My Lords, I am pleased to speak in this debate from these Benches. These days I am not able to speak very often in the House but, given my experience of chairing three housing associations over the last 14 years, I would like to contribute to this debate. I declare my register of interests, particularly as chair of Housing and Care 21, a housing association providing retirement housing.
Housing associations are not perfect but I have always appreciated that there is huge potential to improve their performance and make their operations more effective. That is what I have done in that sector over the last 14 years. Housing associations are a force for good. They have huge commitment, the potential to build many more homes and a record of delivery. I asked the chief executive of my housing association what he considered was the single most important proposal that we could put to the Government in this debate. He said that we simply need greater certainty and continuity of appropriate policies.
The problem is that housing does not benefit from the mentality of politicians who are always looking for short-term fixes, prefer policies which provide partisan and party advantage and whose timeframe does not go beyond five years. Over the last seven years, the Government’s partisan advantage and focus has been to get people to buy more homes. The coalition had to work hard to engender any interest in social housing but at least we delivered on what was agreed. The higher rent policy—the so-called affordable rents—provided the mechanism to build so-called affordable homes for rent to reduce the amount of grant paid out. We on these Benches warned at the time that it would be more expensive in the long term to do this and would simply put pressure on the housing benefit bill, which it has. Now, despite commitments from the Government to the contrary, we face a 1% reduction in rents, which has simply led to housing associations reducing their development and investment plans. We also have the unresolved issue of the housing allowance rent caps. Certainty on those two issues going forward is now essential.
What other issues should we be looking at as a sector? First, it has been mentioned already in this debate that it is absolutely ridiculous for the Prime Minister to say that she will take charge of housing. As Michael Heseltine said last weekend, we need a gauleiter for housing at Cabinet level. That person should bring in people from the sector who know how to deliver on housing, exactly as Macmillan told us how to do it in the 1950s.
The second issue we need to resolve is that housing associations should concentrate on their social purpose, which is to build homes for people of modest means. In my view it is hugely worrying that they are being diverted into speculative building as part of a new business model to fund social housing. If this goes on, it will end in disaster and is a distraction from housing associations’ proper focus and what they are good at doing.
Stability and continuity of policy and partnership working are essential. I agree with every single word of the speeches of the noble Lords, Lord Kirkham and Lord Horam. As my noble friend Lord Stunell said, one problem is that private builders will not build more than 150,000 to 180,000 houses per annum. Sadly, their business model depends on rising prices and they will not want greater supply bringing prices down. I say with respect to the noble Baroness, Lady Neville-Rolfe, that this business is not like Tesco. It is a cyclical business full of huge risk. Every time we have a cyclical downturn, capacity in the sector is wiped out. That is why it is very difficult to get productivity up unless we have continuity. I emphasise that the most important thing Macmillan demonstrated was that for the sector to be effective a partnership is required between the public and private sectors. That is needed if we are to increase the supply of homes. That is the lesson from that time and that is what is urgently needed now. Now we also have housing associations to provide a major source of potential for more development. They can also act in a countercyclical way, as the noble Lord, Lord Horam, explained.
I share the scepticism about short-term fixes such as Help to Buy. That scheme may be good politically but it has led to price increases. Somebody described it as a cocaine fix for private developers. We have to recognise that in many respects that policy has put housing out of reach for even more people. There is a huge capacity for improving the supply of housing but it requires leadership, partnership between the private, public and voluntary sectors and a realistic timeframe for achievement.