framework, planted only four and a half months ago, but they want to tear it up once again and say that it needs fundamental reform.
While my hon. Friend is on the subject, does he agree that changing the planning system is not the simplest and most straightforward way to revive the housing market, because currently around 330,000 new homes could be built with existing planning consents?
My hon. Friend is absolutely right. We meet regularly some of the major developers and building companies, and they all say the same thing. They have planning permission for in excess of 300,000 sites, and the figure is rising, but they simply do not feel that they can proceed, not least because of the state of the economy and the mortgage market. Again and again we have had those false dawns from this failed Government, and now once again Ministers will don their wellies and high-vis jackets. More schemes to get Britain building are promised, as if saying it will make it so.
I thank the shadow Minister for giving way eventually. May I draw his attention to the lamentable record on council homes in North West Leicestershire? The previous Labour-controlled district council left an awful legacy when it was finally turfed out of office in 2007: 70% of council homes were below the decent homes standard, one of the very worst records in the country. May I also draw his attention to the fact that it was this Government who found almost £21 million to bring all the council houses in my constituency up to the decent homes standard in the next three years, another example of this Government sorting out Labour’s housing mess?
Sadly, when we took office in 1997 we were confronted with a Conservative legacy of disrepair and neglect. We invested £19 billion to bring more than 1.5 million homes up to the decent homes standard, and I have seen in my constituency how that transformed the lives of the people in those homes. Some 75% of all tenants concerned had their homes brought up to the decent homes standard. Did the hon. Gentleman’s Government stick to that progress when they took office? No, they did not.
I have been in this House for nearly 30 years, and the whole time we have been short of affordable housing, under Tory and Labour Governments, but Labour built less council housing than any previous Administration. The hon. Gentleman’s criticism would be more effective if he acknowledged Labour’s failure to put housing at the top of its agenda. The difference is that this Government understand that housing has to be at the top of their agenda.
A record of 2 million more homes, 1 million more mortgages holders, half a million more affordable homes and 1.6 million homes brought up to the decent homes standard is one that we can rightly be proud of. All I will say now, as I will say later on, is that in the here and now there is a pretty dramatic contrast between what Labour councils and Conservative-led councils are doing in building new council homes, taking advantage of the housing revenue account reforms, reforms that we pioneered. I will return to that point later.
My hon. Friend talks about building new council homes; we wish we had that luxury. On Monday in Hammersmith, the Conservative council decided to knock down 760 newly refurbished council family homes and sell the land to a private developer, some of whose associates have been arrested in Hong Kong on fraud charges. Is that the localism of which the Government speak? The residents of those homes had voted three times for them not to be demolished—the last time by a majority of four to one.
My hon. Friend represents with great distinction a constituency with a council that has been a laboratory for some of the most right-wing, ideological
Conservative thinking on housing. He is right to challenge that and to say that the rhetoric may be that of localism, but the practice is more like Leninism.
My hon. Friend is right to focus his devastating attack on the coalition Government’s record on housing starts. When it comes to localism, they have also undermined local authority attempts to improve local housing markets. In Newcastle, 9,000 people are on the council house waiting list and there are 4,000 empty homes. Some 99% of those are in the private sector, yet the Government are making it harder for local authorities to bring empty private sector dwellings into public sector use.
My hon. Friend speaks with passion about her constituency and the problems she faces. All over the country, it is typical for there to be enterprising Labour local authorities. Would that we had an enterprising central Government who really believed in local government and its capacity to help build Britain out of recession.
I return to where I was. Perhaps I am being unfair on yesterday’s Minister for Housing. It turns out that he took it on himself to build, and with a dedication and passion that many would find hard to understand; he hid it, but he was beavering away, busy building—building up his following on Twitter. I hope that the new Minister for Housing will spend his time dedicating his full attention to the job. I advise him not to be obsessed with sending out press statements, as his predecessor was. If there were a new home for every press release from the last Minister for Housing, there would be no housing crisis. Perhaps he was trying to prove his prophecy, made from opposition:
“it’s easy for a housing minister to catch your eye with a headline, but much harder to deliver more homes.”
For once, he was absolutely right.
The new Minister for Housing is taking on a position of huge responsibility and national importance. Every Member knows the scale of the housing crisis and will have stories from their own constituency. I have never-ending queues of heart-breaking cases—young couples paying a fortune in the private rented sector, often in sub-standard accommodation, desperate to get a mortgage, which, if they could get it, would mean that they would pay less to buy a home. But they cannot get a mortgage.
Those on ever-lengthening council waiting lists are desperate to get decent accommodation. A couple with two young children came to see me; both burst into tears because of the impact that where they were living was having on their children. There are also the local small businesses. In my constituency, a man from the local construction company—a decent man, who had been in business for 25 years—came to me and said, “We just can’t get work any longer.” One in four young people in Castle Vale, an admirable community, is out of work. They are good young people, desperate for an apprenticeship in the building industry, but all their hopes are being dashed. They will find that this is a Government in complete denial as they spin a line that things are getting better; a Government who promised to get Britain building but are in denial about falling housing starts; a Government who promised to unlock the mortgage market but are in denial about the millions locked out of home ownership; a Government who promised that rents would come down but are in denial as they hit record highs; a Government who promised an “affordable housing revolution” but are in denial, with the previous Housing Minister hailing a 68% fall in affordable home starts and a 97% collapse in social housing starts as “rapid and dramatic increases”; a Government who once promised not to
“produce endless policies and initiatives that…lead to inaction” or to
“repeat these mistakes of the past.”
The time for half measures and half-baked schemes is over. The CBI was absolutely right when it said that we face a national economic emergency. Rising to that challenge starts with the political will to put housing centre stage, both to meet growing need and to get a sluggish economy moving. The Government must put jobs, homes and growth at the heart of everything they do, not least because history tells us that economic recovery requires us to build our way out of recession, whether it was the eventual revival from the long depression of the 1930s or Britain’s post-war recovery when we built homes for our heroes on a massive scale. I know that on this, at least, the Business Secretary, the new Minister’s former departmental colleague, will agree with me, because he has said:
“Recovery requires a big expansion in social and private house building.”
He is in government, so the question is why are they not getting on with it?
The Government need to show the same determination that a Labour Government showed in 2008. When faced with a global crash as a consequence of the bankers crisis, we acted to keep people in their homes, unlike in the 1980s when the Tories presided over the heartbreak of mass repossessions, and we acted to build new homes.
Our record contrasts very favourably with what happened in the 1980s. We helped first-time buyers. I have been told time and again by building companies and developers that had we not acted in the way that we did, the industry would have fallen flat on its face.
Does my hon. Friend recall that in the recession of the early 1990s repossessions rose to very alarming levels and the Government of the time took virtually no action to prevent it? That contrasts with the action taken by the previous Government to halt a rise in repossessions and keep them at a much lower level than the industry was forecasting.
My right hon. Friend, who has a long and honourable track record on housing, is absolutely right. Tens of thousands of people are in their homes today because we took action when faced with those dire economic circumstances, in dramatic contrast to what happened back in the 1980s.
Unlike this Government, during the recession Labour rightly increased investment in housing to provide the homes that people need and to secure construction jobs. As well as providing funding to build 112,000 affordable homes, we created and maintained 160,000 jobs and 3,000 apprenticeships for young people. Yesterday’s Housing Minister will be familiar with those homes because, extraordinarily, the Government have tried to claim credit for them. However, as the National Audit Office has confirmed, of the 170,000 affordable homes in the next five years that he used to talk about, 70,000 were commissioned and paid for by a Labour Government. Labour is showing the same determination now as it did then, because we intend to put housing at centre stage of our economic recovery plan.
We understand just how important investment in house building is as a means of economic revival. We know that for every £1 of public money spent on house building, studies have shown that the economy benefits by up to £3.50. Money spent on building affordable homes is money saved as unemployed building workers are put back to work, young apprentices are taken on, and less money goes out on housing benefit. We know that in transmission time it is the quickest way to get a sluggish economy moving. Investment is the key.
The Government were absolutely wrong to cut £4 billion from the affordable housing budget in 2010, and no amount of press releases or half-cocked initiatives will fix that. That is why Labour has proposed bringing forward infrastructure investment, including for housing, and why we have called on the Government to use £2 billion from a repeat of the bankers’ bonus tax to fund tens of thousands of affordable homes, not least because public investment can lever in investment from elsewhere.
The National Housing Federation has said that public investment of £1 billion, matched by £8 billion from the housing associations, would build 66,000 shared-ownership homes for people on low to middle incomes, create 400,000 jobs and, in so doing, save the taxpayer £700 million in jobseeker’s allowance, not to mention the added savings from housing benefit and increased tax revenues. The NHF also predicts a boost in growth, generating £15.25 billion in the wider economy. The Government should commit greater investment now—we would—rather than leave it in the pipeline.
Next, the Government need to get the banks lending again. Small to medium-sized firms, including small builders, are crying out for investment, but the banks are not lending. Thus far, the Government schemes have failed.
The Government must also urgently consider the case, proposed by my right hon. Friend the leader of the Opposition, for a British investment bank. The German state bank, KfW, is a good comparison, and a British investment bank could support the funding of new infrastructure.
Next, the Government must encourage innovation among local authorities and housing associations. The Government took a welcome step forward by proceeding with Labour’s plans to free up councils to build the next generation of council homes through housing revenue account reform. Indeed, along with the Labour leader of Southwark council, Peter John, I launched its plans to build 1,000 new, much-needed council homes. The Government must now provide help and support to those innovative councils that are taking advantage of that reform to ensure that they use the headroom to maximise the number of homes built.
It seems that those most in need of support are Conservative-run local authorities. As a freedom of information request by my right hon. Friend the shadow Secretary of State for Communities and Local Government has demonstrated, Labour councils are building while Tory councils sit on their hands. A survey showed that five times as many social homes for rent are being built in Labour authorities than in Tory areas.
My hon. Friend will be aware that Islington council is planning to build 750 new council homes between now and 2015. He will also be aware that in inner-city areas such as mine, more than 30% of the population live in the private rented sector. Does he agree that it is past time that we had much tougher regulation of the private rented sector in the terms of tenancies, the longevity of tenancies, rent levels and, above all, the social and repair conditions that tenants have to live in?
The private rented sector has an important role to play, but not on its current terms. That is why in July we launched our initiative, which was supported by the sector as a whole, to regulate letting agents. That is why we will be bringing forward proposals on effective regulation of the sector. We have to tackle the lack of stability and security, and the ever-rising rents. That is why we will bring forward proposals to ensure that the decent homes standard applies in the private sector as well as in the public sector.
I agree with my hon. Friend. It is welcome that the new Minister for Housing has taken that position. Perhaps he will follow that through in government.
Investment in the private rented sector should be encouraged. Many of the measures in the Montague report—for instance, those on the use of public land, on attracting investment and on standards in the private rented sector—are welcome. However, we strongly oppose the proposal to further water down the affordable housing requirements that councils place on developers. Those requirements enable communities and local authorities to insist on affordable homes in mixed communities. Developers simply should not be allowed to build for the well-off only.
The Government should cut VAT on home improvements, repairs and maintenance to 5% to help home owners and small businesses, and to create jobs in construction and building supplies, from glass and bricks to cement. They should also implement a one-year national insurance tax break for every small firm, including building firms, that takes on extra workers.
