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Finance (No. 3) Bill

Part of the debate – in the House of Commons at 6:48 pm on 12th November 2018.

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Photo of Emma Dent Coad Emma Dent Coad Labour, Kensington 6:48 pm, 12th November 2018

I am glad to see that those on the Government Benches have stopped making fun of our SNP colleagues’ accents. Of course, as a Londoner, I do not have an accent, do I?

I will address finance for housing in London, where many of the problems we experience are common across the nation, and I will begin by giving a little history. In 1966, leading modern movement architect Richard Seifert completed his iconic Centre Point commercial building on Tottenham Court Road. There were no takers for office space at the asking rate, and Harry Hyams, the developer, refused to lower it. This is an important historical point and it was very much debated at the time. It was empty until 1975—the developer got it wrong.

In an area near Soho where homeless people gather, it was inevitable that the building would be occupied for a period. The charity Centrepoint—ironically, named after the building—was set up in a nearby church to tackle the problem of street homeless young people. Recently, a huge redevelopment of this building has been completed, with a change of use to residential.

Centre Point Residences is prime residential property next to a Crossrail station. The conversion is magnificent—if you like that kind of thing. However, it was reported two weeks ago that the developer had been unable to sell half the flats at the price he wanted, so he has taken them off the market completely, saying that he had already covered construction costs and leased the retail spaces at ground level—there was “no point” trying to sell. He got his timing wrong. Half the flats will remain empty long term, and there is no incentive to sell or rent them out.

This is the ultimate irony: homeless people line the streets in their hundreds—many, as we know, are servicemen—and they are ever more visible and desperate as winter approaches. Meanwhile, there are a recorded 20,000 empty homes in dark buildings across the capital, and 15,000 high-end properties on the market, and that does not count those taken off the market. Centre Point Residences is a monument to developer greed, and its empty homes distort the market further. It is obscene.

Meanwhile, the chief executive of Persimmon has been able to make a hasty retreat from his job to save the company embarrassment, with a £75 million bonus. Persimmon—which has a very mixed reputation, to put it politely—benefits hugely from Government grants via Help to Buy—another alarming example of the trickle-up economy.

What has the Chancellor done to address these issues in the Budget? He has given a few small inducements for new shared-ownership buyers, including no stamp duty; an extension of Help to Buy; further inducements to convert retail to residential; removal of the borrowing cap for council building programmes; and funding for housing associations. Most of, if not all, those schemes have problems: some inflate housing prices, and a majority still rely upon developers for delivery. The housing revenue account housing cap will apply only to council housing not already transferred to housing associations. That is about half.

In Kensington, in London and in other areas where property is expensive, the delivery of social rented housing still relies upon selling private high-value property, but this market has failed spectacularly. If we leave the provision of housing to the vagaries of the market, with no inducements to ensure people will ever live in the homes built, we will never house our homeless. If we leave disposal of new homes to the conscience of developers, we will never house our homeless.

Let us look briefly at the tax breaks that encourage people into private home ownership, for better or worse, all at the taxpayer’s expense. Council tax, based on 1991 values, is effectively a subsidy to landlords. Capital gains tax relief costs the country about £6 billion a year. The lack of property tax costs, apparently, £11 billion a year. The right-to-buy subsidy costs £2 billion a year. We also have shared-ownership subsidy, tax relief for buy to let, and Help to Buy, which pushes prices up, and indeed even subsidises second homes for those earning six-figure sums.

We need a thorough and honest review and a frank discussion about these subsidies—who in reality they are helping—and whether there are better ways to spend taxpayers’ money to provide stable homes for our families, not embarrassing pay-outs to chief executives.

We need a thorough review and a frank discussion of the role and practice of housing associations, now self-styled “developers with social purpose”, and their management of existing and new buildings. We need to get a grip on construction companies offering apprenticeships, for which many quite simply do not have the capacity, let alone the will. A billion pounds in apprenticeship levy lies unspent. We cannot build without builders. We need a nationwide needs assessment to inform our house building. Evidence is a better guide to housing need than developer greed.

On matters of concern in relation to work being carried out, or not, post Grenfell, the Chancellor’s Budget speech mentioned tax 34 times and housing 10 times, but there was not a single mention of Grenfell—not one. Now, residents are very anxious about the possible effects of toxic soil, after a report in The Guardian some weeks ago.