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Housing: Five-Year Plan

– in the House of Lords at 6:45 pm on 24th January 2005.

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Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development) 6:45 pm, 24th January 2005

My Lords, with permission, I will repeat a Statement made earlier today in the other place by my right honourable friend the Deputy Prime Minister on the publication of the Sustainable Communities: Homes for All document. The Statement is as follows:

"As the House is aware, the Government have been drawing up a series of five-year plans as we continue to modernise our country. Today, I am presenting the Government's new five-year strategy, Sustainable Communities: Homes for All.

"We will provide more homes to buy or rent through responsible growth; continue to improve the social housing stock; promote greater home ownership; and give more people a share in their home. Homes for All offers choice, opportunity and fairness. It is a comprehensive strategy to deal with the housing challenges which we face in this country.

"For decades, Britain has faced major long-term problems in housing. We inherited a boom-and-bust economy, with 15 per cent interest rates and hundreds of thousands of people suffering the misery of negative equity; a £19 billion backlog of repairs to social housing; and a record number of rough sleepers and families in bed-and-breakfast accommodation. And, for decades, the number of households had increased, while the supply of new housing had fallen. This widened the wealth gap and priced millions of people out of home ownership.

"Successive governments had failed to deal with these long-term challenges. Our priorities in the first five years were to deliver economic stability; tackle the backlog in housing repairs; and remove the obstacles to increasing housing supply.

"I am proud of what we have achieved. There are more than a million fewer non-decent homes than in 1997. Rough sleeping is down by two thirds, and we have virtually ended the use of bed-and-breakfast hotels for homeless families with children. In the private rented sector, we have improved investment and quality and tackled the problem of bad landlords.

"Labour economic stability has replaced Tory boom and bust with low interest rates, low unemployment and low inflation. It was only by making progress on these issues that we have been able in our second term to take action to increase housing supply and give more people choice and opportunity in housing.

"The number of households has been increasing faster than growth in population, while the supply of new housing has been falling. The number of single-person households has more than doubled from over 3 million in 1971 to about 6.5 million today.

"Ten years ago, house prices were 3.5 times people's annual salary. Now, they are six times the annual salary. Sons and daughters cannot afford to live where they were brought up. Nurses and teachers cannot afford to buy homes near where they work. As house prices rise, more people are priced out of the market.

"This is not just a housing problem—it is a matter of fairness, opportunity and social justice. That is why I announced the £38 billion Sustainable Communities Plan to the House two years ago. That plan provided for 200,000 extra homes in London and the wider south-east, increasing the total to 1.1 million in the wider south-east by 2016.

"Kate Barker's review of housing supply supported that decision. It said that undersupply of housing was threatening economic stability and people's quality of life. The review also said that we needed a step change in housing supply, meaning an extra 70,000 to 120,000 new homes a year. The Barker review concluded that many people on moderate incomes in high-demand areas were unable to buy a home.

"The case for sustainable growth is clear and unambiguous. The Sustainable Communities Plan and this five-year strategy will achieve growth in a fair and responsible way.

"Responsible growth means concentrating more housing in our four growth areas in the wider south-east; modernising the planning system to make more land available for housing; encouraging environmentally sustainable homes; using brownfield land; and protecting the green belt.

"Responsible growth also means providing infrastructure because we are creating communities, not just housing estates. We are investing extra resources in schools and hospitals and over £3 billion of new transport investment in the growth areas.

"The growth areas—the Thames Gateway, Milton Keynes and the south Midlands, Ashford and the Stansted/Cambridge/London corridor—are about creating sustainable communities with more affordable housing. Today, I am announcing £40 million for sustainable communities in other areas to support extra housing growth and promote regeneration.

"Today, I am also announcing important changes to our planning policies. We are extending our stricter controls on density to cover more areas of high demand in the east of England and the south-west. Development on brownfield land has already been increased from 56 per cent in 1997 to 67 per cent in 2003. Today, we are further encouraging the use of brownfield land. Our new planning guidance will help local authorities release unwanted industrial land to be used for housing or other purposes. We are using less land to provide the homes that people need. We are already doing this in London and the south-east, where we are planning to provide for 1.1 million new homes on less land than the last government set aside for 900,000 homes in 1997.

"We have already added 19,000 hectares to the green belt, an area the size of Liverpool. Now I am proposing a new green belt direction which will further strengthen the protection of the green belt, so that local authorities will have to seek my endorsement for development. We also want more affordable homes in rural areas. For the first time, we will allow local authorities to ring-fence land so that it can be used for rural affordable housing to meet local needs.

"Today, I am also announcing a review of the way existing homeowners apply for planning permission for home improvements. The number of such applications has doubled in 10 years to over 300,000 and this has put additional strain on the planning system. I believe that we can reduce red tape and make the planning system more effective while still safeguarding the rights of neighbours and protecting the environment.

"In parts of the north and the Midlands long-term industrial decline and people's changing aspirations have led to low demand for housing: 850,000 properties are affected and it has devastated the value of people's homes and undermined communities. We are investing £1.2 billion on nine market renewal pathfinders to help lift housing markets in many of the worst-affected areas. That investment could also attract billions of pounds of private investment. Today, I am making £65 million available to new areas, such as the Tees valley, west Cumbria and west Yorkshire, to tackle their problems of low demand.

"This plan offers more fairness, opportunity and choice to our 4 million social housing tenants. We are providing more affordable homes, more decent homes, more choice over where they want to live, more help with jobs and housing and more opportunities for home ownership.