The Government have continued with Labour’s drive to free up public land for house building, but they must go further. Innovative deals are being done, but we believe that it is appropriate for the Government to consider schemes to provide public land to housing associations and other developers free at the point of use, with payback over time. Such schemes would overcome the problem of the initial cost of land and get affordable house building going.
I referred earlier to the way in which the Government tore up the planning system. They are now returning to fundamental reform of the planning system. It was ludicrous to blame the planning system before they reformed it. It is laughable to blame it afterwards. The Government cannot seem to make up their mind. The Chancellor said on “The Andrew Marr Show” on Sunday that the city of Cambridge was a good example of how the new planning framework that they introduced earlier in the year is working. Later, on “The World This Weekend” the Business Secretary used the same example to suggest that house building is being held back by the current rules. We warned of chaos and confusion on planning—that seems to have spread to the Government.
The hon. Gentleman persists in criticising the national planning policy framework. If it is not working, how does he account for the 13% increase in housing approvals over the past six months, compared with the previous six months?
I will come on to those interesting statistics. Under the planning system that the Government inherited, applications were overwhelmingly granted speedily and there was development land for in excess of 300,000 homes. The most recent data from the month following the NPPF’s introduction show that planning approvals fell by 37%.
The fact that homes are not being built is not the fault of the planning system. The principal problem is the failed economic and housing policies of the Government. To get Britain building again, we need to address the root cause of that failure—their failed economic plan, which has caused a lack of liquidity in the finance market, a shortage of mortgages for struggling first-time buyers, and the biggest squeeze on living standards in a generation.
Whether it is the economy or house building, the Government will always find somebody else to blame. The Chancellor blames the weather, weddings and bank holidays, and the last Housing Minister blamed the planning system and affordable housing. The truth is that the reason for the collapse in house building, the contraction in the construction industry and the double-dip recession is a failed deficit reduction plan that cut too fast.
We urge action in the motion that we have tabled. The Government’s failures in respect of housing are not just those of policy, gross though those are, but fundamental failures of leadership on an issue that is vital for the future of our country. If the Government really meant what they said about getting Britain building, they would have put housing at centre stage in their economic recovery plan and invested in it. They would have invested to build the homes that millions of families desperately need and to support those struggling to pay rent in the private rented sector. They would have invested in the future of our young people, helping them to achieve their dream of home ownership. They should be leading a real revolution in housing, building the foundations for Britain’s recovery. That is why we ask the House to vote today for real action to build Britain out of recession.
Order. I am going to introduce a six-minute limit, which may have to go even lower due to the lack of time.
I beg to move an amendment, to leave out from “House”
to the end of the Question and add:
“welcomes the first Opposition Day debate on housing in this Parliament;
notes that house building under the previous administration fell to its lowest peacetime level since the 1920s;
further notes that house building starts in England were 29 per cent higher in 2011 compared with 2009;
believes there is still more to do to get Britain building;
further notes that housing is the most affordable for first-time buyers for a decade and mortgage payments are the lowest since 1997 as a direct consequence of the decisive action to tackle the deficit brought about by the previous administration;
notes that the Coalition Government’s affordable housing programme will deliver 170,000 affordable homes by 2015 and leverage £19.5 billion of investment;
and welcomes the steps being taken to increase house building and unlock stalled sites and the comprehensive programme to get empty homes back into productive use.”
Well, it has taken the Opposition two years. I am referring not to the speech of Jack Dromey but to the fact that today, I can welcome their finally having taken such an interest in housing that they have decided to hold their first Opposition day debate on it in this Parliament. Two and a half years and not a peep from them. I understand the hyperbole and enthusiastic language of the hon. Member for Birmingham, Erdington, but the fact that they have not been able to come up with their own debates about housing shows just how interested they are in the subject.
I thank the hon. Gentleman, of course, for giving me this opportunity on what is effectively my first day in the job to explain how the Government will reverse the housing problems that we inherited. However, I thought he was a little uncharitable about my predecessor, my right hon. Friend Grant Shapps, whom I thank. He showed a unique enthusiasm and energy, which I hope to match. As the hon. Member for Birmingham, Erdington, said, I am a modest man. It was once said that if somebody is modest in politics it is possibly because they have a lot to be modest about, but I hope to be able to match my predecessor’s energy and ensure that we reverse the problems that we inherited from the last Government.
With respect, I would like to try to respond to the hon. Member for Birmingham, Erdington, and a lot of Members want to speak. I will give way in a moment, but I wish to canter through my speech, because this debate should be for Back Benchers as much as Front Benchers.
I note with interest a whole series of assertions in the Opposition’s motion. However, the fact cannot be ignored that under the Labour Government, house building fell to the lowest peacetime level since the 1920s. Labour had its nine different Ministers, its top-down targets and its 10 different housing Acts, but for all that activity it delivered very little. Maybe that is why it has taken it two and a half years to muster up the courage to have a debate on the subject.
In contrast, the current Government ensured that house building starts in England were 29% higher in 2011 than in 2009. Our No. 1 priority is to ensure that we reduce the Labour deficit and get the economy growing. We want to help local business people build vibrant neighbourhoods, set people free to create the places where they want to live and give them back the control of the planning system that they lost under the last Administration.
If I have learnt anything on the first day, it is to stick to the information in front of one and not engage in idle speculation. I have yet not had the opportunity to meet the new planning Minister.
The hon. Member for Birmingham, Erdington was right to emphasise the economic issue—he and I know that from our backgrounds. The housing market has the potential to be a catalyst for the economy. For every 100,000 homes built, about 1% is added to GDP. The industry is labour intensive and it is important to ensure that that economic benefit is there.
I congratulate the Minister on his appointment. Reference has been made to his predecessor’s gold standard, which he set out in a Select Committee hearing in response to a question that I asked. The Government agreed to a target of building more houses a year than the previous Government built before the recession. Is that still the Government’s target?
We are not in a position to take the view that we want to determine how the market works. We have Government programmes, and we will set targets for them that we can deliver. However, unlike the Labour party, we do not believe that Whitehall’s job is to run the marketplace. I want to ensure that, when the Labour party thinks about those issues, it recognises that the Government are committed to increasing the supply of housing and, as the hon. Member for Birmingham, Erdington mentioned, to addressing the long-standing, cross-party, intergenerational issue of affordable housing.
Last November, we introduced an ambitious package of measures through the housing strategy to boost house building. However, unlike the Labour party, we know that we cannot achieve that by trying to control the market from Whitehall. The old system of setting top-down targets for housing, with reams of planning guidance, did not deliver the houses we need or the places that people wish to live in. Our strategy is deliberately different from that. Instead of setting a top-down target from Whitehall, it is designed to lay the foundations for a systematic shift in the way in which the housing markets work.
I will go further than that. I will meet the hon. Gentleman. It is my first day in this position and I want to know and understand the issues. My diary secretary may regret that, as I suspect that other Members will try to get in the queue. However, I would like to understand the issue before commenting on it.
Not adopting the top-down approach works in practice. For example, our investment of £4.5 billion in funding new affordable homes over the spending review period levers in £15 billion from the private sector to deliver those properties. That makes a total investment of £19.5 billion in new affordable housing, which will help us deliver 170,000 affordable homes by the end of the Parliament.
The Homes and Communities Agency has now reported that it has exceeded its targets for affordable housing this year, achieving a total of 51,665 affordable homes in England. Contracts have been signed for affordable house building in all parts of the country and across councils of all political colours.
Affordable housing is at the heart of our agenda. We have consciously sought to introduce initiatives to ensure that housing is the most affordable for first-time buyers for a decade. Mortgage payments are the lowest for 15 years as a direct result of our action to tackle Labour’s deficit. In July, Halifax noted that housing was now the most affordable for first-time buyers for a decade. Conservative Members are and should be proud of that record.
As the hon. Member for Birmingham, Erdington said, of course the challenge for first-time buyers is getting a mortgage. We understand that, and that is why we have launched the NewBuy scheme, which provides guarantees for mortgages of up to 95% loan to value for new build properties. That has already given a helping hand to prospective buyers who were otherwise frozen out of the housing market. The Home Builders Federation has estimated that NewBuy could deliver up to 25,000 additional new homes over three years.
The Government also introduced the Firstbuy scheme. Labour Members claim that we are not doing enough and criticise the initiatives. They need to decide what they actually want. The Firstbuy scheme supports capacity in the house building sector and is assisting almost 10,500 first-time buyers to purchase new build property in England by spring 2013. Interestingly, demand for the Firstbuy scheme has been strong. Official statistics published by the HCA show there had already been 3,000 Firstbuy sales by the end of March 2012, which is good progress.
With respect to the hon. Lady, the idea that budgets across the Government are impervious to or not involved with the deficit we have faced—[ Interruption. ] She has highlighted a point not only about the overall housing budget but about how that money is used. The point I was trying to make is that when dealing with affordable housing, it is not just about every pound we spend but about how we lever in other private sector funds, which is important. It is peculiar that the hon. Member for Birmingham, Erdington applauded that principle a moment ago.
We have reinvigorated the right to buy—supporting social tenants who want to own their own home. That is a policy of which the Government can, and should, be proud. We have reversed Labour’s cuts, and increased the right-to-buy discount cap to £75,000 across England from April. For the first time, every additional home sold under the right-to-buy scheme will be replaced by a new home for affordable rent, with receipts from sales recycled across the cost of replacement. I wish that the cultural opposition of Labour Members to this issue would reflect the reality. The right to buy promotes mixed communities and gives social tenants a financial stake in the well-being of their neighbourhood.
The hon. Member for Birmingham, Erdington mentioned the right to buy, and he might now be able to help. My understanding is that the Labour group on the Local Government Association opposed the right-to-buy scheme.
I am glad to answer: Labour is the party of aspiration. We support the right to buy, but the Government’s approach is fundamentally flawed, first because local authorities will not be able to retain all the receipts, and secondly because thus far it is inexplicable—perhaps the Minister can help—how the one-for-one promise will be delivered. Thirdly, there is absolutely no guarantee that if a home is sold in my constituency of Erdington, where there is a long waiting list, a new home will be built in Erdington. There are fundamental question marks about the Government’s approach.
I think that was, “Yes but, no but, yes but, no but.” It is interesting; I am delighted and will obviously want to talk to the LGA group to see if it shares the hon. Gentleman’s view. I hope it is the case that the entire Labour party will adopt the right-to-buy scheme and recognise that we should all be standing behind aspiring tenants. I would love to be a fly on the wall at the hon. Gentleman’s next meeting with the LGA Labour group.
Let me move on to the issue of building new homes. I am alert to the fact that time has passed, and I wish to ensure that Back-Bench Members have the opportunity to speak, especially given the ruling from Mr Deputy Speaker. In many parts of the country, there is a difficult housing market. We are under no illusions about that and one has only to look around the world to see housing markets in real difficulties. Much of that is a result of the financial consequences of the housing boom and bust that took place under the previous Administration.
That is why we have launched the £570 million Get Britain Building investment fund that will unlock stalled sites for up to 16,000 homes and hopefully create up to 30,000 jobs. In addition—we have had a lot of support from many Back-Bench Labour Members on this—we set up the £770 million Growing Places fund for local enterprise partnership areas to fund infrastructure projects that will help to unlock some of the more troublesome sites.
We are accelerating the release of surplus Government-owned land, with capacity to deliver up to 100,000 new homes on brownfield land to the benefit of communities around the country. The hon. Member for Birmingham, Erdington mentioned that point, and I shall look again at his representations. I must ask, however, why over 13 years the previous Labour Government did not do that already? Why did they wait until they were in Opposition and then try to lecture us on what should happen in the future? It is a shame, but I would always be happy to hear a positive representation on the issue.
