amendment of the law

Lord Pickles Excerpts

Monday 25th March 2013 Commons Chamber

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

In common with the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), I too drive a London taxi, and no reasonable offer will be refused.

This is the coalition Government’s fourth Budget—a Budget determined to stay the course and fill the sink-hole of debt left to us by the last Administration. Thanks to our actions, the deficit is down by a third—from 11% of gross domestic product under Labour to a forecast 7% this year. It is set to fall even lower to as little as 2% by 2017-18. All the while, we have kept interest rates at a record low and created 1.25 million new jobs while reducing the number of workless households by 250,000.

Local government, which accounts for a quarter of all public spending, is doing its bit to help to pay off Labour’s deficit—and the result? Since the general election, according to the Local Government Association’s own polling, residents’ satisfaction with their councils has increased. Ipsos MORI has found that two thirds of residents have not noticed any changes in the quality of council services. Well-run councils are making sensible savings, protecting front-line services and keeping council tax down. Of course more savings need to be made to pay off Labour’s debt, but we are on the side of people with gumption who protect and enhance public services, so this Budget is about rewarding aspiration and boosting growth; it is about helping businesses to create jobs, and about giving a leg up to wannabe home owners.

The housing market is critical to Britain’s economic success, yet one of the most tragic effects of Labour’s toxic legacy was its impact on that market. Whereas Margaret Thatcher gave a generation the hope of owning their own homes, Labour crushed their dreams, leaving us with a planning system bogged down by arcane rules and regulations, house building falling to its lowest peacetime rate since the 1920s, rising prices, falling mortgages, and tenants with no hope of buying. A lost generation of people were forced to stay where they were, living their best years in the hope that their lottery numbers might come up or the bank of mum and dad would bail them out. This is truly a toxic legacy.

[Mr Edward Leigh (Gainsborough) (Con)]

As usual, the Secretary of State is making a very good case. If most people do not notice any difference in the service provided by local government despite all the cuts, does that serve as a lesson for central Government as well?

[Mr Pickles]

My hon. Friend makes a very reasonable point. My own Department in central Government has reduced its running costs by 41% in real terms, so we have led by example.

The Government have set about turning things around. This is a complex area, and the solution requires action on multiple fronts. We have taken three important steps. First, we are radically reforming the planning system to crank up the engine and get things moving. Secondly, we are giving builders certainty so that they can get Britain building. Thirdly, we are intervening dramatically to help people step on to the first rung of the housing ladder. It may be helpful if I set out our approach to each of those issues.

[Mr David Hanson (Delyn) (Lab)]

Will the Secretary of State tell me how under-occupancy relates to the mortgage relief schemes that the Treasury announced last week? If, for example, one individual buys a house with three bedrooms, will that person be subject to the under-occupancy tests that apply to those in social housing?

[Mr Pickles]

I think that only the Labour party would confuse taxation with entitlement to benefit. As the right hon. Gentleman knows, since coming to office we have made great play of the need to release a number of unoccupied houses, and thus far we have made quite a push towards that. Every household in the right hon. Gentleman’s constituency is now paying £900 to subsidise housing benefit. If his council wants to pay more, it can do so.

[Mr Hanson]

Will the Secretary of State give way?

[Mr Pickles]

No. The right hon. Gentleman has had his chance to intervene, and his intervention was not very good.

Let me deal first with our reforms of the planning system. Labour’s top-down, centralist approach built nothing but resentment. Its regional strategies added a layer of red tape that paralysed planning. By the time of the general election, six years after Labour’s Planning and Compulsory Purchase Act 2004, only one in six councils had adopted a core strategy and only one in four had a five-year land supply.

Nor did Labour’s approach lead to better co-ordination. The regional spatial strategies of the unelected regional assemblies contradicted the regional economic strategies of the unelected regional development agencies. Fortunately, the Localism Act 2011 is now scrapping Labour’s regional planning. The national planning policy framework has streamlined 1,000 pages of confusing Whitehall guidance and placed local plans in pole position—safeguarding the green belt, introducing a new protection for valuable green spaces, amending bureaucratic change-of-use rules to make it easier to get redundant and empty buildings back into productive use, and kick-starting brownfield regeneration.

[Kate Green (Stretford and Urmston) (Lab)]

One innovation that has been introduced is a simplified planning system for business neighbourhoods, but very little progress seems to have been made in implementing that in Trafford Park, in my constituency. What will happen to speed up that process?

[Mr Pickles]

I will certainly have a look at the particular circumstances to which the hon. Lady refers. I have been pleased to see the growth in neighbourhood plans, which are analogous to what she is suggesting. Indeed, I visited a village in my constituency that is looking forward to introducing them. They give people and businesses a much bigger say.

[David Wright (Telford) (Lab)]

Will the Secretary of State give way?

[Mr Pickles]

Of course I will give way to my favourite Labour MP.

[David Wright]

I am grateful. City deals offer real flexibility for local communities, and we would like to work with the Department to secure a city deal for Telford. There is Homes and Communities Agency land on the ledger that could be shifted off, through a profit-sharing agreement with the Department, to make sure we get housing land and business development land. Is the Secretary of State willing to meet to talk about a city deal for Telford?