"Following the recent spending review, we will provide 75,000 new social rented homes over the next three years. By 2008, we will have doubled our annual investment in new affordable housing to £2 billion compared to 1997. This is in addition to the £18 billion that we will have invested in the improvement of our existing social homes since 1997 to correct the disinvestment of the previous administration. That will benefit over a million people, many with new kitchens, bathrooms and central heating. I realise that these are not new houses, but for the people that live in them they are new homes.

"We also aim to halve the numbers of households in temporary accommodation within five years. We are on track to meet our commitment to bring every social home up to a decent standard by 2010. We are making £500 million of new private finance initiative credits available to allow local authorities to work with housing associations and the private sector to build new affordable homes.

"We are offering social tenants more choice to rent or buy and we have already considerably improved tenant participation. We are offering them more information and more involvement in the decisions which affect their homes.

"Local authorities such as Newham and Sheffield have been running choice-based lettings schemes, which have been very popular with tenants. I now want to work with all local authorities to expand choice-based lettings so that we can create a national system by 2010. I want this system to include housing associations and private rented homes.

"It would give information not just about renting but also the cost of buying a share in a home, and it would give more people a chance of finding a decent home with employment.

"We are establishing a new scheme called "MoveUK", which will help tenants find a new job as well as a home. MoveUK will extend our existing location schemes to help tenants find a new home and a better quality of life in another area.

"We are offering social tenants more choice and more opportunity. Our plan means that local authorities will continue their excellent work delivering the decent homes programme, continue to invest in new social housing, offer more choice and manage housing better and use their land for low-cost homes. We also know that many social tenants want to own a share of their own home.

"Since 1970, home ownership has increased from 50 per cent to 70 per cent and it has continued to grow in every region. Average interest rates are half what they were under the previous government. Cheaper and more stable mortgages have enabled over 1 million more people to buy their home under this Government.

"But there are still many people who want the opportunity to own a home. By offering more people the chance to own or buy a share in their home, we will widen opportunity and narrow the wealth gap between those with housing assets and those without.

"The House will be aware that 80 per cent of social tenants already have the right to buy their home. The right to buy and the right to acquire will continue to be available. They have helped boost home ownership, but have meant the loss of 1.8 million homes from the public sector and have come at a cost of £40 billion in discounts.

"In 41 areas of housing crisis, I have capped the level of discount. But elsewhere the right to buy still gives a discount of up to £38,000 for each home and the right to acquire gives a discount of up to £16,000. On average it costs us £75,000 in grant to replace each home that is sold.

"I asked Baroness Dean to chair a task force which made recommendations about how to promote sustainable home ownership while protecting the social housing stock. I am grateful for the valuable work and useful recommendations.

"Today, our new five-year plan offers a comprehensive package of schemes to help social tenants and first-time buyers to become home-owners. We have two different approaches; namely, HomeBuy, which will offer up to 300,000 council and housing association tenants the opportunity to buy an equity share in their home at a discount; and the first-time-buyer initiative, which, together with our key worker and other low-cost home ownership programmes, will help 80,000 families into a home of their own by 2010.

"HomeBuy is significantly different for several reasons. It will protect the social housing stock because social landlords will have first refusal to buy the home back if the owner decides to move to the private sector. It will help more people—up to 300,000 tenants—and it will be more cost-effective. We will consult on a range of options for discounts up to the level of the right to acquire.

"Tenants will be able to buy as little as half of their home, increasing their share over time if they want to. This will particularly help tenants who are unable to afford the right to buy or who do not have the right to buy. And—unlike right to buy—it will treat local authorities and housing associations equally, allowing both to retain the full receipts from the sale of homes, therefore creating a level playing field.

"Today's housing plan will widen the opportunity to own or part own. In addition to our HomeBuy scheme, I am announcing a radical new first-time buyers initiative. Our key worker programme has already helped over 13,000 key workers, such as nurses and teachers, who have been previously priced out of the housing market.

"This new first-time buyers scheme will help even more key workers and people on low incomes who cannot afford to buy a home. When they are ready to move on, the social landlord will have first refusal to buy it back, so that the house can be offered to another first-time buyer.

"The scheme will use surplus public land for new homes. The first-time buyer will pay a price that reflects the cost of construction. The public sector landowner will keep a share that reflects the value of the land. In due course, the first-time buyer will be able to increase his share—up to full ownership if he wants it.

"To begin with, the first-time-buyer initiative will use land owned by the Government and their agencies. But I want to encourage other public and private sector landowners—in urban and rural areas—to use their land for new, affordable housing.

"We are encouraged by our talks with the Council of Mortgage Lenders about ways in which the private sector can support and extend the first-time-buyer initiative.

"Separating the cost of land and the cost of construction in the first-time buyer initiative will be a big help in driving down purchase prices for the home buyer, but we still need to reduce construction costs, which over recent years have gone up more than three times faster than retail price inflation, and certainly higher than those in Europe.

"I have said that I believe you can build a home for £60,000, and it is now clear that you can. So I am asking English Partnerships to hold a competition challenging contractors and house builders to produce a well designed, environmentally efficient home for £60,000 without sacrificing safety or quality. Next week, at the Sustainable Communities summit in Manchester, English Partnerships will exhibit a house that shows you can deliver high standards at low cost.