I welcome the Minister to his new post. Does he agree with the Prime Minister and Chancellor on the need to build on green belt, especially given that his 2005 ten-minute rule Bill specifically showed his opposition to that? Does he agree with the Prime Minister and Chancellor or does he stand by what he said seven years ago?
Alongside the measures I have just described, it is important to ensure that we help local areas, but not in the same way as the previous Government. For example, we could help those local areas that wish to deliver locally led large-scale new developments in a way that helps their communities. Unlike the previous Government, whose eco-towns were promised and never happened, this Government do not intend to dictate to people or impose on them. We want to work with them, which is an important principle.
Let me give an example of how that policy has worked. I pay tribute to my predecessor, because last week, the Government helped to unlock plans for 23,000 homes on the brownfield site of Eastern Quarry in Ebbsfleet. Those plans had been stuck on the drawing board for a decade, but the homes can now be built.
That development, which is on a brownfield site in my constituency, is for 10,000 homes, which makes it one of the largest developments in Europe. Is the Minister aware that the idea was conceived in 1996, but that not one single home was built in the following 13 years? Only now are we seeing action on the Eastern Quarry development in Ebbsfleet.
I welcome the Minister to his new post and the Government’s commitment to delivering the housing that Britain needs. May I alert him to one issue we need to address? Recent figures show a lot of investment in housing that is for use not by occupants, but as investments by companies around the world. Properties are being built and bought, but not put into use. We need to ensure that the properties that will be built will be available for people to live in, and not held empty as investments to make money, which often goes abroad.
That is a perfectly sensible point, but I want to look at it in a little more detail and get to understand the issue. I am a chartered surveyor, so have perhaps the dangerous quality of a little knowledge of the subject I deal with as a Minister, but I want to ensure I understand the aspect to which the right hon. Gentleman refers, because the way in which the market works has changed.
With respect to interventions, many hon. Members wish to speak in the debate, so I shall make some remarks on the important issue of homelessness and then conclude. We want to ensure that we tackle homelessness and the problems of the most vulnerable. As the right hon. Gentleman and other hon. Members have said, the problem has been with us for many years. All Governments need to ensure that they are positive and determined to tackle the problem, but they also need to reflect on the fact that outside issues and complex causes underlie homelessness. I want to look, for example, at ex-service personnel and other groups with regard to homelessness, even if the Government have made important steps before I was able to take on the role of Housing Minister.
It is important to bear in mind that the statistics are not quite as bad as the hon. Member for Birmingham, Erdington painted—he was a little unnecessarily partisan. The statistics show us that homelessness is half the level it reached under the previous Labour Government and that it remains lower than in 28 of the past 30 years. I am under no illusion that there are things to do, but we have one of the strongest safety nets in the world to protect families and vulnerable households from losing their home. In addition, through the Government’s measures, councils have been able to help more than 13,000 vulnerable households to secure alternative accommodation when faced with the prospect of homelessness.
We are already taking action to help 50,000 households in temporary accommodation—all hon. Members will know of that challenge from constituents in that situation who have come to see them. We have consulted on a new power that will allow local authorities to use the private rented sector to house homeless families. That will mean shorter waiting times for homeless households and less time in temporary accommodation. Those with young children in particular will want the time they spend in temporary accommodation to be reduced—that is important.
I shall conclude now in order to allow as many Back Benchers as possible to contribute to the debate. The Government are working hard to substantially increase the supply of housing, from the low point of 2008-09. Our housing strategy combines practical measures with an understanding that Whitehall cannot, and should not, try to control the housing markets. Our work in helping first-time buyers, in freeing up the planning system and in unlocking stalled sites is all part of our commitment to enable more homes to be built. But we are not complacent. The global financial squeeze is continuing to impact. That is why, later this week, the Government will have more to say about how we can accelerate the progress already made in housing and infrastructure.
By tackling the deficit, we have built the foundation for a sustainable economy. We are now focused on getting houses built, providing more affordable homes and making sure that home ownership is affordable once again. I commend the Government’s amendment to the House.
Listening to the new Minister for Housing reminded me of the words of a previous Prime Minister: “Crisis, what crisis?” The crisis is that we should be building 250,000 homes a year, but we are building 100,000—and the number is falling. The average age of first-time buyers is rising, waiting lists for social housing are rising, rents are rising, homelessness is rising, and the number of houses we are building is falling. In my definition, that is a crisis.
The fact that we only built 50,000 social homes—or affordable homes, as the Government now choose to describe them, although not all of them are social homes or indeed affordable—in the first year of this Government, and only 15,000 last year, demonstrates the scale of the problem that we face. Last year, in my own city of Sheffield, we built two affordable homes. My hon. Friends the Members for Penistone and Stocksbridge (Angela Smith) and for Sheffield Central (Paul Blomfield) and I could each let those homes to completely deserving cases in the first half hour of any surgery we hold. That is the scale of the problem.
I do not claim that the 13 years of Labour government were perfect, or that we built sufficient homes. We had a reasonable record, but we did not build enough. However, the fact that we did not build enough makes this Government’s performance in building even fewer that much worse—and our performance is no justification for that. The Labour Government had an excellent record on the decent homes programme. There was a clear national target to deal with the £19 billion backlog of disrepair that has already been mentioned. We then allowed local authorities and housing associations to get on with the job of delivering that target at local level.
The reality for new construction is that the private sector—the major developers—has never built more than 150,000 homes in a year, and probably will not get near that number again any time soon. If we are going to hit the 250,000 target—and I hope we can get more homes built by the private rental sector and the institutional investors, and through self-build, as we saw on the Select Committee visit to Almere—we will have to build far more homes for social rent. We have to be brave. Whether this Government do it or a future Government, we have to set a target for 100,000 social rented homes a year. We delivered the decent homes programme and there is no reason why we could not deliver such a programme in the future.
The Select Committee recently published a report that said that there is no one silver bullet or magic solution to building sufficient homes. We did come up with several ideas that were agreed cross-party by all members of the Committee, but I was disappointed that the Government’s response dismissed or downplayed every single one. I ask the new Minister to go back and have another look, because some of those ideas are very appropriate.
At a time when we are trying to build more houses in this country and when, as I understand it, the Government are looking to underwrite investment in social housing, it is ludicrous that they do not even mention housing authorities or arm’s length management organisations as part of that programme, only housing associations. Of course, housing associations have a role to play, but why are we capping how much borrowing local authorities can do, when under prudential rules they could do more? These are the only form of assets against which local authorities cannot freely borrow to invest. Why is that rule there?
Why do we have these arcane Treasury rules that treat borrowing for investment in housing by local authorities differently from how it is treated in every other EU country, including not only Greece, which somebody might mention as a reason for not doing it, but Germany? Why not look at what happens there and why they are successful? Why not look at the historical grant of housing associations and how we can redefine that to allow them to borrow more money? Of course, we ought to support attempts by housing associations and local authorities to borrow in the retail markets, but a housing investment bank to build the money in the private sector and connect it with those who want to investment would be another major step forward that the Government could get involved in. It might need public subsidy or the sort of underwriting that the Government are now considering, but these are big ideas.
The idea of self-build, about which the previous Housing Minister was enthusiastic, needs a little Government support to fund pilots and get local authorities shaping up those schemes, as we saw in the Netherlands, but it could deliver tens of thousands of homes a year.
When in doubt, the Government tend to blame the planning system, but it is this Government’s planning system now—since the Localism Act 2011 and the changes in the national planning policy framework. They cannot keep blaming the planning system and creating more uncertainty about change, because that uncertainty will reduce the number of planning applications and slow down the whole system.
I hope that in due course we will have a further debate on the Select Committee’s report. It was an attempt to lay out several ways of getting house building going in this country, but the response was deeply disappointing. I ask the Minister to have a look at it, because it contained many ideas that, if put into practice, could move us towards the 250,000 homes a year that the country needs in order to solve its housing crisis.
I start by warmly welcoming the Minister for Housing, my hon. Friend Mr Prisk, to his new job and to a Department that I hope he will enjoy. It is an important job that he takes on, and I assure him that his task will be made easier by the support of an outstanding Secretary of State— I regard it is a matter of great pride to have worked with him for the past two years. So I wish my hon. Friend well. I know that he will continue the work the Government have already done.
With respect to Jack Dromey, who was always a courteous and affable opponent, I must say that there was more than a little collective amnesia in his speech and in the interventions from Opposition Members. I refer to collective amnesia because of the Labour party’s persistent failure over 15 or more years—throughout its time in government—to deliver on housing. I include in that its under-delivery of affordable housing. The net result was the lowest amount of house building in peacetime since the ’20s and—this is particularly troubling—a decline of about 421,000 in the amount of social rented stock available.
The Opposition showed collective amnesia in their assertion that we should place faith in local councils. I agree with that, but the Labour Government trammelled the ability of local authorities to take decisions on planning matters that were in the interest of and reflected the needs and priorities of their local communities. They also showed collective amnesia over the failure of their dirigiste, top-down, target-imposed system for delivering housing on the ground, and over the sometimes perverse impact that unduly rigid adherence to targets for affordable housing and other planning obligations had on the delivery of viable sites.
My hon. Friend the Minister knows that the Government have already started the important work of building greater flexibility into section 106 agreements. I hope that he will continue that work, because it is important to bringing forward more sites and keeping them viable.
May I express my sadness that the hon. Gentleman is no longer on the Front Bench? I did not always agree with him in that role, but he was always a courteous and good Minister, and we miss him. However, may I also ask him to direct his claims of amnesia towards himself? He will recall from the debates on the Localism Act 2011 that, contrary to what he has said, under the last Government the output of new homes according to the measure that his Department used to use record the figure—and correctly so; that is, net additions to the housing stock—rose year on year until the recession, to 200,000 net additions in 2007. When does he expect the present Government to get anywhere near 200,000 net additions to the stock?
I am grateful to the right hon. Gentleman for his comments. It is always a pleasure to exchange arguments with him. He must bear in mind the reduction in affordable homes of about 250,000 over that period. Whatever his intentions, the fact is that there was a consistent under-supply throughout the Labour Government, and we are now reaping the consequence.
I have given way once and time is short, as I am sure the hon. Lady will understand.
The important point is that the current Government have started on the important task of rebalancing the planning system. I was privileged to undertake that work with my right hon. Friend Greg Clark and it gives a strong basis for policy going forward. It was ludicrous that we had such a complex system of planning and, allied to that, the top-down imposition of targets, which were a positive impediment to growth, not least because they set communities against appropriate growth. That created a system of tension and antagonism, which the national planning policy framework rightly seeks to remove.
The final point that I should like to make in that context—and which I know my hon. Friend the Minister will take on board—is that we must look at planning and housing policy holistically. We should look at the interactions between housing policy and planning policy, and also at the need to give local authorities incentives to support sustainable growth—for example, through the way in which we are reforming the funding of local government finance. All three are parts of the same equation, if I may put it that way, and I hope that my hon. Friend will feel able to build on the work started in the Localism Act 2011 and the Local Government Finance Bill; I do not know whether he will inherit it, but I assure him that he will find it cheerful bedtime reading.
