Infrastructure (Financial Assistance) Bill

Baroness Gardner of Parkes Excerpts

Tuesday 23rd October 2012 Lords Chamber

[Baroness Gardner of Parkes]

My Lords, I am glad that infrastructure is defined in Clause 1(2), as it is a word that has such a wide meaning and without it I would not feel entitled to speak on the Bill, because I do not have expertise on the financial aspects of it. Guarantees are of such importance and relevance at present, when we need jobs to be created. I believe that the guarantees under the Bill will enable works presently delayed to be carried out so that they will be of benefit both to the nation and to individuals. My comments will be directed towards subsection (2)(e), housing, which will also automatically involve subsections (2)(a), because of the linkage of services, and (2)(b), roads and transport.

For a good many years, until I reached their retiring age, I was a vice president of the National House Building Council. I hold it in high regard and it provides an excellent service for small builders and individuals. When I had to rebuild my own home in the 1980s—sadly, it had split asunder due to subsidence—I valued the security provided by its guarantee, which I believe covered the first 10 years after construction.

Later, I learnt of the wide support that it gives to the home building industry and I know that it plays a very necessary part in the provision of homes which are again so badly needed. Awards were given annually to various categories, such as small builder of the year, rather like a mini-Oscar ceremony. I hope that the NHBC will, among others, encourage builders to produce commonhold developments. It is time that we got rid of the antiquated leasehold system for residential property, which exists only in England and Hawaii, I believe.

In the Housing Reform Act 2002, we introduced commonhold, but it has hardly been used at all. I believe that the main reason is that developers prefer to make more money by selling the freehold to one body and the leasehold to another. That means that owner-occupiers, particularly in blocks of flats, have little or no control over the work carried out on their properties or the costs of them. I am sure that your Lordships are aware that I have spoken about leasehold reform many times. I still have my flat in Australia, where our commonhold is called strata title. Under that system, all flat owners are members of the body corporate and all decisions about the block are made collectively. I am convinced that once a reputable company such as Persimmon—and lots of others—builds and sells one commonhold block, it will see how popular and effective the system is; once it takes off, there will be no turning back. Getting the advantages known to the public will prove the value to home owners.

In our 2002 housing Act on this matter, there is provision for leaseholders in existing blocks to apply to convert to commonhold, but the provisions of the Act make it almost impossible, as 100% of leaseholders must agree. Apart from the fact that more often than not one owner is not contactable, it is open to abuse by any superior landlord not wanting to change. They need to buy out only one person’s vote to secure retention of the property for the superior landlord. Would it not provide a wonderful example if the Government were to support commonhold as the choice of tenure for the buildings to be converted to residences on the former Olympic site? This would provide a real legacy for the Games.

Returning to the wider issues of housing, we are all aware of the desperate need for more housing. Finance has been in short supply and mortgages have been almost unobtainable. Small builders cannot employ staff or begin construction unless they are sure of financial backing. From the comments of the noble Lord, Lord Adonis, I thought that the flexibility in this scheme should clearly mean that small builders can be supported in the same way as anyone else; it does not have to apply only to huge construction firms. Many of these small builders have huge skills and capabilities.

A lot of noble Lords will remember the late Lord Taylor. He told me that his career began when he built one house—I think in Liverpool. Selling that house provided him with the funds to build two houses and he went on to head Taylor Woodrow, which was a great achievement for him and a wonderful example for anyone looking for a future in the industry. We should not overlook that; we should support small builders who are ready and able. I like the expression “shovel ready” used by the noble Lord, Lord Adonis, and builders are shovel ready and often desperate for work at the moment. If they cannot employ staff, they cannot get going.

There is another aspect of housing on which I must comment. At present, there is a great argument about green belt and non-green belt land. I made this point during the passage of the Localism Bill, but consider it worth repeating in the context of this debate and all recent debates on the subject. There are small pockets of land in so-called green belt land that are sited in the midst of fairly built-up areas. These infill sites already have all the infrastructure in place and homes could be built on them without the delay of waiting for services, such as power, roads, and so on. This would mean that builders could get working much more quickly. Naturally, whoever owns the adjoining house will not want new neighbours, but nimbyism is not to be encouraged. Providing the new build is in harmony with the neighbours, it would rapidly become acceptable.

Reading page 3 of the Library note on this Bill today, I was disappointed to see the negative comments from the Opposition in the other place. To speak as pessimistically as Rachel Reeves did for the Opposition—in col. 689—is most disturbing. Surely we should all welcome this hope of producing not only more jobs, but also more homes. All parties must surely support the principle of this Bill. To oppose it, which in fairness she said she would not, would be to kill off hope for people who would definitely benefit if this finance made the difference between action and no action on infrastructure.

I can better understand Nick Raynsford’s remarks about “deep scepticism” and his wondering whether the Bill will deliver all that is expected of it. We have heard similar comments from the noble Lord, Lord Adonis. We all hope that it will deliver, but no one can know these things for certain. Without this Bill, I believe there is no hope for this necessary progress. It is a money Bill and I understand the significance of that, but I do not mind speaking on it. It is not something that we have any right to do anything about. We must go ahead with this financial assistance scheme; we must look to the Government to ensure that the money is put to good use to provide homes, systems, schemes and developments to the benefit of those needing work and homes.

I found many of the comments made by the noble Lord, Lord Adonis, very interesting, such as his comments on toll structures. I have just come back from Australia, and I was very interested to see how well the toll roads work out there. Whether they are appropriate for here, I do not know. That is not my field of expertise. The noble Lord said that things have not progressed but perhaps this Bill will help them to progress. We have to look at this positively and go ahead with this action by the Government. The important thing is that the money has to be spent wisely on guarantees. No one seems to be able to get a guarantee now from a bank for pretty well anything, particularly for major projects but also for small projects. My appeal today is that we try to help small builders to get going so that homes can be built immediately for those who desperately need them and so that builders can provide employment. I support the Bill.