Queen’s Speech - Debate (4th Day)

Part of the debate – in the House of Lords at 9:47 pm on 27th June 2017.

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Photo of Lord Best Lord Best Crossbench 9:47 pm, 27th June 2017

My Lords, my contribution to this debate considers those aspects of the gracious Speech that relate to the nation’s housing. Of course, I begin by saying how deeply distressed everyone concerned with social housing has been by the terrifying, horrifying tragedy of the Grenfell Tower fire. I join the many others stressing that robust building regulations clearly must come before cost-cutting and deregulation and, equally clearly, must be better enforced. In addition, I have three practical questions for the Minister.

First, in terms of the resources to make a number of other tower blocks safe, particularly in relation to external cladding, I know the Secretary of State has said that central government’s help and support to local authorities will include funding for remedial works. Am I right in assuming that the housing associations, a number of which have taken on the ownership and management of previously council-owned properties, can also expect to receive this new financial support?

Secondly, can we be assured that the resources for this important task will not be taken from the funding previously announced for the building of desperately needed new homes? Will the funds instead be additional, from new grants and/or from raising the cap on council borrowing for housing purposes and/or from ending the current compulsory 1% real reductions each year in rents, which have hampered spending on property maintenance and renovation?

Thirdly, was there a special accountability problem for Grenfell Tower because of the unusual governance structure adopted by Kensington and Chelsea, with ownership by the council and management by a separate tenant management organisation? Although a TMO should give greater opportunities for the voice of the tenant to be heard and heeded, this seems to have broken down completely in Kensington. Is the current inquiry considering whether the ownership and management framework in this case might have meant that decisions—to prevent a disaster as well as to deal with one—fell, catastrophically, between two parties, providing lessons for this particular governance model elsewhere?

To turn to other issues in the gracious Speech, I support in principle the Government’s plans to prohibit landlords and letting agents from charging fees to tenants, and I look forward to consideration of the details in the promised Bill. I also greatly welcome the Government’s commitment to improving the position of leaseholders, on which they will consult. Selling houses on a leasehold basis, with rapidly escalating ground rents, is only one of the scams that must be addressed.

The Government have also committed to seeing through their proposals to ensure that sufficient land is available for the building of their new target of 1.5 million homes by 2022. That is entirely right, but my anxiety is that too few of those new homes will be affordable to those who are on average and below-average earnings. That problem—exacerbated by disjointed policies on rents and housing benefit—will have to await debate on another day.

I conclude with some thoughts on the impact of Brexit on the Government’s plans for increased housebuilding. Housing depends on borrowing, so house buyers and housing developers are extremely vulnerable to economic instability and changes in interest rates. Housing is hit by a fall in the value of the pound because that means rising costs of imported building materials and imported labour. Could untoward economic effects of Brexit on housing be offset by reductions in EU inward migration? Of the household growth on which the Government’s housebuilding targets are predicated, 37% is attributable to immigration, so would less immigration from the EU enable the Government to lower its targets for new housebuilding? The Department for Communities and Local Government’s projections for the number of new homes that will be needed already assume a huge fall in net immigration—from 385,000 last year to just 170,500 by 2021. It seems most improbable that the total drop in migration overall will mean that the figures fall below those on which the current housing targets are calculated. Moreover, depending on the deal struck for Brits who live in the rest of the EU, and depending on the exchange rate, housing pressures may arise from some of those million-plus citizens returning to the UK.

Curbs on EU inward migration could affect the construction industry because of its abysmal record in recruiting and training an indigenous skilled workforce. The Construction Industry Training Board forecasts a deficit of 200,000 workers by 2020, following the retirement of 430,000 workers from 2010 to 2020. Any additional loss at this time from the 194,000 building workers who come from other EU countries—notably Poland—would certainly create serious difficulties. New apprenticeship schemes and even the prefabrication of homes in factories will not overcome the skills shortages any time soon. A transitional period for any limits on building workers from the EU will be essential if the housing that we need is not to take a serious hit. I trust that the Government will keep the nation’s vital housing requirements in mind as the great Brexit challenge moves on.