The reality is that this Government are removing blockages in the system. My hon. Friend Gareth Johnson rightly referred to the change at Eastern Quarry. That project had indeed stalled; it is also something that, in my responsibilities for the Thames Gateway, I had some involvement in, together with my right hon. Friend Grant Shapps. I should also say that the realism shown by the Conservative-controlled local authority of Dartford council was a major help. However, the irony is that the system we inherited from Labour did not allow willing parties to come together and renegotiate an agreement to produce a more realistic reflection of current market conditions. Our Government gave them that flexibility; they took advantage of it and now those homes will be delivered. Indeed, the first homes will be delivered this year, which I hope will be a matter of pride to everyone associated with the project.
I also hope that my hon. Friend the Minister will continue to build on the work that we have already seen with the Growing Places fund. There will be sound arguments to consider if in due course we are able to roll it out further, into the type of revolving infrastructure funds that have been talked about by informed sources in many parts of the industry. I also hope that he will continue to look at refinements to the operation of the community infrastructure levy—the CIL—so that it is a positive incentive to development and brings a genuine benefit to local communities. Again, however, we should look at some of the technical detail. For example, there are some excellent schemes, such as the one developed by Pocket in London, that do not require any public subsidy, yet they can face difficulties because they do not count as affordable housing under the CIL rules in the same way that they do under planning policy.
Those are some small but important matters that I hope my hon. Friend the Minister will take on board. I know him to be an enthusiastic Minister and a good colleague. I assure him that I shall be more than happy to support him in everything he does and I wish him well.
The facts are stark. Millions of people are on waiting lists for social and affordable housing. New house building is down, there is little investment in the construction industry, and companies are crying out for policies that will kick-start their order books and the economies of local areas such as Halifax in order to get people back into work.
Over the past few months, I have been working with Marshalls plc, a company in my constituency, and with the unions Unite and the Union of Construction, Allied Trades and Technicians, to try to get new policies put in place to stimulate the economy. The construction industry, in which Marshalls is a major player, should be at the heart of any economic recovery. Indeed, on
The Government should start to do those things today. Any economic recovery must be demand-led, with the construction industry at its heart. Such action could be a catalyst for economic recovery. I am sure that the Minister would acknowledge that every £1 invested generates £2.84 in economic activity. The message is simple: get building, and do it now. It cannot be right, in a country such as ours, for millions of people to be on the social housing waiting list. Any Government who want to call themselves progressive should measure their success or failure by their housing policies.
We have hundreds of people on the waiting list in Ashfield. We need not only the new homes but the jobs as well. We are also lucky enough to have a lot of green spaces there, and we would like to keep them green. Does my hon. Friend agree that, wherever possible, it is always best to build those homes on brownfield sites?
I absolutely agree with my hon. Friend. Many such brownfield sites have been identified as suitable for building on.
On the evidence of the past two years, the coalition Government are failing miserably. Since 2010, hardly any new houses have been built in Halifax and Calderdale. Indeed, only six new houses were built in the last quarter. It is no wonder that first-time buyers in my constituency are so frustrated. The lack of policies for growth in the north gives economic and social resources to the south, and the problem becomes one of a cycle of more job losses. I hear Conservative Members constantly calling for more growth-led policies in the south-east. If they think that the problem is bad within the M25, they should try heading north of the Watford Gap to see the effect of the lack of growth-led policies there.
I fear that the hon. Lady is being slightly disingenuous. After all, this Government have announced the biggest investment in transport infrastructure across the north of England. The northern hub will involve huge investment in railways, which will provide people in all parts of northern England with jobs that would not have existed under the previous Government.
I am sure that the hon. Gentleman would agree that there is a vast difference between the transport infrastructure in the north and the south, but that is a matter that we have already debated today. We certainly need investment.
The lack of housing and the lack of stimulus are causing difficulties for my constituents. There are hundreds, perhaps thousands, of hard-working, skilled people in Halifax who are looking for employment. It is time to give the businesses, especially construction firms, the necessary economic tools to get on with the job.
I have had hundreds of letters backing the Get Britain Building campaign. Dougie Wood and Chris Haigh are two men who are passionate about the company they work for. It was they and their colleagues who, through leading the campaign for Marshalls and Unite, led me to arrange a meeting with Mervyn King, the Governor of the Bank of England, during the recess. Following that meeting, there was a meeting with a member of Chancellor’s team, together with the Marshalls director, Unite and the Union of Construction, Allied Trades and Technicians. We took with us a list of shovel-ready projects as suggested by the Governor of the Bank of England. We stressed that it is no good giving more money to banks that are not lending to companies such as Marshalls. The directors of Marshalls, a company based in Halifax for more than 130 years, stressed to both the Governor of the Bank of England and the Chancellor’s team that times have never been as bad for the company in all its history as they are now.
I cannot work out whether the Government have fully grasped the nature of the social housing shortage. If they have, we really are in trouble, as nothing has been done about it in the last two years. If they have not, now is the time to increase the affordable housing budget, to tax the bankers’ bonuses and to get people, and especially young people, back into work. It is time for the Government to start listening, taking some action and investing in the housing industry, and to get places such as Halifax, which have been hit hard by the double-dip recession, working again.
I start by congratulating the Minister on his new position. In this short speech, I would like to acknowledge what the coalition has done. I do not know what the promised announcements will be, so I would like to comment on what I would like to see and what the Liberal Democrats would like to push for in the future. Throughout, I feel that we need to acknowledge that some of the problems we are discussing have indeed gone back over decades and under all previous Governments.
Just to keep up with the rate of household formation, we need between 206,000 and 282,000 additional homes each year between now and 2025, yet the average number of new homes added to the housing stock each year in England over the last two decades has been just 160,000 and is currently even lower than that. It is quite clear that we have not met housing need. We need to think about housing demand, too, because the fact that people cannot access mortgages at the moment is another cause of reduction in demand. There is a shortage of mortgage finance, which I feel has to be addressed. I acknowledge, however, that the coalition has done much to help first-time buyers.
I want to concentrate on the supply side, while acknowledging that both demand and supply are important to the issues we are addressing. Undoubtedly, investment in housing would provide an important kick-start to the construction industry, and hence to the economy. We know of the massive multiplier effect of everything spent internally in our country on the construction industry. It is a win-win situation, with more jobs and more money created for our own economy, without particularly sucking in imports.
Social housing waiting lists have grown by 70% over the last 10 years. Over 1.7 million families are stranded on housing waiting lists, yet social housing stock has fallen by 420,000. We have seen very little council house building. My hon. Friend Sir Bob Russell repeatedly questioned the last Government on that point. We want to see councils building more.
The coalition Government have taken some significant steps to give local authorities more freedom to raise more money in order to invest in their local areas—for example, the new homes bonus, tax increment financing and the community infrastructure levy. Reform of the housing revenue account is also important, as it leaves local authorities free to determine how housing revenues are invested. However, there is the cap on borrowing, and I agree with previous speakers that we should be looking to lift it and secure more powers for local authorities to borrow and invest in councils. Securing private finance is critical, and we need to explore further how the long-term investment needs of pension funds and insurers can be met through housing.
The coalition Government have increased local authority new build. We have the new homes bonus, the one-for-one replacement condition attached to the right to buy, and the new “affordable rent” model, which will provide 170,000 new social and affordable homes. However, as a Liberal Democrat I should like more local rather than centrally led decisions to be made on the right to buy.
The coalition is taking steps to provide more land for development by freeing up public land and trialling land auctions to enable more homes to be built, but I am sure that more can be done. For instance, there are 300,000 or 400,000 existing outstanding planning permissions. I think it outrageous that, when planning permissions have been granted, developers come back wanting to intrude on our green belt. We need a stronger “use it or lose it” policy on planning. That is a Liberal Democrat point, by the way. We should also think about the environmental impact of housing. The challenge is to deal with the dilemma of quantity versus quality. It is more expensive to provide homes that meet renewable and energy efficiency conditions.
I congratulate the coalition on its empty-homes policy. We have taken big steps in this regard. There are 720,000 empty homes in England, 279,000 of which are considered to be long-term empty properties. Under the last Labour Government, there was no dedicated source of central Government funding to tackle empty homes, but the coalition Government have established a £100 million empty homes fund and some really good schemes to help people to return empty homes to use. The new homes bonus is paid in such cases, and there is also an empty homes premium. I pay tribute to my hon. Friend Andrew Stunell, who initiated the premium, and congratulate him on the work that he did in the Department for Communities and Local Government. I also pay tribute to Robert Neill.
I want to discuss some policies that have not yet been mentioned today. The first is the bedroom tax, or under-occupation penalty, which is blatantly unfair to social housing tenants. Many of them have lived in their properties for a considerable time and regard them not as housing stock assets but as their homes—homes with memories, in which they have built their lives surrounded by families and friends. Leaving that aside—if it can be left aside—I have to say that this blanket policy shows absolutely no understanding of the mix of housing stock in boroughs such as Wigan. Members of Wigan and Leigh Housing, my local housing trust, came to London to meet the previous Housing Minister—who has, shall we say, gone on to higher things—to explain the current predicament.
Wigan has an over-supply of three-bedroom properties, which constitute about 50% of our social housing stock, and not enough one and two-bedroom properties. More than 4,300 of our 22,500 tenants will be affected by the under-occupation penalty, and they will have no real choice. They must pay the penalty, or move to private rented properties that will cost more. It has been estimated that if only a quarter of them want to move, it will take 10 years to re-house them at the current rate. In the meantime, how are they to pay the penalty? There is already concern about the rise of the payday lenders among tenants of social housing. Our tenants are taking out payday loans to maintain their household budgets because of the increased costs of food and fuel. Wigan has been described as one of the most car-dependent communities in Britain: people need their cars in order to get to work.
All those problems will be compounded by the bedroom tax, which will force residents to pay at least 14% for one extra bedroom and 25% for two. It should not be forgotten that housing benefit is an in-work benefit which is paid to hard-working people on low incomes, or to pensioners who have worked all their lives with little or no occupational pension. The bedroom tax will add a further pressure to their already overstretched income. It will push them into the outstretched arms of the payday lenders in order to cover their day-to-day living expenses, causing them to fall into a spiral of debt.
What point is there in forcing my constituent who is a single dad who has his two children at the weekends to move into a non-existent one-bedroom property? How will that help the family? If he does not move, he will be charged to remain where he is. How will his financial contributions to his children’s upbringing be maintained? This is both unfair and unworkable.
How will forcing the grandparents who came to see me to move into a one-bedroom property help their family? They look after their grandchildren at the weekend so their mum can work. They are all doing as the Government wish by supporting their family, but they will be forced to pay for that. That is not justice or fairness; it is taking money from those who can least afford it.
I have mentioned how difficult it is to balance the family budget, and another measure may well add to that problem: the payment of housing benefit to the tenant rather than directly to the landlord, where the tenant wishes. I have had direct experience of that, as I was involved in a pilot scheme with the private sector when the private sector tenants were paid direct. Our local authority was so concerned about this matter that the Labour government gave additional money to pilot areas in order to work with the private tenants on budgeting and opening bank accounts and to identify their vulnerabilities. That work was greatly needed. An independent assessment of the pilot credited the success of that St Helens scheme to the intensive work done by Citizens Advice locally. However, no extra money will be given for that work in future, and Wigan and Leigh Housing and its tenant representatives are very concerned that payment arrears will result if this scheme is introduced without proper financial guidance and support on money management. They also fear that there will inevitably be evictions and a rise in homelessness, and Crisis is also concerned about that.
