Infrastructure (Financial Assistance) Bill

Baroness Maddock Excerpts

Tuesday 23rd October 2012 Lords Chamber

[Baroness Maddock]

My Lords, I always enjoy the contributions of the noble Lord, Lord Desai. I declare an interest as a vice-president of the Local Government Association. This is an important Bill, particularly for housebuilding, which is what I shall concentrate on. It was interesting that Radio 4 yesterday morning highlighted rapidly rising rents in the private sector and highlighted one of the reasons for this—the shortage of homes that we face in the United Kingdom. Housing is a vital part of our United Kingdom infrastructure. Not only does housebuilding help to boost the economy, particularly the construction industry—a point made by my noble friend Lady Gardner—it also solves a number of other significant social problems, including social housing waiting lists, high rents, the affordability of homes for first-time buyers and overcrowding, which is becoming acute in housing in this country. However, despite this, the coalition Government inherited a housing crisis in May 2010.

Under successive Governments, the number of homes being built has been declining. In particular, social housing stocks have been extremely badly hit. The coalition Government are committed to building more homes. We have already said that we expect to build 170,000 new social homes by the end of this Parliament. However, while the Government are investing state money in many of these projects, there is also a real need for support for private developers to get housebuilding projects under way, a point made by my noble friend Lady Gardner of Parkes. The Bill will allow the Government to provide loans, guarantees and other financial support for infrastructure of up to £50 billion. As I understand it, £10 billion of this could be used to support housebuilding.

One of the problems of our housing infrastructure is its age. Very many of our houses were built in the last century, the century before and even before that. This means that our housing stock is incredibly energy inefficient and this does not help other matters that we are trying to deal with in reducing our carbon emissions. We just do not have enough houses. As I understand it, in 2011 390,000 families were created, but we managed to provide just in excess of 100,000 new homes.

The previous Government, despite the wide-ranging but scathing opening remarks of the noble Lord, Lord Adonis, did not do a lot for housebuilding. Housing construction—perhaps it was not all due to the previous Government—actually fell off a cliff during the financial crisis. In 2008-09, fewer than 100,000 new properties were started. Although the number has increased since then, we are still a long way off building enough new homes. I understand that the revised figure for 2011-12, as I mentioned earlier, is something in excess of 100,000 properties. Despite this positive news, a far higher percentage of these new starts were public sector-led, either by housing associations or local government, than were privately funded. In 2010-11, 24% of constructions were publicly financed compared to between 9% and 13% in the decade before.

The noble Lord, Lord Adonis, did not talk too much in his opening comments about his own Government’s record on housebuilding. During 13 years of the Labour Government, the social housing stock fell by well over 400,000. Although they had ambitious targets, they did not meet them in the 13 years. In fact, they consistently failed to meet their social housing target and, in their last year of office, they missed it by 78,000.

The lack of social housing and delivery of new private sector housing has led to a number of very serious consequences. Average house prices in January 2012 were estimated to be under £200,000, and for those of us who spend our time in London, we know that here—and particularly in Westminster—the position is even worse. This is an increase in the past decade of almost 70%. An average of 21,658 properties has been deemed to be overcrowded at any one point in the past three years. The lack of supply has also meant that homes cost more to rent. The mean rent of the private rented sector in 2010-11 was £160 a week, and that has risen considerably, leading to very large bills for housing benefit. That bill has increased from £11 billion in 2000-01 to £21 billion in 2010-11. If we look at other figures to do with the private rented sector, which is where a lot of people have to find their homes now, because we have not built so many social properties, there has been an 86% increase in working families claiming housing benefit. We now have more than 400,000 people receiving housing benefit. What is more worrying is that we have another 10,000 applying for housing benefit in the private rented sector every month. The total number has risen by 37% in three years. We can see why it is important that we find some way in which to support the construction of more homes in our country.

I shall spend a very short time on the area I come from, the north-east of England, where housebuilding numbers have suffered greatly since the financial crisis. They have slightly improved on the latest figures, but again in the north-east it is housing associations and local authorities that have taken up the greater number of starts. That shows a real need for more support for private sector housebuilding.

I have spoken on housing matters in this House for more than 20 years and in that time housing has never been really high up the political agenda. For many years we have not had a Housing Minister sitting around the Cabinet table, which is one reason why housing has been a little bit down the agenda. Instead of having its own department, it has been part of another, now called the Department for Communities and Local Government. In my time in Parliament, that is the fourth name for that department. It is not one of the highest performing departments, yet housing and housing infrastructure is such an important part of what happens in our country and in our economy.

I am very glad that the Government have brought forward this Bill. If there are technical details about why we could not do it before, that is a good reason to have it. We need to do all we can—and personally I want to see greater progress in the number of homes keeping up with the number of people and in building homes that produce less carbon. I give my support to the Bill.