Clause 89

Part of Localism Bill – in a Public Bill Committee at 5:30 pm on 15th February 2011.

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Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich 5:30 pm, 15th February 2011

This is not the right occasion to answer that. We will have an opportunity later in our proceedings to debate housing policy, when I will tell the hon. Gentleman about the inheritance of the Labour Government in 1997. As all fair-minded people would say, the overwhelming priority in the first three to four years of that Government was to tackle the backlog of disrepair, in particular in the social housing stock. The decent homes programme was, therefore, the overriding priority for the early years of the previous Government and, because it took a large proportion of the resources, not enough money was spent on developing new social housing. As time wore on, we saw the change and the trend I described from 2001 onwards—a rising trend in new housing output, both housing for sale and social housing. There is a rational explanation, but now is not the right time to expand it.

The point that I want to make is that, above all, the right polices are required to ensure that we come out of recession, achieve recovery and rebuild the housing programme as quickly as possible, because the current level of output is massively below what is required. Increasing numbers of our fellow citizens are denied a decent home or a home without gross overcrowding because of a shortage of new homes being built. It is in everyone’s interest to get the right policies in place to achieve that increased output.

What have we seen since the general election? We have seen the present Government introduce a series of measures which, far from building confidence and recovery, has damaged the market. I remind hon. Members what the figures show. From the end of 2009 until the second quarter of 2010, we saw recovery in the housing market—numbers of site visits and starts were increasing, with a modest rise in house prices and growing confidence. All the agencies, whether house builders or estate agents, were reporting that.

Since the summer, however, that recovery has stalled. We have seen a halt to the rising trend not only of site visit numbers but of house prices, which have begun to fall. We have seen worrying evidence that the number of visits to house builders is falling. Everyone confirms that there is a problem of confidence. Why is that? One element straddles both the previous and current Governments, which is the mortgage-lending situation, where, because of the consequences of the recession, mortgage lenders have been much more cautious, and their terms are not helpful to first-time buyers, who play an important part in the market.

On another occasion, I will go into the rather mixed messages that the Government have sent to both mortgage lenders and the Financial Services Authority, which are probably not helping, but I will not blame them for the mortgage famine. I will, however, blame them for two things.

First, I blame them for the intemperate action taken in the summer of 2010 to supposedly revoke regional spatial strategies, which, as everyone knows, caused considerable alarm and concern in the house building industry and which turned out to be unlawful and was struck down by the High Court. That was a serious error of judgment. It undermined confidence in the market, and it did not help the recovery.

Secondly, they drastically cut social housing investment. That meant not only the building of new social housing, but support for schemes such as Kickstart and HomeBuy Direct, which were incredibly useful for house builders to get through the difficult times. Those two programmes had made an enormous contribution in helping house builders through the worst period of the recession. Cancelling them in the summer of last year and cutting back on the national affordable housing programme were serious errors of judgment, and they have had damaging consequences on the housing market.

We have a situation where a new Government have come in, pledging to build more homes, but actually acting in a way that has damaged confidence in the market. They are now driving through a series of ill-thought-out proposals to change the way in which the  planning system operates without any testing. Is that not extraordinary? For people who believe that their view is right and that others are wrong, one would think that they might have tried to test, in one area or another, whether it works. We might then have heard the hon. Member for Henley saying that he has proof, rather than belief. There is no proof; there has been no testing; and there is no empirical evidence behind it. It is based on heroic, and in my view misguided, assumptions. It is a huge gamble at the expense of hundreds of thousands, if not millions, of people, whose homes depend on a decent planning system. I fear that the consequence will be a long period of time in which we do not produce the homes that the country needs. The Government parties will be responsible for that, and it will be our job to ensure that the public understand their culpability.