Housing: Five-Year Plan

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

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Photo of Baroness Hanham Baroness Hanham Shadow Minister, Local and Devolved Government Affairs, Deputy Chief Whip, Whips 6:45 pm, 24th January 2005

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.