Housing (CSR)

Debate between Andrew Smith and Nick Raynsford

Wednesday 27th October 2010 Westminster Hall

[Mr Raynsford]

I cannot agree with the hon. Gentleman, whom I know well and for whom I have a lot of respect. The truth is that the economy was recovering during the early months of this year, as the figures show. I am not giving my own opinion; I am talking about the opinion of experienced business people, house builders, lenders and analysts who all say exactly the same thing: the housing market was recovering and there was the prospect of growth. In the past five months, that has been taken away by a series of measures—Budget measures introduced by the Government, changes in planning policy and changes affecting institutions that have been summarily abolished. A series of ad hoc, poorly co-ordinated and ill-thought-out proposals have damaged confidence in the market. Any person who is seriously worried about housing should feel very alarmed about that.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my right hon. Friend on securing this vital debate; he is speaking with his customary expertise on this very important subject. Further to the comments of the hon. Member for Cities of London and Westminster (Mr Field), is it not the case that there has been a conjunction in the restriction of supply—for all the reasons my right hon. Friend has set out—and vicious cuts in the ability of the poorest people to meet the costs of the supply that is available? The consequence of those two factors has been to carry out a vicious attack, particularly on the housing needs of the poorest in our community. Once what is happening gets across to the wider public, it will cause outrage.

[Mr Raynsford]

My right hon. Friend, who has great experience in both the financial field and housing, makes an extremely telling point. I have a huge amount of sympathy for what he is saying. From what I will say later, he will hear that I agree wholeheartedly that the impact of the measures announced by the new Government will disproportionately affect poorer people.

After Ministers have been confronted with such dire evidence of the negative impact that their policies have had over the past six months, one might expect that they would be reconsidering some of their impetuous early decisions and the harsh cuts package. One certainly might expect a Liberal Democrat Minister to wonder why he and his colleagues have lashed themselves to the mast of a Tory ship heading directly on to the rocks, steered by a demented helmsman, while the captain appears blithely unaware of the immediate perils, fixing his gaze instead on some distant coastline and imaginary sunlit uplands and—to use the words of the hon. Member for Cities of London and Westminster—prattling on about growth tomorrow, unaware that the reality is one of cuts and unemployment coming today.

Instead of changing course, Ministers continue to press ahead on their doomed journey, ignoring all the evidence of impending disaster and pinning their hopes on the so-called housing bonus incentive, which is about as unconvincing as the imagined sunlit uplands. The scheme has been promised as the panacea for the housing market for the past six months. In the summer, the Minister for Housing and Local Government promised anxious house builders that it would be launched before the summer recess. We were then told that all would be revealed in the autumn. Now we are promised a consultation in November. All the while, confidence is draining away from the housing market.

Perhaps the Minister can reveal today how that supposed panacea will work. Will it, as the Housing Minister originally claimed, apply to all new homes? That was the prospectus. I now gather that it is more likely that it will apply only to net additions to the housing stock. If that is the case—I would be grateful if the Minister confirmed that—what will that do to regeneration? What will it do to areas where there is a need to develop brownfield sites and clear properties or to improve older, substandard ones as part of that process? In such areas, it will probably be years before there is any net addition to the housing stock. What possible benefit will there be in such areas from a bonus scheme that is based solely on net additions to the stock?

--- Later in debate ---

[Mr Raynsford]

If that is the case, I am pleased to hear it, but there has been much speculation in the housing press, based on the Housing Minister’s remarks at the Conservative party conference—not an occasion that I attended—indicating that it would apply to net additions to the housing stock. There is an obvious concern, and I hope that we will have greater clarity than we have so far received on the subject.

[Mr Andrew Smith]

There is a further problem with that bonus idea. We have all been present at planning meetings at which those who are opposed to new housing developments say that they are being built for the money. Chairs of planning have been able to stand back and say, “No, the planning issues are being judged on their merits.” Will not they now have to put their hands up and say, “Yes, we are doing it for the money.”?

[Mr Raynsford]

My right hon. Friend makes a valid point. People who are opposed to housing developments will inevitably see a council’s decision to grant consent as tainted if it is to receive a financial sum as a result of doing so. That will always be a problem with such a scheme, and I highlighted the difficulties that it would create almost a year ago when I spoke with the Housing Minister, who was then the Opposition spokesman.

There are many other areas of uncertainty. How many homes will the scheme generate? We have been given some pretty flamboyant promises by the Housing Minister, but how will the Government’s estimates for the number of new homes generated compare with the 160,000 homes for which plans have already been ditched since the general election, primarily because of changes in planning rules? Tetlow King Planning has estimated in a report for the National Housing Federation that a further 120,000 to 140,000 planned homes could be lost in the coming year.

What will be the impact of cuts to funding schemes for local authorities? Which authorities will gain and which will lose? How will the bonus be split between district councils and county councils, bearing in mind that the former have to give planning consent, but that the later have to meet most consequential infrastructure costs? I hope that the Minister can give us more detailed answers to those questions, but I fear that we may have to wait rather longer, as we have waited in vain for the emergence of detail on the scheme for the past five months.

One question that I hope the Minister will answer is this: given all the questions and doubts that have been raised in so many quarters, including by those who have a real understanding and professional involvement in the field, why has the scheme not been piloted to test whether there is a realistic prospect that it will deliver the benefits that the Housing Minister constantly assures us it will bring? How can the Government claim to believe in evidence-based policy making, when they have not a shred of empirical evidence to support the case for the housing bonus incentive?

As if the damage caused by the harsh housing benefit cuts and their maladroit destabilising of the housing market was not enough, the Government have also embarked, in clear breach of Conservative election pledges, on a dismantling of the whole basis of social housing in England. Why Liberal Democrat Ministers and Members are choosing to go along with those disastrous policies is a mystery. Perhaps the Minister can give an explanation. Enjoying security in one’s own home is an asset that almost all hon. Members take for granted, as do the great majority of the population. The old adage that an Englishman’s home is his castle reflects a deep-seated belief that a secure home is a bedrock of a decent society.