Ministry of Housing, Communities and Local Government

Part of Department for Work and Pensions – in the House of Commons at 6:10 pm on 2nd July 2019.

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Photo of Matt Western Matt Western Labour, Warwick and Leamington 6:10 pm, 2nd July 2019

It is a pleasure to follow Jack Brereton. I appreciate some of the points that he made, particularly on social housing and on how Stoke is taking on the same challenges that face so many of us.

I thank Layla Moran, who is currently not in her place, for securing such an important debate. I am obviously delighted to support her as I, too, put in to speak in the debate.

Clearly, local government faces huge challenges. As my hon. Friend Mr Betts said, the cuts faced by MHCLG have been far greater than those faced by any other Department. It is our local authorities that have borne the brunt of austerity as, of course, have our communities with the cuts to so many of their services—whether it be the hostels provided for those coming out of prison or the Army or those who are victims of domestic abuse. Certainly, we have seen significant cuts in Warwickshire. We have seen cuts to children’s services; closure of children’s centres; cuts to waste and recycling; cuts to fire and rescue services; cuts to our libraries—and the list goes on.

I want to concentrate the rest of my remarks on social housing. As chair of the Parliamentary Campaign for Council Housing, I have been pressing for more social rented housing since I arrived in Parliament. It is well understood that we are facing a housing emergency: 277,000 people are homeless; 1.1 million households are on waiting lists; and young families spend three times more on housing costs than they did 50 years ago. Just 6,000 social rented homes were built last year. Warwick District Council, which more or less overlaps my constituency, has built just eight social rented properties in the past four years, despite the fact that 2,000 people were on the waiting list.

I have been making my case ever since I arrived in this place, and I regard housing as the No. 1 priority for all of us in this House. We must fix this housing crisis. Shelter reports that 3.1 million homes need to be built in the next 20 years to meet the demand of those at the sharp end of housing need, particularly the younger trapped renters and the older renters, too. Back in the 1950s, in response to Churchill’s challenge, Macmillan, as Housing Minister, built 200,000 council homes. Meeting the housing need will happen only with significant investment in social rented council housing.

It is social housing that is desperately needed. Since 1980, house building in this country has been distorted by various policies, which have resulted in an average of just 25,000 social homes being built a year, compared with 125,000 during the post-war period. That is a loss of 100,000 units per year—4 million in total. The question that I want to put to the Minister is simple: how best can we use that £8.5 billion allocated to housing and planning? That is a significant sum and accounts for 80% of the total MHCLG budget.

This year, the Ministry of Housing, Communities and Local Government estimates that it will spend £3.9 billion on affordable homes—although that is often a misnomer. As well as home ownership options such as part-buy, there will also be social rented housing. To put this into context, back in 1953, in one year alone, the then Conservative Government invested £11.35 billion at today’s prices. Clearly, we are not doing enough. From speaking to Members across the House, I have learned that there is widespread support for increasing the budget. Where we differ is the proportion that should be spent on social housing, and there is real clear blue water between us on how that should be funded.

This call for a massive increase in social rented housing is echoed by Shelter. In its report produced by the Social Housing Commission, it concluded that there was a need for 3.1 million homes over a 20-year period, equating to 155,000 homes a year, of which I believe 100,000 at least should be council houses. I proposed that to the House on 13 June, and it was supported. This number is not pie in the sky; it was supported by my right hon. Friend Edward Miliband and, indeed, by Baroness Warsi. The only way councils will hit these kinds of numbers is through grant funding direct to councils, ring-fenced for building social rented housing. London Economics estimates that £10.7 billion is needed per year—less in real terms than the figure that was being spent in 1953.

It would be easy to think that the lifting of the local authority borrowing cap will be sufficient to provide the funding needed, but it will not. Don’t get me wrong—the lifting of the cap is very welcome, although long overdue. However, it is estimated to result in only £3.4 billion of investment in building council homes over the next four years. What is fundamentally wrong with the provision of housing is that too much money is being spent on the wrong schemes. The Help to Buy scheme falls within the remit of MHCLG. In my view, this scheme is totally the wrong priority and is simply being used to maintain inflated house prices and the bloated profits of house builders and developers.

This year, the Help to Buy scheme will once more account for the largest share of housing spend at £4.1 billion. The National Audit Office reports that two thirds of this—£2.7 billion—is in effect being used to subsidise homebuyers who could have bought a home without it, and one in 25 of those homebuyers had household incomes of over £100,000. Surely it would be better to use the £4.1 billion to build 40,000 social rented homes instead. Beyond MHCLG, there is of course the massive £21 billion being used on housing benefit annually. Again, surely this budget would be better utilised building social rented housing and realising those assets, rather than fuelling the private rental sector at the taxpayers’ expense.