"This five-year plan is the next step in creating sustainable communities: mixed use and mixed tenures designed to the highest standards; using less land to build more homes; and helping thousands of key workers and first-time buyers to get a home of their own. It means more homes and more home ownership with extra help for first-time buyers. The five-year plan offers choice for all, fairness for all, opportunity for all, and homes for all in sustainable communities. I commend it to the House".

My Lords, that concludes the Statement.

Photo of Baroness Hanham Baroness Hanham Shadow Minister, Local and Devolved Government Affairs, Deputy Chief Whip, Whips

My Lords, first I thank the Minister for repeating this rather euphoric Statement made in the other place earlier this afternoon, and for sending me a copy in advance of the Deputy Prime Minister's comments.

I am afraid to say that I still think that today's Statement contains a series of previous announcements and some half-baked compromises that will do little to address the deep flaws and underlying problems that still afflict the country's housing market, many of which are the result of this Government's own policies. Given the time constraints and the length of the euphoric Statement, I intend not to comment on every element but to stick to one or two particular areas.

Despite what the Minister has said, under this Government homelessness has continued to increase. The number of individuals and families living in some form of temporary accommodation, whether within local authorities' own stock or not, is still far from being reduced. And, as the Minister has said, the chance of a young couple being able to afford their own home is a complete pipedream. Indeed, only on Saturday Halifax Estate Agents, the country's biggest estate agency, published information showing that first-time buyers on average salaries simply cannot afford to buy a home in 92 per cent of towns across the country. I see the Minister nodding in assent, and I think we must all agree with that finding.

But the position has not been helped by the Government. Over the course of time they have increased council tax by 70 per cent and imposed an additional increase of £1,200 in stamp duty for first-time owners. Along with the abolition of mortgage tax relief, these measures have combined to make home ownership a near impossibility for hundreds of thousands of people each year. No wonder the Prime Minister said earlier today:

"If you are a young couple struggling to make ends meet and get your feet on the housing ladder, it's very difficult".

Indeed it is, and it is also worth asking the Minister whether he is aware of the current slowdown in the housing market and what that brings with it; namely, the possibility of negative equity. If young people cannot get on to the housing ladder, those young people who bought flats and houses a little while ago will not be able to sell them because the value of their property is more than likely to be less than what they paid for it. Sadly, the proposals announced today will do nothing to change that situation.

The ability of housing association tenants to have a stake in their property, limiting the purchase to only 50 per cent of the value of their home, is another half-hearted policy. Indeed, so far as I can see, it is a rerun of equity sharing given that it has all the ingredients of that system, which has been around for as long as I can remember. As a policy, it has had varying degrees of attraction, although equity sharing as such has not always been a policy that has taken off well. Can the Minister confirm whether he believes that the new scheme falls within the terms of the right to buy? If it does not, is it equity sharing by any other name?

Does he not also agree that housing association tenants will not have the same right to buy as council tenants? Labour's proposals announced today for a "social home-buy" scheme will not allow people to buy their own home outright. Will housing association tenants still be told to whom they can and cannot sell their share of the property? The Statement indicates that they will have to offer first refusal to the local authority. Presumably the only reason a local authority will not buy back a property will be because it has no capital to do so. Can the Minister tell us where the capital is going to come from for such properties to be bought back?

Is it also the case that anyone who purchases such properties will have to ask permission to make any home improvements? If they do, this is simply not a question of home ownership. On reflection, therefore, this is a very half-cooked egg. Is there not also a danger that a market within a market will be created as the value of such units of accommodation will be artificially depressed, creating a cycle from which it will be difficult to escape? As a result of today's Statement, not one single housing association tenant will be able to own their current home.

The Conservative Party would help social housing tenants to purchase the homes of their choice, not only their present house, by extending the availability of transferable discounts and giving them a right to own. The new government will use the receipts from right-to-buy sales to fund these discounts. Transferable discounts will also free up existing social housing that can be let to those most in need. The proceeds of new right to buy will be available to be reinvested in new social housing.

That is the line which should be adopted and, having announced it as we have, I daresay that the Government will scoop it up, just as they have so many other of the excellent Conservative policies that have been put forward recently. The Government have decided to absorb them into their own policy system. I offer this policy on the clear understanding that it will be one that the Minister will not want to adopt.

The other main plank of today's announcement is the provision of cheap houses for key workers that will lead to tens of thousands of starter homes on government-owned land for as little as £60,000. I should like, first, to ask the Minister where such land will be found. Secondly, even with the enormous help of English Partnerships, where do the Government believe that a house of any substance and style could be provided for £60,000, particularly in the south-east of England?

So far, the Government's sole answer to the housing crisis has been to concrete over more and more green fields in the vain hope that eventually supply will match demand and bring house prices down. We now learn that the Government wish to see a "step change"—meaning a big increase—in the total output of new homes, as recommended by Kate Barker in her review last year. But it is clear that we simply cannot build our way out of our housing problems. Big increases in the provision of market housing, even if they were ever achievable, would do nothing to reduce house prices and would be likely to cause serious environmental damage. The Minister will know also that there are still grave concerns about the new areas which have been put forward for development.

The Government have to become more ambitious about making better use of previously developed brownfield land. Is it correct that the Government's target of 60 per cent of all new homes to come from conversions or building on brownfield sites was reached within eight years and that since then the level has risen to only 66 per cent? There has been only a very small increase over the past few years.