I am also concerned about the extension of the shared accommodation rule to the under-35s, as that will also exacerbate the homelessness problem.
Wigan and Leigh Housing is working with Citizens Advice to assist people affected by this rule by drawing up property lists and trying to match properties and individuals, but people are rightly concerned about moving into shared accommodation with others whom they do not know, and some are saying, “Actually, I’d rather sofa-surf than do that.”
These changes are individually harmful, but they are cumulatively disastrous, and they show no understanding of the northern towns and their people, or their problems. They will not create sustainable and supportive communities. Instead, they will hit individuals who are trying to do the right thing. Debt levels will increase, and the payday lenders are already circling my estates, waiting to prey on people being forced by the Government to pay to have a family life in their own community.
Order. Some 13 Members still wish to speak, so I shall now reduce the time limit on speeches to five minutes. I hope that, with a bit of tolerance on all sides, that will enable everybody to speak, but the more interventions—and therefore time added to speeches—there are, the less likely it is that those towards the end of the list will get a chance to contribute to the debate. There is nothing further I can do about that; it is now in Members’ hands.
I hope colleagues will forgive me if I ramble through my remarks fairly swiftly, as I have quite a lot to get through.
The lack of housing for British people is of great concern to all of us, and we have to ask ourselves why sufficient homes are not being built. It is a simple matter of economics. Interest rates may be low, but the country is deleveraging. Private individuals are very cautious about increasing debt, which means fewer individuals are looking to buy. Banks are strengthening their balance sheets, and reducing their risk profiles and setting aside capital. The ultimate consequence is that there is a smaller pool of people who want to borrow, and fewer of them are qualifying for borrowing, and less money is available to lend to them. In short, this all boils down to a reduction in the amount of capital available to build homes. Is it any wonder, therefore, that house building numbers are falling?
Although £19.5 billion of public and private funding is currently lined up to be spent on affordable housing by 2015, there is very little land to build it on. That land relies on section 106 agreements from private housing developments and they are not happening.
Back in the earlier part of this year, the Chairman of the Select Committee, Mr Betts, proposed that we reported on the financing of new housing supply. That report was published in May. The broad conclusion, as he has already said, was that there was no one silver bullet with which the housing deficit could be removed. The crucial question is now what can be done and whether the Government are acting on the possibilities.
A number of options are available to the Government and action has been taken on some. First, crucially, we must keep interest rates under control. We are borrowing internationally at the lowest interest rates in history and that is a crucial part of the package. Any serious upward tick in rates would almost immediately increase the strain on existing owners through their mortgages, reduce the already low level of building and price further prospective owners out of the market. The clear implication is that any measure that added significantly to the debt burden the country is carrying would be likely to be entirely counter-productive in the medium term and might even reduce the number of houses available.
Secondly, the Government can look to their own assets. They can provide public land for development, such as that brought forward under the “Buy now, pay later” scheme, which has been widely welcomed. Grainger plc said that that would help it run a build to rent programme. The Association of Greater Manchester Authorities reported to us that it was actively investigating investing its pension funds in rental accommodation on land that it would provide, with both funds coming together to make a cohesive package.
The Government can provide guarantees to lenders and borrowers, and we have heard a great deal about that with the announcement of the Get Britain Building programme and the Firstbuy equity deal. We have had the NewBuy guarantee and just at the beginning of August the funding for lending scheme was announced. That is an 18-month programme to allow almost unlimited borrowing by swapping assets for funding from the Bank of England to invest in small businesses and lend to private individuals to buy homes.
We can also return the control of local council housing assets to councils. That programme was started by the previous Government, and I salute them for doing so. The Smith Institute said that £25 billion of real-terms investment will be made available for housing through that change. I have concerns, shared by the Chairman of the Select Committee, about debt caps, which we ought to re-examine, and the sharing of debt limits across councils. It seems to me that there is extra capacity in the system that could easily be brought into play, allowing us to build more social housing.
There are the new rules on right to buy, but care must be taken to replace not only one for one, but, if at all possible, like for like in the area in which property was sold, particularly in small rural villages. New council developments to be let at a discount on market values can also be very valuable. We took evidence that the affordable rent programme will make a contribution; it will be limited over time and geographically and there will be restrictions, but it will help in the end.
I will end there, but there is no doubt that we are at the end of the tail of an extraordinary debt crisis, which was left to us by the previous Labour Government. Essentially, that legacy of debt restricts the amount of capital available in the marketplace and the options available to the Government. I believe that they are doing all they can within the envelope for borrowing and I commend them for what they do.
It does not take a genius to recognise that investing in construction at a time of economic difficulty can have a positive impact. The Secretary of State for Business, Innovation and Skills said in June:
“The experience of the 1930s tells us, however, that it is possible to build, and grow, out of deep economic crisis without abandoning deficit reduction.”
Even in the Government, there are people who believe that house building is a key part of getting the economy going. Even the Prime Minister said last November:
“We will restart the housing market and get Britain building again.”
The only problem is that the Prime Minister did not tell us when he would restart that housing market.
House building is in decline. The Government have used up all the house building credits bequeathed to them by the previous Labour Government, and now that they are having to rely on their own policies, house building is falling. Affordable housing starts have declined by 68% over the past year. Overall house building has decreased by 10%. That shows that the Government have failed. They have not used house building to stimulate our economy, which is part of the reason why Downing Street has taken us into a double-dip recession.
In many ways, Downing Street has failed to listen to the Secretary of State for Business, Innovation and Skills—it could have used construction to drive the economy forward. Having said that, the Secretary of State has also been part of the problem, ably accompanied by the new Minister for Housing and the BIS team: they have pushed us towards a bank lending crisis. The new Minister for Housing, when part of the BIS team, introduced Project Merlin, which failed. They then tried a loan guarantee scheme. That failed. They then tried funding for lending. That has failed. Two and half years into their time in government, the banks still are not lending.
It is the same story in housing—NewBuy, Firstbuy, the new homes bonus and the Growing Places fund; the list goes on—but what we do not have is a co-ordinated effort to get people taking up mortgages and to get houses constructed for them to move into. In practically every aspect of housing policy, there has been failure.
There are people in Rochdale crying out for social housing and for jobs. If the Government had got their housing and lending policies right, we could have had the construction jobs and the homes in places such as Rochdale. Sadly, we have neither. If that is not bad enough, the Government are dismantling the housing safety net that helps many people. More people are becoming homeless. It costs more to help people who are homeless than it would to stimulate the housing economy and support the housing charities that support homeless people.
My hon. Friend Yvonne Fovargue mentioned the bedroom tax. People on housing benefit will have to pay a supplement to stay in their home or they will have to move out. One important point regarding the bedroom tax, which I do not believe the Government have considered, relates to community cohesion. Rochdale is a case in point, although this will apply to many towns and cities across the country. The bedroom tax will mean that many people who have lived on council estates for many years, and brought their children up on those estates, have to move out. Owing to the demographic changes in places such as
Rochdale, it is inevitable that a perception will build up that members of one community are being forced out of their home for the benefit of those from another community. I ask the Minister to address that issue of community cohesion, because it will cause real problems and there is the possibility of its being exploited by the far right.
I ask the Minister to take a sober view of housing policy and urge him to use housing and house building as key drivers to create jobs and re-establish the economy that we desperately need in Britain.
After listening to the measures outlined by the new Minister at the Dispatch Box, no one could accuse the Government of being negligent in their approach to house building. That contrasts with the record of the previous Government. The number that was not on tip of the shadow Minister’s tongue when I intervened earlier is 78,340, which is the figure for new houses started in the last full year of the previous Government. It was given to the House by Andrew Stunell. The shadow Minister told us that he is happy to support the record of the Labour Government, but that number pales into insignificance when we consider the fact that in 2011, the first full year of the coalition Government, 98,250 houses were started—a rise of 25%. Those figures make the motion ridiculous as it claims that housing starts are down.
We all agree, however, that we need to build more houses. Statistics from the industry analysts Glenigan have been published today in The Daily Telegraph, under the headline “2,000 new building projects approved every month since planning shake-up”. The article goes on to detail how the proportion of planning applications that are successful has increased by 8% since the introduction of the new national planning policy framework, from 73% in November 2011 to 81% in March 2012, leading to more consents in total, from 75,000 to 85,000. That is 10,000 more consents, or 13% more approvals.
Does my hon. Friend agree that 10,000 additional consents could mean an awful lot more properties, because some consents will be for many dozens, if not hundreds, of properties?
Absolutely. The national planning policy framework is starting to bear fruit, so it was disappointing to hear Labour Members criticise the changes.
Planning delays have been stifling house building. I want to focus on planning guidance and the delays that planning applications consultees continue to be able to cause in the development process. The Government’s consultation paper on statutory consultees drew attention to 27 external bodies. It stated:
“This can mean authorities are reluctant to determine applications without input from these key bodies.”
That is where planning delays come in. I refer to my own constituency of Rugby where, I am proud to say, we have a very positive attitude to housing development and recognise the need to grow to provide accommodation for new households. Work has just started on the Gateway site, which will provide 1,300 new homes.
In addition, over a period of time landowners have been working on proposals for a major house building site that will generate 6,200 homes—the former BT mast site. It is just the kind of development that the Government recognise as necessary to provide housing and, as Members across the House have indicated, move the economy forward. So what is the problem at the mast site? Even though the development complies with the local core strategy and the land was previously developed, the proposals are being slowed down, in my view needlessly, by stakeholder agencies such as Natural England and English Heritage, which are concerned about their own single issues, which I believe are being given disproportionate weight.
In a second case, a constituent has applied to develop a site adjacent to a pond. As a result, a full newt survey has been requested before development can proceed, even though it is known that the habitat does not and cannot support newts. Again, that is holding up development. Even post-NPPF, external bodies have the powers to frustrate development. The NPPF was a good start, but there is still much more to do, and the Government recognise that in the new economy Bill, which will focus on reducing the time allowed for repeals and reviews, among other things, and help both development and the economy.
The substantive motion states that
“the Government needs to take urgent action to get the economy and house building going again”.
They have and they are. I congratulate the previous Housing Minister on all his hard work in supporting the housing industry and look forward to the new Minister taking the Government’s agenda forward. Knowing his previous ministerial role on business, I have every confidence that the Government’s housing strategy is in safe hands.
Does my hon. Friend agree that many Conservative local authorities, such as Medway council in my constituency, are building far in excess of their affordable housing targets, which clearly shows that there is a massive increase in housing development in certain parts of the country?
I happily agree with my hon. Friend. It is great that there are authorities that are willing to deliver houses, but they remain frustrated by the issue of consultees. I very much hope that the Government and the Minister will pay particularly close attention to the issue in the coming months.
May I first draw attention to my interests, as declared in the register?
I intend to focus on three themes. First, I will debunk some of the myths and, frankly, the abuses of statistics that we have heard today from those on the Government Benches. Secondly, if time allows, I will offer my analysis of why we face this dire situation. Thirdly, I will suggest one practical way the Government could and should act to start new house building and help to get us out of the mess.
The Government know that the housing situation is dire—their own statistics tell the story clearly—but rather than face the facts, they have been pretending, through what is, frankly, a shameless abuse of statistics, that the picture is rosier than it really is. The former Minister for Housing was at it all the time and the Prime Minister was at it today, claiming during Prime Minister’s questions that housing starts were up. The Government amendment to the motion repeats the error and even the new Minister for Housing, for whom I have great respect and whom I welcome to his post, repeated the same incorrect claim.
