Housing

Clive Betts Excerpts

Wednesday 5th September 2012 Commons Chamber

[The Minister for Housing (Mr Mark Prisk)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“welcomes the first Opposition Day debate on housing in this Parliament; notes that house building under the previous administration fell to its lowest peacetime level since the 1920s; further notes that house building starts in England were 29 per cent higher in 2011 compared with 2009; believes there is still more to do to get Britain building; further notes that housing is the most affordable for first-time buyers for a decade and mortgage payments are the lowest since 1997 as a direct consequence of the decisive action to tackle the deficit brought about by the previous administration; notes that the Coalition Government’s affordable housing programme will deliver 170,000 affordable homes by 2015 and leverage £19.5 billion of investment; and welcomes the steps being taken to increase house building and unlock stalled sites and the comprehensive programme to get empty homes back into productive use.”

Well, it has taken the Opposition two years. I am referring not to the speech of the hon. Member for Birmingham, Erdington (Jack Dromey) but to the fact that today I can welcome their finally having taken such an interest in housing that they have decided to hold their first Opposition day debate on it in this Parliament. Two and a half years and not a peep from them. I understand the hyperbole and enthusiastic language of the hon. Member for Birmingham, Erdington, but the fact that they have not been able to come up with their own debates about housing shows just how interested they are in the subject.

I thank the hon. Gentleman, of course, for giving me this opportunity on what is effectively my first day in the job to explain how the Government will reverse the housing problems that we inherited. However, I thought he was a little uncharitable about my predecessor, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), whom I thank. He showed a unique enthusiasm and energy, which I hope to match. As the hon. Member for Birmingham, Erdington said, I am a modest man. It was once said that if somebody is modest in politics it is possibly because they have a lot to be modest about, but I hope to be able to match my predecessor’s energy and ensure that we reverse the problems that we inherited from the last Government.

[Mr Clive Betts (Sheffield South East) (Lab)]

Will the Minister give way?

[Mr Prisk]

With respect, I would like to try to respond to the hon. Member for Birmingham, Erdington, and a lot of Members want to speak. I will give way in a moment, but I wish to canter through my speech, because this debate should be for Back Benchers as much as Front Benchers.

I note with interest a whole series of assertions in the Opposition’s motion. However, the fact cannot be ignored that under the Labour Government, house building fell to the lowest peacetime level since the 1920s. Labour had its nine different Ministers, its top-down targets and its 10 different housing Acts, but for all that activity it delivered very little. Maybe that is why it has taken it two and a half years to muster up the courage to have a debate on the subject.

In contrast, the current Government ensured that house building starts in England were 29% higher in 2011 than in 2009. Our No. 1 priority is to ensure that we reduce the Labour deficit and get the economy growing. We want to help local business people build vibrant neighbourhoods, set people free to create the places where they want to live and give them back the control of the planning system that they lost under the last Administration.

[Mr Prisk]

If I have learnt anything on the first day, it is to stick to the information in front of me and not engage in idle speculation. I have yet not had the opportunity to meet the new planning Minister.

The hon. Member for Birmingham, Erdington was right to emphasise the economic issue—he and I know that from our backgrounds. The housing market has the potential to be a catalyst for the economy. For every 100,000 homes built, about 1% is added to GDP. The industry is labour intensive and it is important to ensure that that economic benefit is there.

[Mr Betts]

I congratulate the Minister on his appointment. Reference has been made to his predecessor’s gold standard, which he set out in a Select Committee hearing in response to a question that I asked. The Government agreed to a target of building more houses a year than the previous Government built before the recession. Is that still the Government’s target?

[Mr Prisk]

We are not in a position to take the view that we want to determine how the market works. We have Government programmes, and we will set targets for them that we can deliver. However, unlike the Labour party, we do not believe that Whitehall’s job is to run the marketplace. I want to ensure that, when the Labour party thinks about those issues, it recognises that the Government are committed to increasing the supply of housing and, as the hon. Member for Birmingham, Erdington mentioned, to addressing the long-standing, cross-party, intergenerational issue of affordable housing.

Last November, we introduced an ambitious package of measures through the housing strategy to boost house building. However, unlike the Labour party, we know that we cannot achieve that by trying to control the market from Whitehall. The old system of setting top-down targets for housing, with reams of planning guidance, did not deliver the houses we need or the places that people wish to live in. Our strategy is deliberately different from that. Instead of setting a top-down target from Whitehall, it is designed to lay the foundations for a systematic shift in the way in which the housing markets work.