[Mr Pickles]

This is the second time the hon. Gentleman has asked whether I am willing to see him. I am; indeed, only this morning I sent out, at my own expense, for some high-quality tea and better biscuits for him. We are looking forward to seeing him.

Seven out of 10 councils have published a local plan, and the figure continues to rise. Nearly nine in 10 planning applications are approved—a 10-year high. Indications are that there are fewer planning appeals, meaning that local decision making is to the fore. The latest data from Glenigan show that planning approvals for new homes are up 62% year on year, and 33% up on the previous quarter.

However, brushing the cobwebs off the planning system is only part of the plan. As a result of Labour’s inaction, this country is crying out for more homes to meet that desperate demand, so this Government are helping to get development off the ground. Locally supported, once-mothballed large-scale sites—such as in Cranbrook, in Milton Keynes, in Eastern Quarry and in Wokingham—are now being kick-started. We should contrast that with Labour’s top-down eco-towns, which delivered not a single home.

Our programme is set to deliver 170,000 new affordable homes, almost 63,000 of which are already completed, by 2015. The Royal Institution of Chartered Surveyors says that home sales have reached their highest level in more than two and a half years, while builders from Barratt to Bovis say that Government schemes are driving increased sales, putting people back on the property path.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

We can give moderate support to the expansion of the Firstbuy scheme, which sounds good. Indeed, I recently visited such a scheme on the old Jaguar site in my constituency, which has proved a great help. However, does the Secretary of State not agree that making the mortgage expansion scheme available to second home buyers would be quite obscene, given that we are imposing a bedroom tax on those who can ill afford it?

[Mr Pickles]

The hon. Gentleman makes a reasonable point, and if that were a way in which Mrs Pickles and I could obtain a second home in Frinton, it would indeed be a scandal, but that is certainly not the Government’s intention. However, in our endeavours to ensure that I do not end up with a nice little flat in Frinton, we have to be careful not to rule out people whose marriage has just broken down, or situations in which parents are acting as part-guarantors. By September, we will be able to satisfy the hon. Gentleman on this issue.

We know that the demand is there, but it is also clear that for many individuals in very good jobs the housing ladder simply remains out of reach. Under Labour the number of first-time buyers plummeted to a 30-year low. Labour’s 2005 manifesto promised 1 million more home owners, but home ownership fell by a third of a million in the last Parliament. The industry is clear about what lies at the root of the problem. The British Property Federation says:

“Helping people needing a deposit has for some time been cited as the missing piece of a coherent housing policy”.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

What does the Secretary of State think the mortgage guarantee scheme will do to house prices? Is there a danger of increased demand and no increase in supply, and prices going up?

[Mr Pickles]

The hon. Gentleman makes a reasonable point. However, housing prices are at a more reasonable level now, we will be increasing supply and of course there will be a check on the scheme, through the Bank of England, to see that it is renewed every three years. So the worries that he raises are not correct—

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

rose—

[Mr Pickles]

The hon. Gentleman is jumping up and down. I have not said that I will give way, but I will.

[Mr Sheerman]

It is very kind of the right hon. Gentleman, who knows that I love intervening on him because I always get such a good response! It is supply that is wrong in this country; there is a national emergency in the supply of affordable housing. There are 1.5 million people on the minimum wage in this country. The waiting list in Kirklees has zoomed to having 17,500 people on it. These people do not have much money, they have little hope of ever buying their own home and they need a good affordable home now.

[Mr Pickles]

Of course they do, and it is a matter of regret that the number of affordable houses fell by 420,000-odd during Labour’s period in office, and we see a way in which we can achieve a number of affordable houses. As I said, we are well on track to deliver 170,000 and I hope that the hon. Gentleman will be pleased about that. I wish to make this contrast for him, because we have the benefit of the Leader of the Opposition’s remarks on Labour’s housing plans. He says:

“We didn’t do enough... I don’t have a solution for this, but in the end government has to invest in housing, and...it’s a massive challenge”.

I think we can all agree with that—we can all unite behind those principles—so where the last Administration wrung their hands, this Government are stepping in. In the past couple of years, we have made sure that first-time buyers and those looking to buy a brand-new property have been given a helping hand. We also reinvigorated the right to buy, building mixed communities, more affordable homes and giving social tenants a chance to move up the housing ladder. This Government believe in extending opportunity to everyone who works hard and wants to do so.

The Home Builders Federation has said:

“If people can’t buy, builders can’t build”.

It has also said that “people’s inability to buy” has been the biggest “constraint” on house building. That is why in the Budget we announced our help to buy scheme. It is here to help in two ways: it is offering an equitable loan and a mortgage guarantee.

[Clive Efford (Eltham) (Lab)]

Given that 60% of homes built in central London are being sold to overseas buyers, how does the Secretary of State think that the help to buy scheme will affect the prices of those properties and people’s ability to enter the housing market if he does not deal with that problem?