I hope that the Minister will also comment on a question that I have put to him in the hope, ultimately, of receiving a written response. Is not much brownfield land likely to be classified as "landfill" under new European regulations? If that happens, the land will be deemed to be contaminated and will not be available or able to sustain housing. I am sure the Minister will have heard of the new directive. Perhaps he will comment on it orally today as well as sending me a written reply.

The Government are obviously still determined to steamroll ahead with their plans to impose massive housing targets on the countryside, despite the fact that there are considerable concerns about sustainability and the sustainable communities policy. Perhaps the Minister will comment on the reaction of local authorities in the areas that are likely to be affected as well as that of the local people.

It is clear that there have been some grave disagreements within the Government about policy issues and what the objectives should be. The Minister has announced several new tranches of money. Can he say whether they are indeed new tranches or whether they have been subsumed already into the Red Book calculations. That would of course include the £30 billion that has been put forward.

I should comment again on the Government's attitude towards right to buy because it is informative. When they were in opposition they refused to accept that right to buy was a policy of any value whatever. Indeed, they campaigned strongly against it. When they came into government, they marginally accepted that there might be a possibility that right to buy would work, but they were not very enthusiastic about it. They then capped the discounts so that it was impossible for people in higher cost areas to undertake right to buy. Perhaps the Minister will clarify exactly what is now the Government's view of right to buy and whether they will ensure that discounts are at a level that will enable people in reality to undertake right to buy.

Finally, the Minister alluded to changes in planning law for home improvements. We discussed this during the process of the Planning and Compulsory Purchase Bill not so long ago. I recall coming to the conclusion that small improvements were nearly as likely to have a detrimental effect on neighbours as large ones. Can the Minister enlighten us on the proposed planning changes in order that we might consider them further?

All in all, this is a quite disappointing Statement. Nevertheless, I thank the Minister for bringing it to the House.

Photo of Baroness Scott of Needham Market Baroness Scott of Needham Market Shadow Minister, Transport

My Lords, I thank the Minister for repeating the Statement, with its bewildering level of statistics and initiatives. If there was any doubt as to the proximity of an election, it becomes less all the time.

The Government have been very up front about the fact that the number of households has been rising faster than the supply of new housing, but it is wrong to assume that simply building more houses will deal with the problem. It is not only a question of there being too few houses but that too many of them are in the wrong place, at the wrong price and in the wrong condition. This is because many years of poorly implemented and thought out regional strategies have resulted in the kind of imbalances that we currently see and the overheating of the economy in London and the south east.

Given that house prices have risen, as we have heard, from 3.5 per cent of an annual salary to six times that over the past 10 years, have the Government any evidence to suggest that building large numbers of houses in London and the south east will have any real effect in dampening down the cost—and certainly enough to create access for first-time buyers who are increasingly struggling to get into the housing market? This problem will get worse with an emerging generation of people trying to start off in the housing market with huge debts accumulated from university.

Since the late 1950s, between 150,000 and 200,000 new houses have been built each year for sale. Last year, however, only 21,000 social housing units were built. That is against a backdrop of a loss of 1.7 million council houses which were sold and 100,000 housing association properties. It is the shortfall in this sector which requires urgent action, a fact which has been brought to the attention of the Government by the Rowntree Foundation and the CPRE among others. It is against that backdrop that the announcement today of 75,000 houses over the next three years does not represent enough of an increase to make a difference.

It is, however, a significant improvement on the proposals from the Conservative Benches, which would not only see the level of funding available for housing cut—as we saw in their spending proposals last week—but their policy of bringing in the unfettered right to buy for housing association tenants would deplete the stock of social housing down to almost zero.

The report makes much of the fact that something like 90 per cent of people say they would like to buy their own homes, but I caution the Government to be careful about how they interpret that figure. Many of those people are not necessarily expressing a wish or aspiration for the joys of home ownership; rather it is a reflection of the alternatives available to them. Social housing is very difficult to get into and the private sector is expensive, insecure and often affords very poor conditions.

The reason I say that is because moving from the current level of 70 per cent homeowners to, say, 90 per cent—if that is the figure at which the Government are looking—could only be achieved at a significant cost to the public purse through subsidies and discounts. That may or may not be right, but I would ask the Government at least to consider whether the cost of moving the level of home ownership up from 70 per cent would not be money better spent on providing rented accommodation in the social sector in the first place.

Unlike the noble Baroness, Lady Hanham, we on these Benches welcome the fact that the Government have pulled back from bringing in the right to buy for housing association tenants. In fact, we have serious doubts about whether it would be legal to extend the right to buy to housing associations if they were to be forced by government. Given their charitable status and the role of private financial institutions in their funding, we are not convinced that it would be legal for a government to do that. There is also the question of undermining the confidence of private and charitable investors in housing associations if they believe that their assets are going to be sold on.

I note from the accompanying document which was published today that the Government's home buy proposals will allow housing associations voluntarily to agree to the right to buy. I want to put on record at this stage that we would like that choice to be real and truly voluntary. We shall be looking out for ways in which the Government might actually force the hands of housing associations in this.

Can the Minister say a little more about the green belt direction and explain why the Government believe that the green belt is safer in Mr Prescott's hands than it is with local authorities?

I also note that there is a chapter in the document which refers to cutting red tape on renovations. It is a pity that the Government have not dealt with the real issue—that is, the cost of renovating and restoring old properties, of which there are many in parts of the country. At the moment, the 17.5 per cent VAT on renovating existing properties is a nonsense.