--- Later in debate ---

[Mr Clive Betts (Sheffield South East) (Lab)]

Listening to the new Minister for Housing reminded me of the words of a previous Prime Minister: “Crisis, what crisis?” The crisis is that we should be building 250,000 homes a year, but we are building 100,000—and the number is falling. The average age of first-time buyers is rising, waiting lists for social housing are rising, rents are rising, homelessness is rising, and the number of houses we are building is falling. In my definition, that is a crisis.

The fact that we only built 50,000 social homes—or affordable homes, as the Government now choose to describe them, although not all of them are social homes or indeed affordable—in the first year of this Government, and only 15,000 last year, demonstrates the scale of the problem that we face. Last year, in my own city of Sheffield, we built two affordable homes. My hon. Friends the Members for Penistone and Stocksbridge (Angela Smith) and for Sheffield Central (Paul Blomfield) and I could each let those homes to completely deserving cases in the first half hour of any surgery we hold. That is the scale of the problem.

I do not claim that the 13 years of Labour government were perfect, or that we built sufficient homes. We had a reasonable record, but we did not build enough. However, the fact that we did not build enough makes this Government’s performance in building even fewer that much worse—and our performance is no justification for that. The Labour Government had an excellent record on the decent homes programme. There was a clear national target to deal with the £19 billion backlog of disrepair that has already been mentioned. We then allowed local authorities and housing associations to get on with the job of delivering that target at local level.

The reality for new construction is that the private sector—the major developers—has never built more than 150,000 homes in a year, and probably will not get near that number again any time soon. If we are going to hit the 250,000 target—and I hope we can get more homes built by the private rental sector and the institutional investors, and through self-build, as we saw on the Select Committee visit to Almere—we will have to build far more homes for social rent. We have to be brave. Whether this Government do it or a future Government, we have to set a target for 100,000 social rented homes a year. We delivered the decent homes programme and there is no reason why we could not deliver such a programme in the future.

The Select Committee recently published a report that said that there is no one silver bullet or magic solution to building sufficient homes. We did come up with several ideas that were agreed cross-party by all members of the Committee, but I was disappointed that the Government’s response dismissed or downplayed every single one. I ask the new Minister to go back and have another look, because some of those ideas are very appropriate.

At a time when we are trying to build more houses in this country and when, as I understand it, the Government are looking to underwrite investment in social housing, it is ludicrous that they do not even mention housing authorities or arm’s length management organisations as part of that programme, only housing associations. Of course, housing associations have a role to play, but why are we capping how much borrowing local authorities can do, when under prudential rules they could do more? These are the only form of assets against which local authorities cannot freely borrow to invest. Why is that rule there?

Why do we have these arcane Treasury rules that treat borrowing for investment in housing by local authorities differently from how it is treated in every other EU country, including not only Greece, which somebody might mention as a reason for not doing it, but Germany? Why not look at what happens there and why they are successful? Why not look at the historical grant of housing associations and how we can redefine that to allow them to borrow more money? Of course, we ought to support attempts by housing associations and local authorities to borrow in the retail markets, but a housing investment bank to build the money in the private sector and connect it with those who want to invest would be another major step forward that the Government could get involved in. It might need public subsidy or the sort of underwriting that the Government are now considering, but these are big ideas.

The idea of self-build, about which the previous Housing Minister was enthusiastic, needs a little Government support to fund pilots and get local authorities shaping up those schemes, as we saw in the Netherlands, but it could deliver tens of thousands of homes a year.

When in doubt, the Government tend to blame the planning system, but it is this Government’s planning system now—since the Localism Act 2011 and the changes in the national planning policy framework. They cannot keep blaming the planning system and creating more uncertainty about change, because that uncertainty will reduce the number of planning applications and slow down the whole system.

I hope that in due course we will have a further debate on the Select Committee’s report. It was an attempt to lay out several ways of getting house building going in this country, but the response was deeply disappointing. I ask the Minister to have a look at it, because it contained many ideas that, if put into practice, could move us towards the 250,000 homes a year that the country needs in order to solve its housing crisis.