Barker Review

Part of the debate – in Westminster Hall at 3:25 pm on 28th April 2004.

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Photo of John Hayes John Hayes Shadow Minister (Communities and Local Government) (Housing and Planning) 3:25 pm, 28th April 2004

This has been an important and strategic debate. I congratulate the Government on encouraging such a debate by commissioning the Barker report. I also congratulate my hon. Friend Mr. Norman on giving us the opportunity to debate it in Westminster Hall; he made what I thought was one of the most cogent and accomplished speeches that I have heard in this place.

I say that I congratulate the Government, but I introduce a caveat. It seems odd that the Government should have commissioned an independent survey of housing strategy and simultaneously had two relevant Bills on the Floor of the House—the Housing Bill and the Planning and Compulsory Purchase Bill. Those Bills were debated before the report was published. If the Government want that sort of analysis, they should legislate on the back of it. They should consider the recommendations and legislate only if necessary. In that respect, the Government's chronology is subject to proper criticism.

To a degree, my observations about the Barker report have already been made, but I shall describe them briefly. First, the statistical assessment on which Barker is based is questionable. My hon. Friend the Member for Tunbridge Wells highlighted the problem of the 2001 census data, which seems to undermine the very foundation of Barker's measurement of the relationship between dwellings and households. It is also true, as my hon. Friend said, that Barker assumes that social trends will continue unabated, or in some cases counter-intuitively.

The Government's assessment, on which Barker relies so heavily, is that the number of single-person households will decline over time, whereas anecdotal suggestions are that it will grow. It assumes that the current level of immigration will be maintained, although some would say it is unsustainable. It assumes that current social trends—divorce rates, birth rates and so on—will be maintained. The assumptions that underpin Barker are at least questionable.

In straightforward terms, the unsuitable mix of housing—that is, too little social housing, as we heard from Mr. Hopkins—and the problem of affordability, which is related not to supply but to income and mortgage eligibility, may be at the heart of the housing crisis. It is not simply about numbers, as Barker encourages us to believe.

Secondly, Barker assumes that inadequate supply is the main driver in house price inflation and house price volatility. As my hon. Friend the Member for Tunbridge Wells suggests, it is a mix of several demand-side pressures that create high house prices and keep them high. It is the low interest rates, the relative unattractiveness of alternative investment vehicles, the level of borrowing secured by housing equity and the disproportionate allure of home ownership in the British culture that have driven up house prices and kept them up.

To apply supply-side solutions to the problem would be to use an extraordinarily blunt instrument. Given that only 1 per cent. of housing is new, and that only 10 per cent. of transactions relate to new properties, the idea that one can affect house prices by supply-side means seems at best hopeful and at worst an illusion.