Finally, the report is very bullish on the question of infrastructure but my region, the east of England, has told the Government that it cannot sustain the levels of housing numbers required unless there is more investment in transport infrastructure. Perhaps the Government will concentrate on that.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, I shall do my best to answer the points raised. Those points that I cannot answer today I shall be happy to cover through correspondence.

I apologise for all the statistics and the rate at which I read the Statement. I was watching the clock and thought that it would take a long time if I used my normal drawl. I probably read it a little too quickly.

I agree with some of the points; others I take exception to. As shown by the recent figures to which the noble Baroness, Lady Hanham, referred, homelessness has increased if one measures it by those living in temporary accommodation. However, in the past five quarters the numbers have gone down. What has not gone down is the number of people leaving temporary accommodation to secure settled tenancies. There is a block on the conveyor belt, which we need to address. That is why we are quite confident of making the commitment in the document to halve the numbers in temporary accommodation by 2010. We have already tackled the flow into homelessness through our other strategies, which I shall not detail here. For the past five quarters, the numbers going in have gone down, but people have got stuck in temporary accommodation.

Some of the noble Baroness's points are quite right. I cannot say anything about stamp duty; it is a matter for the Chancellor, and is not covered in today's document. I think that there was a general consensus about the abolition of mortgage tax relief which, as far as I understood, took place under the previous administration. I do not depart from that, because there was a general consensus, so it is not really relevant to raise it now.

There is no sign of the return of hundreds of thousands of people being trapped in negative equity. That is always a danger if the market fails, but there is no sign that this is happening.

Both noble Baronesses referred to housing association tenants. This is a voluntary scheme—it is not the right to buy. It will be for the housing associations to make the decision, charitable or not, if they are not already involved in the right to acquire. Most of the charitable ones are not, because the legislation did not pass this House in 1984 or 1985, I understand. These arrangements are not hard and fast; a consultation paper will be issued before Easter. We want to consult on the way in which the discounts are financed and recycled for the provision of social housing. We think that we can make this a genuinely voluntary scheme, which will be embraced by the housing association movement in providing social rented housing. Several good and positive comments have been made today.

I take very much what the noble Baroness, Lady Scott, said. There is a fantastic amount of ignorance and it spreads around Whitehall. There is some £24 billion of private sector investment in the housing association movement. Speaking off the cuff, giving knee-jerk reactions or considering policies that have not properly taken that into account could be highly damaging to private-sector investment in the housing association movement. Anyone who wanted to propose a policy of wholesale selling without taking account of that is on very dangerous ground when it comes to the financial markets and homes for our fellow citizens. We have taken that on board in respect of the way in which the policy has been enunciated, so we do not envisage any difficulties. If there is a good policy floating around, like other political parties, we will want to steal it. I do not say that with reference to any particular policy; all policies should be considered by mature adults in a democracy, and if they are good they should be adopted.

I realise that there is some difficulty in grasping the idea of building a new home for £60,000. When this was announced at the Labour Party conference by the Deputy Prime Minister, there were gasps. However, one can visit the Delivering Sustainable Communities Summit in Manchester next week—at a fee, but I understand that offers were made to Opposition parties for a discount—and see such a dwelling constructed inside the GMEX centre. A competition for house builders to do this will be announced. We want to drive down the costs of construction without jeopardising environmental standards, quality or safety. We are fairly confident that that can be done.

I realise that the noble Baroness, Lady Hanham, was being tongue in cheek, but we are the first government ever to have a target for new homes to be built on brownfield sites—second-hand land. We do not want to waste land. We are an island nation, and it is in short supply.

When we came into power, the number of homes built on brownfield sites, including conversions, was 56 per cent. There was no previous government target for this. We set a target of 60 per cent. We reached that target seven or eight years ahead of time; it is now 67 per cent, and growing. We do not want to increase the target; we want to keep the pressure on. The noble Baroness said that we cannot build ourselves out of housing policies, which leads me to believe that there is not much support for the step change in production. We know that it will be more difficult to keep meeting that target with a step change in housing production. It makes no sense to start jacking up the target. We think that building 67 per cent—two thirds—of all new houses on second-hand land is good, and we also think that we can do better.

Secondly, in 1997, the density of building in England—these are all English figures—was 25 dwellings per hectare. In 2003, it was 33 dwellings per hectare. That is quite a substantial increase. It is sufficient for us to be able to claim that the extra 200,000 homes under the communities plan over those which were already planned in the wider south-east—930,000 were already planned to be built by 2016—can be built on less land than was planned for the original 930,000, and the saving of land would be the size of Oxford. So we can build 200,000 extra houses, save land the size of Oxford, and have 1.1 million houses by using more brownfield sites and higher densities.

We are increasing the geographical spread of the density directive which currently applies only to the south-east and to London. We are including the east of England region, the south-west and the county of Northampton, so that all parts of the four growth areas are included in the density directive.

The new money announced today—although there were not many actual figures—flows from the spending review announced by the Chancellor in the summer. The figures have not been used before, and there is a lot more to come. We are working on the spending plans for 2006-07 and 2007-08. Announcements will be made this year, flowing from the Chancellor's announcement at the spending review in July. There are literally hundreds of millions of pounds to be disbursed, whether the money goes on neighbourhood renewal, the growth areas or the Thames Gateway. That money has not yet been announced; we are still working on it. The figures announced today are part of that money, so it is the first time they have been announced.

