Construction Industry

Baroness Dean of Thornton-le-Fylde Excerpts

Thursday 23rd October 2014 Lords Chamber

[Baroness Dean of Thornton-le-Fylde (Lab)]

My Lords, I, too, join others in thanking my noble friend Lord O’Neill of Clackmannan for this debate, and particularly for putting in the element about housing. There is no doubt that our construction industry and some of the major engineering and construction projects going on at the moment in the UK are something to be proud of and deserve a debate in their own right. I declare an interest as a former non-executive director of Taylor Wimpey at the time when the £60,000 house was built.

I think my noble friend Lord Prescott was a bit too mea culpa. Those who worked closely with him while he was Secretary of State covering housing know that he achieved an awful lot. He inherited a social housing stock that had been severely diminished by the sell-off of local authority housing without the requirement to replenish it. He doubled the money we had at the Housing Corporation, where I was chairman. However, the issue of shortage of housing in this country is not new. It has been creeping up on us for decades. Certainly, the recent report from the House of Commons says that if current trends continue—it takes into account government policy—in the next six years the gap between supply of housing and demand will be 1.3 million. That is a very scary figure. We all know the impact of that on house prices—although not all over the country.

A number of reports have been mentioned this morning. I agree with what has been said about the Lyons report but there is another report from Alan Milburn’s Social Mobility and Child Poverty Commission, which is interesting to read. It says that home ownership for 25 year-olds has reduced from 45% to 21%. A quarter of adults up to the age of 35 are now having to live with their parents, and in London the average age of a first-time house buyer is over 40. Those are very serious indications for us. It is not good. The social damage to our country’s cohesion, stability, independence and aspiration is enormous.

As I know that a lot of noble Lords will be dealing with those impacts, I will concentrate on the impact on our economy. The Home Builders Federation says that every new house built creates 4.5 jobs—2.3 of them directly. So, for every 100,000 homes we build—and we need 200,000 a year—we create something like 250,000 jobs. National Housing Federation research says that every £1 spent on housing generates £2.40 in the wider economy. The Office for National Statistics says that every job filled creates a gross added value of £44,000 and that building 100,000 houses adds something like £28 billion of growth to our GDP. The facts are absolutely clear. We are losing out not just socially but economically. In September, the CBI in Housing Britain analysed the crisis. It said that businesses were affected by £3.2 billion a year in housing-related costs and £770 million a year in transport-related costs.

I asked myself in preparation for this debate why developments in aviation, transport such as HS2 and Crossrail, and energy are not required to go to local authorities, which are involved in consultation, but are considered part of the national UK infrastructure and have to go to the infrastructure planning committee, yet housing does not. I am not talking about 25 houses here and there. In my humble view, all the proposals that have been made will not solve our housing problem individually. We need a whole panacea of developments. This has to include large housing developments. I know that is unpopular and controversial, but I do not believe that infill housing will respond to the problems we have.

I agreed very much with my noble friend Lord Rooker when he talked about urban expansion. He was absolutely right; we need to look at that. I know the concerns about the design and quality of large infrastructure. I am currently a non-executive director of the regulated board of Places for People, which is a large registered social landlord. We have a development in Milton Keynes that is 10,000 plots. If you went there today, the 10,000 properties have not been built but the roads have, the 10,000 trees are in, a school has been built and another school is due next year. The infrastructure has to be there when the people move in, not after they go and live in those areas.

The Milburn commission also talks about green belt swaps. The Royal Institution of Chartered Surveyors in its September report, Property in Politics, recommends a new description—amberfield. This touches on the point made by my noble friend Lord Rooker. The green belt policy legislation is more than 60 years old. We need to return to it. I know that is controversial. It needs political leadership and we are lacking that at the moment. I have always been amazed that we build on school playing fields and get a hoo-hah, yet down the road can be a shut-down pig farm with dreadful land quality that we leave and protect. There is something wrong somewhere in that. The Wolfson economics prize—the second largest economics prize after the Nobel prize—asked this year:

“How would you deliver a new Garden City which is visionary, economically viable, and popular?”.

There were more than 300 ideas. Two of the five judges came from the housing industry—Tony Pidgley from the private sector and David Cowans from Places for People. They said that you cannot do it in one place; it has to be across the board. As well as a social crisis this is an economic crisis that we will have to pick up, and we will rue the day that we lacked leadership in making sure we changed the situation.