The only way in which the Minister can justify the completely non-credible claim that housing starts are up is by comparing the latest figures with those for 2009. Why 2009? There is no statistical justification for plucking out of thin air a year that simply produces a good outcome. It is as if a Health Minister, faced with an epidemic, chose to compare fatalities during their period with those of 1348, when the black death was ravaging the country.
The truth of the matter is that 2009 was the depth of the recession and the figures were very low, but they recovered because the Government of the time had put in place measures to help recovery. The second quarter of 2010 was a significant period because government changed hands. I do not think that this Government can claim, although the previous Minister for Housing tried to, that the figures for that quarter were their responsibility, but by that quarter, starts were back up to 33,000.
If the new Minister looks at his figures, as I hope he will—his officials will be able to guide him on this—he will see that in no quarter since then has that figure been exceeded. In the latest quarter, the total number of new starts was just 23,000—10,000 fewer than in the second quarter of 2010. Can we put an end to that abuse of statistics? Yes, the recession had a dire effect, but we were coming out of recession when the Government changed, and since then housing has been flatlining at levels hopelessly inadequate in comparison with the need for new housing. We have to find ways of stimulating new growth.
Time is limited, so I shall go to my final point—my modest suggestion about how the Government can get some new house building started. The Minister will know that the worst hit area has been social housing because of the serious cuts made in the early months of the coalition in the social and affordable housing programme. That has drastically cut back investment in new social and affordable homes. I support the Government’s measures to try to lever in more private finance, although there are disadvantages to do with rent levels, which will have knock-on consequences for housing benefit. The measures are nevertheless an intelligent way of trying to get as much building as possible. However, Government investment is not adequate or sufficient.
I know that the Government will say, “We can’t put any more money in,” so let us look at what is not being well spent at the moment. There it is, in the Minister’s own Department—he has only to look at his budget to see £250 million a year, over the next three years, allocated to the new homes bonus. I wholly disagree with Annette Brooke, who spoke earlier about the bonus.
It gives absolutely no benefit at all—there is no evidence to show any positive impact that it has had. The scheme itself is opaque. The linkage to the granting of planning consent, which it is supposed to incentivise, is so tenuous that, not surprisingly, no serious commentator believes it is having a beneficial effect. But it is very expensive, costing £250 million a year over the next three years.
If that money were reallocated to direct investment in social and affordable housing, that could help to get things going. Linking schemes for social investment with private investment and mixed developments would help give greater confidence in the market as well. Steps can be taken, but they require the Government to be intelligent in their use of money and recognise that they have to find ways of investing to get us out of the serious mess we are in.
I want to focus briefly on three issues that are having a big impact in my community—what type of houses we build, where we build them, and how many we build. Those are the three crucial aspects to the whole debate and they are having an enormous effect in my constituency and community.
I shall start with the issue of how many houses. The Secretary of State is not in his place, but to his credit the first thing he did was abandon the disastrous regional spatial strategy figures that were having such a detrimental effect on the green belt in and around the city of Nottingham. Some of my local authorities are resting on those figures from the regional spatial strategy. I sincerely hope that the Minister can find ways of convincing them to reconsider the numbers of houses they are going to plonk in the green belt and focus on where and how those houses are being developed because they are having an enormous impact on the sustainability of the local communities. Where windfall properties appear because a petrol station or public house becomes redundant and is redeveloped, some local authorities do not take those figures into account but continue to push up their housing ambitions, and that has a big impact on the green belt.
Let me deal next with what we are building. It is very important that we build houses that are appropriate to the communities in which they are placed. An elderly resident in a rural village location who is living in a three, four or even five-bedroom house might want to relocate in the same village, but if it has no elderly people’s accommodation they will be forced to move away from the community in which they have established their life, family and friends, and connections. If we can find ways of building elderly people’s accommodation within those village envelopes, that will allow people to move out of the larger house and into another property, thereby freeing up the property ladder below them. We do not want to force people out of their homes, but we need to encourage them to stay within their communities. By the same token, in former coalfield villages where the average size of a house is two or three bedroom, there is little point in allowing developers to build four and five-bedroom houses, because they do not slot into those communities.
The most important issue is where houses are built. Some of my local authorities are not targeting brownfield sites. They should be developing former coalfield sites such as those in the borough of Gedling, but are instead putting their housing allocations in the green belt around the villages of Linby and near the town of Hucknall. There is funding available to address this. The previous Housing Minister developed a scheme whereby such brownfield sites could be unlocked because of the need for access roads and other infrastructure projects. Despite my writing to my local borough council to ask them to tap into that fund, it has decided not to do so but to allocate its housing allocations in the green belt. That is a tragedy for some of these villages, because the infrastructure cannot support what is there already, never mind the new housing. The village of Blidworth is the only local village entirely encircled by the green belt, and it already suffers enormous infrastructure problems regarding access to the road network, but, for whatever reason, the council has decided to allocate it an enormous amount of housing, causing a great deal of stress and tension for individuals.
This is about getting right what we are building, where we are building, and how much we are building. I believe in localism, but sometimes my local authorities do not make the right choices.
I congratulate the Minister on his appointment to what must be one of the most exciting jobs in Government. He will be at the heart of improving our economy by building more homes, and I am sure that it will be a really exciting period. I thank my hon. Friend the shadow Minister for calling this debate at such an apposite time.
I would like to ask the Minister to reconsider the introduction of the provision in section 124 of the Localism Act 2011, on the forced discharge of a family into the private sector if they are homeless. As the law stands, if a family are recognised as being homeless, they can be offered a property in the private sector, and they can be discharged to it if they accept it, but they do not have to do so. Under the provision, they would have to accept it. My reason for opposing the provision is not in any way because I am anti-private sector; it is because I believe that we should do everything we can to ensure that work pays. Work is the best anti-poverty strategy that anybody has ever known. It represents a moral good for individuals, helps them stay healthy and gives a good example to their children. The provision will force working families into a benefit dependency from which they are unlikely to ever be released.
I want to detain the House with three or four examples—depending on the time available—of how that would affect people in my constituency in south-west London. Although it is an expensive area compared with some other places in the country, it is certainly not in London terms. In the first example, Mr Brown is a postman and Miss James works in an after-school club where her two children go to school. They have an income of £26,000 a year, which is roughly £500 a week. If they were discharged to the social sector, the median rent for a two-bedroom property would be £95 a week. On their income, they would not be entitled to any benefit—they would be discharged, off benefit and would have to pay their rent.
If that same family on the same income were discharged to the private sector, the median rent would be £196.15 a week. On their same earnings, they would receive housing benefit. Even if their income increased by £200 to £700 a week, they would still get approximately £20 a week in housing benefit, but they would be £83 worse off than families in social accommodation.
If Mr Brown and Miss James’s income was £600 a week and it was increased to £700 a week, not only would they incur the cost of child care, travelling to work and so on, but the loss of their housing benefit would be such that they would gain only £25 out of that additional £100 of income. How is that an incentive to go to work? The marginal rate of tax would be 75% in the private housing sector and 32% in the social sector. That is not an oddity—I could give many other examples.
Mr and Mrs Ossai have four children and they lost their home as a result of the collapse of Mr Ossai’s business. Mrs Ossai is a district nurse—a fantastic person whom people would want to be their neighbour. The family’s income now stands at about £34,000 a year, which is £650 a week. This lady was willing to accept a tenancy in the private sector, for which the median rent is £253 a week. That meant that even if her income was £1,000 a week, she would still get housing benefit. I asked her not to accept that offer from the council—thereby earning the hatred of its housing department—but she is now in a three-bedroom flat in what is not the best estate in town, but in which her family can live and whereby she can earn enough to receive no benefits and to be independent. Moreover, she is a fantastic neighbour, because all the families, elderly people and those with kids who live nearby can go to her and see her going to work as a district nurse. She is a role model.
This is about communities that have all sorts of people, and it is about providing role models and getting people off benefits, but the Government’s simple provision will force, according to the their own figures, 20,000 working families into housing benefit, and that is wrong.
I welcome my hon. Friend the Minister for Housing to his new role. I am afraid that he is likely to be well and truly harangued by myself and my hon. Friend Stuart Andrew over the coming months, because, to echo my hon. Friend Mr Spencer, we have a real situation in our city of Leeds, where there is pressure on the greenfield and the green belt, even though 24,000 approvals have been made for brownfield sites. This is putting huge pressure on the local communities and on the amount of resources that Leeds city council is spending on trying to preserve the greenfield and the green belt.
I want to suggest a couple of routes for the Minister to investigate. First, will he look at the incentives that we can give house builders to build on brownfield land? Hilary Benn is no longer in his place, but I think that he would recognise that a huge area of Leeds—I know that this is supported by Mr Mudie—needs regeneration. That regeneration is not happening because developers can make a huge amount of money and make vastly greater profits by coming out into my constituency, which is on the edge of Leeds, and building four or five-bedroom houses on greenfield sites, where there is a premium attached because of the countryside views. We can have this argument, but we cannot stop the developers doing that because it falls within the planning laws. Under the Localism Act 2011, Leeds city council is now responsible for bringing in plans to control that area further.
We need to be more proactive in incentivising house builders not only to get building, but to do so where we want them to build. I suggest to the Minister for Housing that he and the Chancellor of the Exchequer should consider introducing tax incentives for companies that build on brownfield sites. There are some 24,000 approvals in Leeds, which are ready to go. Those houses can be built, but the house builders are choosing not to build them. They have land-banked the land and could start building tomorrow if they wanted to, but better profits lie elsewhere. We could increase the profitability for companies of building on brownfield sites before greenfield ones. Perhaps we should also look at how section 106 agreements work. That would hopefully address the problem. I put that to the Minister purely as something for him to go away and think about, and to perhaps come back to me on.
One of the greatest concerns is the east Leeds extension project, which has been on the books in Leeds for decades. It is getting closer and closer to happening as we speak. Our argument with the house builders is that they want to start building the houses before the new dual-carriageway link to the ring road that is part of the expansion project. That would put intolerable pressure on the existing infrastructure in the area. We need to look at how we can say to house builders, “You cannot build a single house until you have put the infrastructure in place to cope with the new demand.”
When I was a councillor in 2007, we had severe flooding. Towards the bottom of the topography of my constituency, which is at its north end, there is a huge run-off area. The east Leeds extension project proposes to build on the greenfield land that allows that water to soak in. We need to look at a mechanism whereby we can say to the house builder, “Not only do you have to build the link to the ring road, but you need to build a storm drain under the development that will carry water away.” As I have said, the hon. Member for Leeds East has huge flooding problems that relate to the same area. By working with the community and helping to protect their houses from flooding, we may be able to get this house building moving forward with less resistance, because the community would be able to see the benefits for all.
If we are to take pressure off greenfield sites and get some of these 24,000 homes, the vast majority of which are affordable, built on brownfield sites, we must look at the taxation system and section 106 agreements to see whether we can incentivise the house builders to move to those areas before they build on the green fields.
I draw the House’s attention to my indirect interests, which have been mentioned before in the House.
I welcome the new Minister for Housing to the role that I consider to be the most important in government outside the Cabinet. It is arguably more important than several of the recently invented roles in the Cabinet. Yesterday, we saw the end of the tenure of Grant Shapps in that office. He said that his tenure should be judged on a simple golden rule: if he delivered more homes than were delivered under Labour, he would consider himself a success. On his own test, he has failed. My hon. Friend Jack Dromey rightly drew attention to the national figures. In the south-west, the number of homes being completed is lower than in 2009, to use the year that the Minister, the former Minister and the Prime Minister have used. That figure is 7% lower this year than it was last year.