We are committed to the right to buy. For reasons of historical accuracy, the Labour Party abandoned its opposition to the right to buy in 1985. The noble Baroness, Lady Hanham, shakes her head, but I was the shadow Minister responsible and I proposed the document at the Labour Party conference in Bournemouth that year, which was approved. The fact that we went to the 1987 election and people still thought we were opposed was a complete and abject failure of communication by the Labour Party. Well, we have learnt our lesson since then. However, it is on record that our opposition was abandoned in 1985.

The householders development consent review is a hell of a mouthful. I could not find it in my notes because I looked under "planning reform". This will be a root-and-branch review of the regulations facing householders wanting to improve their homes. We will be looking for ways in which to streamline application processes and minimise bureaucracy while, of course, protecting neighbours' rights and the local environment. We will be examining the case for introducing new ideas such as involving neighbours at an earlier stage in the planning process so that we can resolve disagreements by mediation.

The review expects to report in the second half of 2005, following which its proposals would then be subject to full consultation. Several items announced today require further processes, secondary legislation or proper consultation. It will not be done on the hoof—it is a five-year plan, after all. There is a degree of strategy involved rather that just tactics.

The green belt direction will enable the Secretary of State to review proposals for inappropriate development in the green belt. It is basically an additional protection. I reject the noble Baroness's cheap jibe. The Deputy Prime Minister has provided more than 19,000 extra hectares of green belt land. It is statutorily protected. Before anybody says it, I accept that a lot of it is in Northumberland, but that is not the issue. The issue is that it is statutory green belt. There are 12,000 more hectares in the pipeline currently coming through the local authority process, so there will be up to 31,000 more hectares of green belt protection in this country than there were when this Government came to power in 1997. By the way, before it is introduced, the direction will be subject to consultation so there will be plenty of opportunities for comment.

One final point relates to moving forward on people's aspirations for home ownership to be greater than 70 per cent. We are not saying that we must get to 90 per cent. There may be an aspiration for that out there, but the noble Baroness is quite right. The issue must be carefully balanced. We are trying to balance it with a series of packages to improve social housing. It would not make sense simply to promote a large programme of social housing under the existing set of rules. With all the cost flaws we would still lose some stock with the crude application of the blunderbuss of right-to-buy. It does not make sense. We would lose housing stock for future generations. We are seeking to bring changes and possible nuances to the schemes that protect the stock for social renting or the stock for first-time buyers for future generations, so people can cascade out and staircase up—to use the jargon—into the private sector.

The Statement is wonderful and excellent in terms of housing policy and I can tell the House that there is a lot more to come next week, when the five-year plan partner document for the rest of the ODPM's activities will be published, as will about 13 daughter documents on local governance, the quality of life in communities and other initiatives. It will be a wonderful week for announcements from the Office of the Deputy Prime Minister.

Photo of Lord Brooke of Sutton Mandeville Lord Brooke of Sutton Mandeville Conservative

My Lords, the 15 minute Statement could have been significantly shorter if the selective party-political abuse had been omitted. However, in the spirit that the Deputy Prime Minister chose and on the 40th anniversary of the death of Winston Churchill, whose 1951 government built 300,000 houses a year, which far exceeds the target that the Government have loudly announced today, why is the proportion of "non-decent homes in Wales" so much higher than in the rest of the UK, when it is now 145 years since the Conservative Party last won a general election in the Principality?

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, I cannot answer that question without notice. The Statement that I repeated today relates exclusively to England. I am an English Minister and although I speak for the Government in this place, I do not have the necessary information regarding Wales to answer the question. However, I will try to find the information and write to the noble Lord.

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Shadow Minister, Treasury

My Lords, the Minister was talking about staircasing, but the problem for first-time home buyers is that they have been desperately trying to walk up an escalator that is going the wrong way, especially in relation to stamp duty. I know that the Minister said that that was a matter for the Chancellor and ultimately it is, in the same way as is value added tax on improvements. However, we cannot talk about housing and have a serious Statement mentioning first-time buyers without at least addressing the question of stamp duty.

Is the Minister aware that when the stamp duty threshold was raised to £60,000 in 1993, the average price paid by a first-time buyer was below that threshold in every single region of the United Kingdom apart from London, even in the south east? Is the Minister aware that today, in every single region, first-time home buyers have to pay well over the £60,000 and that the amount of money that has been taken from home buyers by stamp duty has gone up from just under £700 million when the Government came to power in 1997 to £3.8 billion last year? That money is being sucked out of the pockets of homebuyers. Will the Minister, from a housing perspective—he is always very robust at fighting for the interests of his department—tell us what the effect of that is and what representations he is making to his friend the Chancellor to ease this crippling burden on first-time buyers?

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, the effect is to price first-time buyers on the margin out of buying. That is obvious: the figures that the noble Lord just gave speak for themselves. This matter is constantly discussed in the Government. We are aware of the difficulty. There has been a substantial increase in taxation—there is no question about that. The figures are all there. They are published by the Chancellor, so there is no secret, but the effect on the margin for first-time buyers is to price them out of buying when it is the last, final straw that stops the sale. The Government are discussing that issue because we are looking for all ways that we can. However, decisions on these matters are for the Chancellor.