[Mr Pickles]

This scheme will not be available for foreign buyers; this is a scheme to help people from this country. That situation did not happen overnight, and the hon. Gentleman’s own Government signally failed to do anything about it. It is perhaps apposite for me to raise the issues to do with social housing.

As well as rewarding those who want to get on, we are taking tough action to tackle those who want a free ride and who are abusing the housing system. We are announcing today new measures to stop rogue landlords cashing in from renting homes to illegal migrants and we are also ensuring fair play in the allocation of taxpayer-funded social housing. We are tackling the widespread perception that the way social housing is allocated is unfair and favours foreign migrants over local people and members of the armed services.

It is true that one in 10 of all the new social housing tenancies in England go to a foreign migrant whereas in London one in five social housing tenancies belong to a foreign migrant. That is not fair to people who have worked hard and paid their taxes in Britain, so new rules will ensure that councils give priority to local people and to the armed forces when allocating social housing. That tough action will tackle the pull factors that led to unsustainable immigration under Labour and it will help community cohesion by ensuring fair play and removing the perception of unfairness that extremists exploit.

[Dame Anne Begg (Aberdeen South) (Lab)]

I am sure the right hon. Gentleman is very keen that the work force should be mobile and able to move around the country to where there is work. However, would that not make the person moving into an area no longer a local, meaning that they would not qualify for social housing?

[Mr Pickles]

As the hon. Lady knows, under this Government and the previous Government a number of schemes have enabled tenants in social housing to swap between local authorities. Those schemes will continue to operate.

We are offering a simple and proportionate response to housing needs. As my second favourite member of the Labour party, Lord Mandelson, remarked last week:

“I can’t quite remember which member of the government it was who claimed to have abolished boom and bust. Well, we abolished boom”.

Last week, Labour was again playing the politics of envy and division, attacking the fact that we are helping hard-working families in middle England, in both the north and the south. Let me be clear for Labour’s benefit. We are not about to introduce 110% or even 100% mortgages for those who cannot afford to pay, but 95% mortgages for people who, but for the financial crisis, could have put enough money aside.

The checks are in place. Applicants will need to prove they can repay the loan before they pick up the front door key. As I said to the hon. Member for Coventry North West (Mr Robinson), this is not a scheme for second home owners, but the rules need to be carefully worded so we do not slam the door on parents who want to do a bit for their kids or prevent people from rebuilding their lives after family breakdown. Unlike Labour, this Government have not given up on growing families who are in properties too small for their needs, buyers looking to make that first step, or tenants who believe they can aim higher. We will continue to work closely with the industry to do everything in our power to make sure home hopefuls realise their dreams.

[Bob Stewart (Beckenham) (Con)]

Will my right hon. Friend educate me, as I am probably mistaken, but will it be possible for a first-time buyer to buy a house that is not a new build?

[Mr Pickles]

Two schemes will be available. The first is the homebuy scheme, which will start from 1 April and is for new construction. From January next year, it will also be possible for buyers to purchase properties other than new builds.

The Government are giving the housing market a kick-start and are maintaining momentum on supply. On planning, we will be reducing planning burdens, making better use of empty buildings, bringing people back to live in town centres and supporting shops. There will be funding of more than £1 billion for thousands of new affordable and privately rented homes, for which we know there is demand. We are putting spades back into the ground and more workers back on site, and giving people more options over where they live.

We are also building on the success of our rejuvenated right to buy. Between July and September last year, numbers doubled, but we will go further. That is why we have put before Parliament regulations that will increase the discount for Londoners, where house prices are highest, to £100,000. The measure will come into effect from midnight tonight.

We are reducing waiting lists for tenants who are ready to move on. Under our schemes, new homes will be built to replace those sold. What is Labour’s response? The Local Government Association Labour group says that the new right to buy is

“a cynical move by the government which is in effect forcing a fire-sale of community assets.”

I am sorry that the shadow communities Minister, the hon. Member for Derby North (Chris Williamson), is not in the Chamber. He too attacked the scheme and bemoaned the fact that in the 1980s,

“we saw council houses being sold off in their millions, and now the Government are at it again.”—[Official Report, 6 March 2012; Vol. 541, c. 241WH.]

As the late Alan Freeman would have said, “Not half we ain’t.”

Labour are the enemies of aspiration. Every council tenant on every council estate who wanted to work hard and move up had the ladder of opportunity kicked away from them under Labour. It will be restored by the coalition. The Government have accepted Michael Heseltine’s proposals for devolving power to local areas, a natural extension of the measures in the Localism Act 2011. The Government are taking decisive action in favour of families with ambition.

The head of the CBI said that

“our call for a focus on the short-term boost of housing has been heeded, alongside an increase in longer-term big ticket infrastructure spending…by shifting £6 billion to housing and infrastructure, the Government has sowed the seeds for growth and jobs.”

The Budget is tackling Labour’s toxic legacy. It is prising open the door of opportunity and heralding a day long overdue, when those who have put everything into this country finally get the chance to own a little piece of the place they call home.

I commend the Budget to the House.