The knock-on effects are startling and shameful to behold. Statutory homelessness in the south-west is up 15% in the past year and rough sleeping up 24%. Those are the brutal consequences of a Government who, for all their bluster and sunny language, have failed to understand the nature of the housing crisis, set their aspirations low and lacked the will to deliver.
Nowhere was that better evidenced than by the Secretary of State and the former Housing Minister willingly offering a 60% cut in the housing budget in the 2010 comprehensive spending review. In its stead we have had a push-me, pull-you approach to affordable housing, with the Department for Work and Pensions reducing housing benefit while the Department for Communities and Local Government’s affordable rent model has not only made social housing unaffordable for hard-working families on low incomes but, by the DCLG’s own analysis, will increase the housing benefit bill by billions of pounds. We have heard about the bedroom tax, which is also hitting hard-working families, and the council tax benefit cut is coming. Like every other MP, I have people in my surgery who are in tears because they cannot cope with their housing situation.
The Government have lacked a joined-up, effective strategic vision for housing provision, and their aspiration of 170,000 new affordable homes is dwarfed by the 256,000 affordable homes that Labour delivered in the last Parliament despite the credit crunch and the global banking crisis. In the past two and a half years, the Government have refused to take the necessary action to deal with a crisis of their own making. The former Housing Minister talked a good talk, but for all the effective media spin, nothing substantial has happened and the numbers keep getting worse.
Labour’s call for a tax on bankers’ bonuses to kick-start the construction industry and deliver an additional 25,000 new homes was rejected by the Government, who instead chose to hand a £40,000 tax cut to millionaires. Ask any housing expert and they will say that the only way to get new homes delivered in right place and of the right size to meet needs is to invest capital. I very much hope that the new Minister, with his understanding of construction and development and an open mind, will consider seriously how he can make the case for capital investment within the Government. My right hon. Friend Mr Raynsford has given him a good starting point.
The Government continue to say that the problem is with planning. Across the country, however, there are tens of thousands, if not hundreds of thousands, of unused planning permissions. Those potential homes are not being built because financial backing is not in place, the banks are not lending and potential buyers cannot get a mortgage. The Government want to open the debate about greenfield land, which is a running sore on their own Benches. Government Members have raised some concerns about it today. However, people across the country whose lives are on hold will continue to pay the price. They are not just families on council waiting lists, dismayed by the Government’s decision to stop investing in new homes for social rent, but young professionals who once saw a simple route through renting to home ownership. They now find themselves in insecure rented accommodation in a sector that the Government have refused to regulate. The Government voted against our amendments to the Localism Bill last year that would have given renters greater rights and protections.
Last year, the number of homes started in Plymouth was down, and there is a 24-month build time for homes, which is not good enough. Plymouth city council recently wrote to the former Housing Minister asking for a meeting to discuss how we could invest in building 5,000 new homes, including through a significant self-build programme. I hope that the new Minister will agree to meet me and representatives of Plymouth city council. What this country needs now is not a plan B but a plan C—C for “crisis”, a crisis caused by the coalition.
I welcome the new Ministers to the Front Bench. There have been some excellent contributions to this debate, but I would like to set out some alternative issues that are having an impact on new build sales. I do so on the basis of my time as a councillor from 2000 to 2010—a time of the last Government’s house building at any cost, which hit residents’ quality of life. My speech will be a whistle-stop summary of some of my concerns.
First, the last Government were hell-bent on high density rules, which saw houses packed in at the cost of parking spaces, creating dangerous problems. They also built on valuable open spaces. Following the successful Olympics we rightly hear concerns about school playing fields, yet the last Government were all too happy to build on those useable open spaces, leading to long-term problems of childhood obesity.
As councillors, we were also forced to deal with the problems caused by imposed housing targets. My local area of Swindon had already built 20,000 houses over the previous 20 years, making us one of the fastest-growing towns in the country, if not the fastest-growing, but we were told that we would have to find another 36,000 houses over the following 20 years. Such targets create confrontation and delays as angry local residents fight the unapproachable planning system.
We had problems that I set out in a ten-minute rule Bill. In new build areas that remained unadopted, residents were paying council tax or street maintenance, yet the developers remained responsible. The developers were often very good when they were selling the houses, but when they had sold the last house, and until the area became adopted, they were all too often poor at maintaining an area. I had estates that had not been maintained for more than 17 years, with work waiting to be done before that area could be adopted, yet residents still had to pay, and that did not encourage people to buy houses in those areas.
We have had a growing problem with the service and management charges in new blocks of flats. The rules are that, when the final development of that flat area has been completed, the residents have an opportunity to choose or even set up their own management company. However, many developers in management companies have found a way to delay that point, and residents who were told when buying the house that the service charge would be, for example, £1,000 a year, suddenly find the management company making pathetic excuses to hike up the prices, taking valuable money from hard-pressed residents who have no choice but to pay or be taken to court. My hon. Friend Mr Buckland and I urgently request a meeting with the Minister to discuss how we can help such residents, who are increasingly targeted by cowboys who parade themselves as management companies.
We have heard much about the banks. Earlier, I challenged the shadow Housing Minister because the previous Government had an ideal opportunity to deal with the banks. They were at the Government’s mercy when the Government rightly came to their rescue, and they could have imposed some incentives and direct instructions, particularly to help first-time buyers, who are now finding it difficult to access mortgages.
I thank my hon. Friend for that intervention. That would have been my next point, but I am conscious of time, so I will be supremely efficient and simply pay huge tribute to my hon. Friend George Hollingbery, who covered that point. It is clear that, if the Labour party found itself in Government again and wrecked our triple A credit rating, interest rates would rocket, and we would have a real housing crisis on our hands.
Many important issues have been raised today, but I urge Ministers not to forget the importance of addressing quality of life. If we are to restore the long-term appetite for new build housing and new build housing estates, we must improve their reputation. The fear factor is a bit like that experienced when buying a new car in the knowledge that as soon as it is driven off the forecourt, 30% of the value is lost. So many issues put people off going to those new build areas, which have already got planning permission. They should be addressed, because that will help the housing market and, crucially, the long-term quality of life of residents of all ages.
I commend to the Minister the advice of the Chair of the Select Committee to read the very good report that it prepared on this subject. It gives excellent examples of how to start to tackle the housing crisis. The evidence alone is worth reading for good examples from not only this country but throughout the world that we might embrace.
Alec Shelbrooke talked about the challenges of the green belt from the perspective of representing a seat outside a northern city. I am in a similar position and face threats to every small town and village that I represent. I hope that the Minister will respond to the hon. Gentleman’s comments about providing incentives for brownfield development because they are much needed. There are good examples of brownfield sites around the country that were made viable under the Labour Government. Perhaps the Minister will consider what is needed to achieve such development during his tenure.
Many of my constituents need housing. Many come to me for help with stories of the difficulties of finding anywhere to rent or buy. In Sefton, there are precious few homes available. In the town where I live, it can take up to eight years for those on the housing list to be given a house. The issue is of huge concern, yet the options are severely limited. Of course people want to stay in the town or village in which they live or grew up and where they have families and friends, and I hope that the Minister will address that. My hon. Friend the shadow Minister referred to the need to look at the local nature of housing need, and that is one of many issues to be resolved.
There are many practical actions that the Government could take to help. The borough of Sefton contains 6,000 empty properties, and although VAT on renovations is charged at 20%, there is no VAT on new build properties, which makes it harder to bring empty properties back into use. Encouraging the renovation of empty properties is an important step and would help the economy. The tax on bankers’ bonuses is mentioned in the motion, and the proposed construction of 25,000 affordable homes is of great interest. The lack of affordable homes to rent, to buy or for shared ownership is the crucial problem facing my constituents and those of all hon. Members.
The Chancellor called for the planning system to be speeded up to help the construction industry, and in an earlier intervention I mentioned the need to use existing planning consents. Shaun Spiers, chief executive of the Campaign to Protect Rural England made the point better than I can: if we are to have the homes that are needed, particularly the affordable homes, we need to use existing planning consents rather than seek more.
In Formby in my constituency, a representative from the developer David Wilson Homes told those attending a recent public exhibition about plans to build 300 houses on green-belt land. Hundreds of residents who turned up to the meeting were told that the development would go ahead and that there was nothing they could do about it. That exhibition coincided with the Chancellor’s announcement about making planning easier, and the concern is that developers are queuing up to build on the green belt in places such as my constituency—and many other constituencies with rural or semi-rural areas—because it is more attractive and financially more advantageous.
I hope that the Minister will listen to hon. Members from across the House who have called for practical suggestions that will protect the green belt as far as possible, and that he will take on board suggestions from members of his own party as well as from the Labour party on solving this very real housing crisis.
I believe in two things: first, that everybody who can work should have the right to a job, and secondly that everybody should have a place that they can call home, whether in an urban or country area. Statistics show that the average age of a first-time buyer is 37 years—at the same age, my mother and father had been married and divorced and had two children—and according to Scottish Widows, that age will increase to 44 over the next couple of years. Average rent is £725, which is half the monthly wage of an average earner, and it seems that owning or renting a house, or whatever people want, is to become like walking on the moon or flying on a supersonic airline to New York—a thing of the past.
This debate has not been helped by the idea that somehow housing benefit is paid out to scroungers. It makes me absolutely sick and mad that the Prime Minister has placed a cap on housing benefit for political ends. He is not targeting people who are out of work; some 95% of the £1 billion increase in housing benefit has been paid to people in work. Seven out of eight claimants are people in work. The Government are not attacking those who are jobless; they are attacking those on low incomes. It is all very well to critique the Labour Government and for the Chancellor to appear on the Sunday programmes and say, “Oh, it’s all the fault of the planning regime.” I am sorry, but it is now the Government’s planning regime and if they have a problem with planning, they should do something about it.
I am not going to stand here and say the Labour Government were perfect. We need a quarter of a million new homes a year. If we are building only half that, something has gone wrong. The old ways will not do, so we need innovative measures.
The new Housing Minister, who has made the trip from the Department for Business, Innovation and Skills, spoke about enterprise zones, which can be successful. We have heard from other hon. Members about examples of where house building is working, but in other areas, such as inner-city London and other city areas, there is a problem. Could we introduce some sort of enterprise zone where there are innovative schemes to bring about house building? We could look at an example from France. When an electricity generator is built, those living nearby are compensated by having free electricity. Could we do something along those lines, and provide a new school or medical centre where there is a new housing development? I did some research before the debate and found out about the No Use Empty scheme in Kent, under which 21,000 derelict homes have been refurbished. Can we evolve that? The scheme can give owners £25,000 to refurbish buildings, which will encourage other banks to lend.
Those are innovative ideas. Time is getting on and I know that somebody else wants to speak, but I will say this: unless we act now, we are saving up problems for the future.
We have spent too much time on a tit-for-tat argument about which party has done best by housing. The reality is that both the Conservatives and Labour have done badly by housing, but I proudly say that Labour has done less badly than the Conservatives.
