Housing (Hertfordshire)

Part of the debate – in Westminster Hall at 3:10 pm on 18th April 2007.

Alert me about debates like this

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs) 3:10 pm, 18th April 2007

I congratulate Anne Main on securing a debate on this important subject. As a fellow member of the Select Committee on the Office of the Deputy Prime Minister—now the DCLG—I know that she understands well the frustrations and challenges of this sensitive area of policy. The issues raised by a debate on housing in Hertfordshire have implications for counties such as my own of Gloucestershire and, indeed, for the whole country.

The background to the issue is that we face multiple crises, including a crisis in housing affordability and an impending environmental disaster. On housing affordability, the situation is worst for those on low incomes and new home buyers, and it is acute for those in otherwise prosperous areas such as Hertfordshire and Gloucestershire. The Joseph Rowntree Foundation study suggests that housing costs in the south of England now take up 40 per cent. of the average earnings of first-time buyers, compared with only 25 per cent. in Scotland. It also suggests that 50 per cent. of younger working households cannot afford to buy a first home in the south of England.

The environmental crisis is also acute, and reference must be made to that, too. The implications of climate change are well known, and I shall not rehearse them today, but the problem in the UK is that emissions are still rising. CO2 emissions have increased by 2.5 per cent. since the Government came to power, adding to the 6 per cent. of global cumulative greenhouse gas emissions that the UK has already produced and the 14 per cent. of current emissions for which the EU is collectively responsible. These days, people often seem to think that we can escape our responsibilities simply by pointing to the emissions of countries such as China and India, but I am afraid that this country's collective and historic responsibility is still great.

As the Select Committee knows, the Government's response to the housing crisis has been distinctly one dimensional. Increasingly, it relies overwhelmingly on simply expanding the supply of housing in areas of predicted and current high demand, such as Hertfordshire and Gloucestershire—the so-called predict and provide strategy. Obviously, that delights many commercial developers, for whom building urban extensions around affluent towns such as St. Albans and Cheltenham is more profitable than regenerating inner cities, providing struggling rural communities with small developments that might benefit them as they try to keep their schools and shops open, or providing more housing in lower-income counties such as Cornwall, where an acute affordability crisis is being fuelled by second homes.

In its report last June, the Select Committee touched on issues such as second homes and other factors beyond the basic supply of housing. For instance, we commented on affordability in rural areas, saying:

"The level of demand for private housing in some rural areas fuelled by migration from elsewhere in the UK and the desire for second homes exceeds the potential supply to the extent that any increase in house-building would be unlikely to affect affordability. The provision of social rented and affordable housing is therefore particularly important in these areas. We recommend that the Government increases its allocation to the Housing Corporation for rural areas."

I should be grateful if the Minister could confirm whether that has yet happened.

Those comments point to several factors beyond the basic supply of houses, including the balance between social and market housing. They raise the issue of migration, which Mr. Lilley mentioned. They also touch on the desire for second homes.

On the balance between social and market housing, there has been a dramatic shift since the 1970s, when only 50 per cent. of the population were home owners. Today, that figure is 70 per cent.

Obviously, the Conservative policy of right to buy, I am afraid, contributed to that shift, which has undermined the social housing sector. However, the change has not just taken place under the Conservatives. Since 1998, 408,000 social housing units have been sold off and only 180,000 built. Therefore, the right to buy has not been balanced, as it needs to be, with building and buying of new social housing. Also, as credit has been extended ever more unrealistically by mortgage lenders, house prices have continued to rise. It is critical that, as well as examining issues of supply, the Government address issues on the demand side, in particular reinvigorating the social housing sector and examining the mix of tenures.

Migration is also a factor. I will not dwell on that issue much, as the right hon. Gentleman has already discussed it at length. However, I repeat my disagreement with his view that the original cause is international immigration. In fact, I think that household growth, population growth from within the existing population and the flight of older, more affluent households are the key factors.