Photo of Earl Ferrers Earl Ferrers Conservative

My Lords, the Minister's enthusiasm for the Statement was infectious and we all enjoyed it. However, could he help me with one problem that I find difficult to understand? He said that he wants a more houses on less land. Therefore, presumably, the congestion will be greater. He said that the houses will be of a better standard and neither safety nor any other standard will be compromised, yet the houses will cost less. These are all good objectives, but they militate against each other. How can we do all that and in the end the house costs less? I know that the Minister could say, "Do go up to Manchester next week without a discount", but perhaps he could explain it.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, I will try to explain without the noble Earl having to venture to Manchester. There are enormous variations in the density—the number of dwellings per hectare around the country. There are award-winning schemes with densities of dwellings per hectare in the 80s and 90s where people queue up to buy and to rent to get into quality developments—both from environmental and other points of view in terms of design. High-density need not militate against good quality design in houses. The highest density housing area in the country is around Kensington and Chelsea, so that proves that high density does not militate against quality in a good environment.

There are some poor high density areas. Currently, housing in London is being built at 71 dwellings a hectare. It was 51 dwellings a hectare in 1997, so there has been an increase. In terms of cost, we have looked at various schemes. The scheme for the £60,000 dwelling will be special because the land value is removed from the calculation. In some areas—not all—the land values are astronomical and are a real barrier. That is why in the growth areas in the country in the south east we are looking for new techniques to capture some of the land value along with developers and landowners so that, over a 20-year period, everyone feels fairly treated.

It looks as though we are squaring the circle, as I said to the noble Lord, but with a combination of different ways of financing higher densities as a matter of policy, using CABE—the Commission for Architecture and the Built Environment—to make sure that we get good quality dwellings from environmental, safety and other aspects, we are confident that we can build to reduce costs. That is the issue—construction costs in this country have been going way ahead of normal inflation, with no apparent reason for it.

Photo of Lord Marlesford Lord Marlesford Conservative

My Lords, the Minister's Statement was rather like one of my grandchildren's Christmas stockings, in that it appeared to lack a certain economic coherence, although the Minister himself moved towards economic coherence when he talked about not going to 90 per cent of people in home ownership. It would have been nice if he had made the tribute that the big increase from 50 per cent to 70 per cent, which was thoroughly desirable, was very largely due to Conservative policies. I believe that he implied that.

I ask the Minister about two points. First, does he recognise that bricks and mortar are not always necessarily a sensible investment, especially for young people? Secondly, does he recognise that a dynamic economy requires a mobile society, which must mean that there must be a healthy supply of houses to rent at all levels, including affordable housing? There is a risk of undermining that important mobility, if the affordable housing is taken out of the rented sector and put into the ownership sector.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, I can say at the outset that I do not seek to hide the fact that the increase in home ownership shot up under the "right to buy" policy, which was introduced by the government led by the noble Baroness, Lady Thatcher. That was probably the greatest single act of redistribution of wealth in this country that occurred over decades. Like most good policies, it was invented in Birmingham, where it operated at various times during the 1960s. It took quite a while for my party to come to terms with that change—I accept that—but nevertheless we have embraced it and, like converts, we have the zeal to push it even further. That is why we are looking at new ways in which to let people share the aspirations of others.

I am not sure when bricks and mortar are not a good investment—perhaps when people pay over the odds, or buy houses without checking. We have had lots of debates on that issue in this House, with regard to the need for buyers to beware of what they are buying, so there have been warnings. However, on the noble Lord's substantive point about jobs and other matters, MoveUK will seek to enable people to move around the country, for jobs and housing in the rented sector, for local authorities' social housing, housing associations and the private rented sector. That will be a big move, we hope. It will be a web-based system and will be a big incentive for labour mobility.

The noble Lord is quite right that for such a system to work you must have, if not an over-supply, then a good supply of a mixture of dwellings available in which people want to live at prices that they can afford. That is the Holy Grail that both parties have been seeking. We live in a very uneven country with regard to housing—we all understand that—and we are seeking to even up some aspects of the situation.

Photo of Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde Labour

My Lords, I welcome my noble friend's Statement, and I thank him for including in it a substantial number of the recommendations of the Home Ownership Task Force, which I chaired in 2003. That taskforce was made up of a wide range of people, including the users, funders and providers of social housing. The recommendations within the report are certainly very welcome, although it is a pity that they have to occur within a Statement. I hope that we can have a full debate on the issue. I am going to the sustainable communities conference in Manchester next week, although after the announcement of 13 daughter documents I am wondering whether I should not stay, because I might miss something.

The document is very wide-ranging. The noble Baroness, Lady Hanham, referred, I thought very good-naturedly, to the Minister's "euphoric" presentation. Quite frankly, I do not believe that we should be difficult about that, as he is entitled to be a bit euphoric. The noble Baroness, Lady Scott, remarked that there was a bewildering range of figures. She was absolutely right; but she then went on to quote quite a number of figures herself, in her presentation, if I may say so with due kindness.

To sum up the document, it is full of energy, proposals and ideas, some of which are quite ingenious. We talk about home ownership as though you either own a home or you do not. In fact, many of the people with whom we spoke said that they would simply like to have a stake in their home, which may not mean owning it fully. This policy goes a long way towards recognising that.

I have one question with regard to rural communities, as there are areas whose homing needs are quite often forgotten in the pressure cooker of the south-east. The Minister suggested that there would be discussions with Defra and that the Government have doubled the investment in rural housing. In fact, they do not do themselves justice: they have more than doubled the investment in rural housing since they came to power. But is it intended that the social housing in the countryside, in the rural areas, is ring-fence protected for the people who need it? Otherwise, young people from families in rural areas simply have to leave their homes.

