Lord Greaves
To ask Her Majesty’s Government what is their assessment of the impact of the United Kingdom leaving the European Union on the provision of housing that people can afford.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, the Government are committed to achieving an ambitious EU exit deal and building the homes that this country needs. In pursuing its housing policies, DCLG engages widely with stakeholders across the housing sector. The Government are on track to raise housing supply, by the end of this Parliament, to its highest annual level since 1970 and then to 300,000 per year on average by the mid-2020s.
Lord Greaves (LD)
My Lords, I wish the Government the best of luck in that endeavour and will be happy to welcome it when it happens. Only yesterday, the Federation of Master Builders issued the result of a survey of small and medium-sized construction firm members, in which three-quarters of them said that it would have a negative impact on the health of their business if any of their EU workers returned to their country of origin. The figure for the value of these workers was much higher as well. What are the Government doing to make sure that workers from European Union countries working in the construction industry—many of them building houses—do not stay away, as is being suggested, even after this Christmas?
Lord Bourne of Aberystwyth
My Lords, the noble Lord is right to highlight the importance to the construction sector of workers from the EU; they constitute about 18% across the country, although obviously it is higher than that in some parts of the country and certainly in London. The Government are of course very much aware of this and it is part of our negotiations. The noble Lord will be aware that we have made a fair and serious offer to protect the rights and entitlements of EU nationals, which is all part of making sure that we extend a welcome to those people who are part of the fabric of our life and who are very important to our economy.
Lord Forsyth of Drumlean (Con)
My Lords, I declare an interest, as on the register, as chairman of a bank. Does my noble friend agree that the decision by the European Banking Authority to increase the cost of capital for banks that lend to small and medium-sized builders from 100% to 150% has added hugely to the cost of building houses, and that, once we have left the European Union, the Bank of England will be free to set rules that reflect the interests of our economy and the policy of Her Majesty's Government to encourage more housebuilding?
Lord Bourne of Aberystwyth
My Lords, my noble friend is, of course, right about the adverse effect that the decision to raise those interest rates will have on the construction sector in the United Kingdom and elsewhere, and he is right to say that the Bank of England will have increased freedom once we leave the EU. However, of course, banks have to compete in an international environment as well.
Baroness Smith of Basildon (Lab)
My Lords, as Christmas is upon us we all think of those who are homeless, as was raised in the other place just yesterday. Last year, the European Investment Bank invested £1 billion in social housing projects in the UK. That made it the largest investor in social housing here at home. Yet now Article 50 has been triggered, it is saying that that investment will stop. What plans do the Government have to replace that investment, and how will the Minister address the plight of the homeless this Christmas and in the future without that investment?
Lord Bourne of Aberystwyth
My Lords, first, the noble Baroness is right that our thoughts, particularly at this time of year, are very much with the homeless and rough sleepers, which very much presents a problem in the United Kingdom and elsewhere. She is also right that the European Investment Bank invests significantly in this area, but other banks do too. We have obviously invested a lot in terms of our own domestic budget recently—with the social impact bond, for example, which is having an effect. I spoke yesterday to the noble Lord, Lord Bird, about an initiative that he is involved in in a parallel way. So there is a lot going on. But the noble Baroness is right to highlight the importance of ensuring that we plug the gaps of some investment that will not be there in future.
Lord Hamilton of Epsom (Con)
My Lords, does not my noble friend’s view on the housing market contrast somewhat with the threats we were given during the referendum campaign from the then Chancellor, backed by the Governor of the Bank of England, that interest rates were going to soar if we voted out—they have gone down—and that housing prices would drop like a stone, whereas they have gone up? Are we not actually rather blessed by Brexit, rather than the reverse?
Lord Bourne of Aberystwyth
My Lords, the Government are focused resolutely on the future as to how we ensure that we get a very good deal that is very much in the interests of the UK and the deep and special partnership with the European Union that we seek. As he will know, negotiations have turned a corner; we seem to be on a very firm footing to ensure that we get that deep and special partnership with the European Union, and negotiations go on on that basis.
Baroness Andrews (Lab)
My Lords, can I bring the Minister back to the question that my noble friend asked about the £1 billion that we get from the European Investment Bank? Unfortunately, he did not answer the question. How is he going to replace it, and what can we expect the mechanism to be for that additional social housing that we so badly need?
Lord Bourne of Aberystwyth
My Lords, the noble Baroness will know that it is not quite as simple as she makes it sound. It is not £1 billion that comes from nowhere; it comes in relation to the fact that we pay into the European Union as well as take out. So I remind the noble Baroness gently that it is not quite as simple as she makes it sound.
I did answer the question by saying that there was obviously a gap that needs plugging. We are doing that in terms of measures in the Budget that she will be aware of on homelessness. We have £1 billion committed to tackling homelessness and rough sleeping. That is a significant measure to tackle a deep-seated problem. She will also have heard me say that this is not just an issue for government; it is an issue for local authorities, our partners and for individuals.
Lord Wallace of Saltaire (LD)
My Lords, I am told by social housing associations in Yorkshire that the big building companies are deeply reluctant to take on apprentices and train our own people. They find it cheaper and easier to recruit directly from eastern Europe and that does not get in the way of the bonuses they offer their executives. Given that the big building companies are now extremely profitable, what can the Government do to bring pressure on them to increase the number of apprentices they take on and to train our own workers?
Lord Bourne of Aberystwyth
My Lords, the noble Lord raises a very interesting point. I have not seen the example that he mentioned. However, it is the case that we need to increase the take-up of apprentices up and down the country, which I think is happening in parts of the country. He will also be aware, of course, that in the Budget we took measures to ensure that there is movement towards encouraging small and medium-sized building enterprises rather than just the large builders. That element of competition will help address the problem that he raises.