I shall make only two points. First, a housing crisis is building up primarily because we need 240,000 new houses a year but are building only around 100,000 a year. In that situation, we need a big housing drive, for two reasons. First, that is the best possible stimulus to an economy that is bumping along the bottom and which drastically needs to be stimulated by the provision of jobs. People need furniture and many other things when they buy a house—and in Grimsby they need pictures of me to put on the wall. We need that stimulus as quickly as possible. The second reason why we need a big drive is to deal with the crisis, but as other hon. Members have indicated, we need housing of a particular type.
We need a big drive on public housing for rent—I do not care whether it is social housing or council housing. We need to stimulate both those things for the two fifths of the population who cannot afford to buy at current prices. They will not get mortgages, but they need good housing. We save money on the health service, education, policing and social services by putting them in good housing. That should be the prime focus of the drive.
My second point is on how we can raise the money. We could and should issue municipal housing bonds so that local authorities can raise the money and stimulate investment in housing. The return will come from rents in an authority’s own area. That is a simple way of doing things. The bonds could even be bought by the Bank of England, just as it buys Government debt for quantitative easing. That is the drive that we need and we could finance it with municipal housing bonds.
Those are the two points I wanted to make. I welcome the new Housing Minister to his role, but he has a big job. It is important that he stimulates and begins the big housing drive right now.
This is an important and timely debate. Time prevents me from commenting on each of the contributions we have heard—there have been some excellent ones—but I shall pick out one or two. My right hon. Friend Mr Raynsford effectively debunked the Government’s flamboyant use of statistics and demolished the claims made about the benefits of the new homes bonus.
I welcome the Housing Minister for the second time today. He clearly has an extremely big job to do. We have not seen a failure to deliver on this scale since another Tory-Liberal Government failed to deliver on their promise to build homes fit for heroes for the families of soldiers returning from the horrors of the first world war.
Conservative Members used to talk about a property-owning democracy, but many would-be home owners are now trapped in private rented accommodation, paying extremely high rents and unable to build up the very high deposits necessary to secure a mortgage. Nowadays Members on the other side of the House talk about “an affordable housing revolution”, but they are presiding over the disintegration of affordable housing as we know it.
Is my hon. Friend aware that in constituencies such as mine a third of the population are living in private rented accommodation, both those in and out of work, are being denied sufficient housing benefit to pay the rent and are being socially decanted out of central London? That is destructive to communities and to family life. Does he agree that the Government have simply got it wrong on housing benefit?
They have absolutely got it wrong, and it is a complete scandal. If we are to have balanced communities, we need to create a situation in which people in different places on the income scale can live in the same community. What the Government are doing is completely wrong.
We have seen a massive fall in affordable home starts and a catastrophic collapse in social housing starts. When I was first elected, I was a member of the Communities and Local Government Committee, and I well remember the ministerial team coming before the Committee. The then Minister for Housing said:
“We believe in house building; we believe we’ve got a better way to get houses built. The idea is to get a system which delivers housing in this country.”
The Secretary of State chipped in, adding:
“And homes that people want to live in so kids can play in the streets and people come home with some pride.”
But they have totally failed to deliver on all the rhetoric on that day and since.
In her contribution, my hon. Friend Alison Seabeck touched on the fact that the Government are failing to deliver. Indeed, every one of the plethora of new initiatives announced by the Government has been an utter failure. As my hon. Friend the shadow Minister for Housing pointed out, in the month following the introduction of the NPPF, planning approvals fell by 37%, which accompanied the loss of 180,000 planning approvals as a result of the meddling in the planning rules by the Secretary of State when he first came to office. That puts into context the cavalier way in which the Government have addressed the whole issue of delivering decent housing.
The Government’s definition of “affordable housing” means that it is not even affordable to large numbers of people. Indeed, the ministerial announcements that we are seeing on various new housing initiatives would not have been out of place if they had appeared in George Orwell’s “Nineteen Eighty-Four” as the product of the Ministry of Truth. Perhaps we should rename the Department for Communities and Local Government.
The reason we face this massive housing crisis today is the abject failure of the coalition parties’ economic plan. They have cut housing investment at precisely the wrong time and, as a consequence, the construction industry is on its knees. It is a very labour-intensive industry and it could create huge numbers of jobs. Moreover, 80% of the products on a building site are procured from inside the United Kingdom. Construction is an engine for economic growth.
With all due respect to the Minister, I know it is his first day but it is his party that is in government, his party that is responsible for this housing crisis, his party that is presiding over a huge increase in homelessness and a significant rise in rough sleeping, and his party that is catastrophically failing in its duty to provide the houses that people need in this country.
What do the Government do in response to this huge and growing crisis and massive demand for housing? Rather than build the homes that people need, they tinker with measures that deny housing benefit to people under 25, inflict a crude housing benefit cap and impose a bedroom tax on people deemed to be under-occupying their homes, forcing people up to the age of 35 to live in a single room if they happen to be on a low income.
The human cost of the calamity with which we are faced as a consequence of the failure of the Government’s economic and housing policies is tragic and shameful. More people are homeless as a direct consequence of their policies, and more people are having to sleep on the street—as I mentioned, rough sleeping is increasing. This is completely unacceptable in the 21st century in one of the richest nations on the planet. I just hope that the new Housing Minister is not blinded by the failed ideology that resulted in the abject failure of his predecessor.
The country is crying out for, and demands, real action now, not more meaningless initiatives. We need a clear plan, because plan A has totally failed. The new Minister said that he was committed to increasing housing supply. I hope that he can deliver on that. We need a new tax on bankers’ bonuses to build tens of thousands of new homes, and we need a cut in VAT on home improvements to help people undertake that work and generate more jobs. These are the sorts of measures contained in our motion and that would give a boost to the construction industry. I therefore commend the motion to the House.
I am delighted to respond to this debate. It has been constructive and timely in a number of ways—from my personal point of view and in terms of the Government’s programme—and I would like to congratulate right hon. and hon. Members on what has been a genuinely positive and constructive debate. I want to respond to some of the positive ideas raised, because it is an important part of my learning curve and so that we can tackle a problem with which, as several Members have said, many Governments have been faced. The hyperbolic contributions from Opposition Members do not help us to find a meaningful and lasting solution. I have already outlined the steps that the Government have taken to address the previous Government’s failure to deliver sufficient housing supply. I want now to address some of the specific points that have been raised and that Members have asked me to touch on. After that, I shall conclude in the time left to me.
We began with the contribution from Mr Betts, who, to be fair, accepted that the Labour Government failed in several areas. I accept the point about self-build, however, and want to consider it further, because it is an interesting idea. Several Select Committee members have recommended that I read their report. I do not know whether they are on a bonus or chasing a sales target, but I am more than happy to look at it, because it is an important issue.
I draw attention, in particular, to the contribution from my good friend, my hon. Friend Robert Neill. I would like to put on the record my personal tribute to him. The House knows that he was a hard-working Minister, experienced and courteous to the House—a lesson that I shall try to follow. He worked on Ebbsfleet, as did my right hon. Friend Grant Shapps, where 23,000 houses went un-built in the 13 years of the last, Labour Government. My hon. Friend ensured that those houses can now be built. He was right to say that Labour Front Benchers are unfortunately suffering from what one can only describe as collective amnesia. Now they talk highly about helping our councils, but they forget that they spent 13 years trammelling local councils and preventing them from doing what they want to do. We are changing that; that is what the Localism Act 2011 is all about.
I thought Mrs Riordan was a little negative. She omitted to mention the contributions in transportation, infrastructure investment or the £770 million in the Growing Places fund—if I may, I shall come back briefly to discuss Halifax in a moment.
My hon. Friend Annette Brooke highlighted the fact that this is a long-term issue. She asked about the empty homes package, which is a package of £160 million. I am pleased to say that we are scrapping the old top-down pathfinder targets, which sought to demolish houses. We are looking to ensure that we refurbish them. I also very much welcome her comments about the new homes bonus.
A number of Members mentioned social housing issues. I will want to look at them, but to do so in the two minutes I have left would be to treat them inadequately, as they are deep and sustained issues.
Let me turn the underlying economic issue. My hon. Friend George Hollingbery hit the nail on the head. He was absolutely right to say that we have recognised that ensuring that we deal with the deficit is what keeps interest rates low. For many of our constituents—indeed, for millions of households—ensuring that interest rates remain lower for longer is vital to their being able to continue to afford their homes.
My hon. Friend Mark Pawsey talked about how the new Gateway site is a good example of a project that is progressing.
Mr Raynsford is an experienced Member in this field. We disagree on a number of areas, and he will not be surprised to know that the new homes bonus is one of them. Indeed, he might like to know—he might also wish to debate this with the hon. Member for Halifax—that Calderdale council is receiving £1.7 million from that bonus for 550 new builds. I suspect that there may be an element of tension on the Labour Back Benches.
My hon. Friend Mr Spencer talked about the important issue of ensuring that brownfield sites are developed, as did my hon. Friend Alec Shelbrooke. Getting the balance right between greenfield and brownfield sites is difficult. Wearing my old surveyor’s hat, I want to look at the issue further. As a practitioner, I dealt with how we regenerate brownfield sites back in the 1980s and 1990s. I want to look at the issue, and I would ask my right hon. and hon. Friends to write to me about it.
Let me turn, finally, to a couple of the last points that were raised. My hon. Friend Justin Tomlinson was absolutely right that we are determined to ensure that we get house building numbers right, and that we should develop and build on that and reverse the problems we faced under the last, Labour Government. However, we should not ignore quality. That is an important point. Quality and design; places that people want to live in; the use of the vernacular—these are important as we think about how to ensure that we provide the appropriate homes.
To conclude, the Government are working hard to increase substantially the supply of housing from the low point of the last, Labour Government. Our housing strategy combines practical measures with an understanding that Whitehall cannot and must not try to control the housing markets. Our work in helping first-time buyers, simplifying the planning system and unlocking stalled sites is all part of our commitment to enable more homes to be built. By tackling the deficit we have built the foundation for a sustainable economy. We are now focused on getting houses built.
Question accordingly agreed to.
The Speaker declared the main Question, as amended, to be agreed to (
That this House welcomes the first Opposition Day debate on housing in this Parliament; notes that house building under the previous administration fell to its lowest peacetime level since the 1920s; further notes that house building starts in England were 29 per cent higher in 2011 compared with 2009; believes there is still more to do to get Britain building; further notes that housing is the most affordable for first-time buyers for a decade and mortgage payments are the lowest since 1997 as a direct consequence of the decisive action to tackle the deficit brought about by the previous administration; notes that the Coalition Government’s affordable housing programme will deliver 170,000 affordable homes by 2015 and leverage £19.5 billion of investment; and welcomes the steps being taken to increase house building and unlock stalled sites and the comprehensive programme to get empty homes back into productive use.’.
On a point of order, Mr Speaker. I seek your guidance and draw to your attention a matter that will be of interest and concern to all right hon. and hon. Members: the impersonation of a Member of this House. A Twitter account has been set up in the name of “Bob Russell MP”. I assure you that it is not I who have done it. Throughout today it has been filled with vile comments from someone with a sick, evil and warped mind. This must be viewed in the context of three years of dirty tricks in Colchester against me by three immature young men who are all members of the same party. It has involved a spoof YouTube video of me, a snooper photograph and letters to newspapers with false names and addresses. Can you provide guidance on what can be done in a case of impersonation of a Member of this House?
It is clearly unacceptable that the hon. Gentleman has been subject to this form of harassment. However, it is not a matter of order for the Chair. I understand that the companies that host such accounts usually respond promptly to any example of “MP” being used illegitimately. For tonight, I shall leave it there.