In conclusion, I look forward to a full-blown debate on this important issue.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, first, I pay tribute to my noble friend, as I did in the Statement, and to her leadership of the task force. The answer to her point on ring-fencing for rural communities is, "Yes". But what I mentioned in the Statement goes beyond that by giving local authorities more powers to ring-fence for local communities and to ensure that those houses are available for the next generation, which is crucial but has been the problem in the past. We lose those houses after the first or second sale. There are issues here on which consultation is necessary, but that is our intention.

I want to make it clear, before I get a real slap on the knuckles, that I was only joking when I said that there will be 13 daughter documents. There is a partner document on the five-year plan. I think that there are three daughter documents. I said 13, but that was just my little joke. The documents will be available in Manchester. As my honourable friend walks round the £60,000 house, she will be able to read those as well. I would welcome a debate in this House on any aspect of the plan at any suitable time.

Photo of Baroness Byford Baroness Byford Shadow Minister, Environment and Transport

My Lords, I gave way to the noble Baroness, Lady Dean—it was right that she should have intervened as no one from their Benches had done so—but she slightly stole my thunder. I hope that the House will forgive me if I continue the discussion on the provision of affordable housing in rural areas.

I understand that the Statement only said:

"we will allow local authorities to ring-fence land so that it can be used for rural affordable housing to meet local needs".

Can the Minister tell us more about that?

I have two other points. First, however, I should like to raise an issue which is not a sideswipe but a real issue. Two of the issues that make it so difficult for first-time buyers are the rate of council tax, as I think we would all agree, and the rate of stamp duty. I hope that adding my voice to those of others who have spoken on that issue will give the Minister a little more weight when other discussions take place later.

I turn to my two questions. First, why have the Government chosen not to designate redundant farm buildings as brownfield sites? I know that that would make a lot of difference. It is a move for which my honourable friend John Hayes has been calling for for some time. As the Minister will know, I too regularly call for it in this House.

Secondly, why have the Government not included the use of cross-subsidy of options for a limited amount of open-market housing in order to try to get more such provision in villages? We are talking about rural villages which may require only three, four or five extra houses. Someone in our family has allowed some land to go for affordable housing and would be willing to do so again. For those who are willing to do that, it is frustrating that there is no agreement on permitting the building of a certain amount of non-affordable housing. I suspect that such agreement would help reduce land values, which, in some areas, are the major cost in building affordable housing. I wonder why the Government have not considered that at all. It seems rather a wasted opportunity. I should be very grateful if the Minister would comment.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, my comments on the first two parts of the noble Baroness's question, on council tax and stamp duty, are basically as before. However, I note that she has raised the issue and I am grateful that she has done so.

Two other documents beside the strategy have been published today, both of which are PPG3 documents, or planning policy guidance notes. As the noble Baroness said, the planning change will allow local authorities to allocate sites only for affordable housing in rural communities. However, those must be permanently dedicated to meeting the needs of local people in rural communities. The point is that there is that extra lock-in.

There does not seem to be any change on farm buildings. I know that the issue has been raised before. Business in the Community is working with landowners on a scheme. I went recently to the launch of a programme, at Eaton Hall, in Cheshire, where 200 landowners were assembled. The joys of releasing land for affordable housing, particularly in rural areas and the small settlements, and the fact that that would repay itself not only in sustainable communities but in jobs and services in those communities, was made clear to them. It was not just a question of housing. As no new policy was enunciated today on the release of land for non-affordable market housing, it was not covered in the Statement.

Photo of Lord Lucas Lord Lucas Conservative

My Lords, I share my noble friend's disappointment in that. Our villages really do need help to develop into sustainable communities. That is not just affordable housing. We need to build new employment in villages and we need to build the houses for those who will have that employment. What I also felt was missing from the Statement was initiatives on moving economic activity north. This endless pressure to build houses in the south-east comes from the economic success we are having here. We need to continue to find ways of reviving economic activity in the north and doing what we can to push it up there. I have always liked the idea of moving the House of Commons to Stoke-on-Trent. I thought last week that would have the added advantage that we could move the world dance championship to Gerrards Cross and depress house prices there.

Photo of Lord Rooker Lord Rooker Minister of State (Regeneration and Regional Development), Office of the Deputy Prime Minister, Minister (Office of the Deputy Prime Minister) (Regeneration and Regional Development)

My Lords, as I said, we are an unbalanced country, housing, economically and population wise—everyone knows that. What we cannot do—you hear this on the radio and see it in the media—is order where people will live and work. That is not possible; we do not live in that kind of society.

We are operating on many fronts to rebuild the communities of the north. The north has beautiful countryside and better quality of life than is sometimes the case in the overcrowded south east, but the south east is the economic generator of the country. We do not want to do anything to upset that; that would be barmy. On the other hand, we have to face facts. The greatest pressure regarding housing in the wider south east of England comes from families who live there. That is where the pressure comes from. It does not come from incomers from other regions or from overseas.

As I say, the greatest pressure is exerted by families in the wider south east to prevent their sons and daughters being driven out of the areas where they were born and raised. We have a duty to meet that pressure while maintaining the environment and everything else; hence the policy of the four growth areas, which I listed. It is planned that half of all the growth will take place in those four growth areas so that we do not wreck our villages and countryside. That is what the sustainable communities plan is all about. People talk about numbers and concreting over the land. However, we have proved that growth can be achieved using less land. Growth will be managed in a targeted way so that it is not just spread all over the wider south east. That way it is easier to manage the creation and development of more sustainable communities.