Budget Resolutions and Economic Situation
Debate between Baroness Ritchie of Downpatrick and Clive Efford
Clive Efford
Oh God; it’ll be a good one, I know.
I admit that we did not build enough houses. I was here, firmly on the Back Benches, when we were in government, and the lack of house building, particularly social rented housing, was one of the big issues that I argued for, but right at the end we did invest a lot of money in building social housing, and the last Government scrapped it. The only social housing they have built and claimed credit for in the past five years was funded by my right hon. Friend the Member for Wentworth and Dearne when he was Housing Minister. I know that because I was his Parliamentary Private Secretary.
Ms Margaret Ritchie (South Down) (SDLP)
Does my hon. Friend agree that investment in affordable housing, particularly social housing, has a multiplier effect on the economy because it boosts construction and creates jobs in that sector, as well as providing an important stimulus to people who for whatever reasons—mainly economic—cannot provide housing for themselves?
Clive Efford
That is absolutely right; it gets the supply side going as well.
The OBR figures in this booklet show that house prices are due to rise by 34.1% by 2021, so a considerable increase in house prices is still being predicted, but people’s ability to buy housing will only fall further behind. The Resolution Foundation states that 2.2 million households on medium incomes spend one third or more of their disposable income on housing, leaving an average of about £135 a week for other things. If they even attempt to buy their own home, they do not have enough income. The National Housing Federation’s report, “Broken Market, Broken Dreams”, states that the average first-time buyer needs a £30,000 deposit—10 times the amount needed in the 1980s—and to borrow 3.7 times their annual income now compared with just 1.7 times their income in 1979.
Two thirds of home buyers now use the bank of mum and dad. They are getting support from the baby boomer generation—I am one of them: those born between 1946 and 1964. Our generation are sitting on the best pensions any generation has had, the windfall from our house prices and the greatest ever increase in the quality of life—and what has the Budget done? It has protected pensions for that group, who are already wealthy, and allowed them even greater opportunities to pass on their housing to their children, further opening up the divide between those who have houses and those who do not. That is completely and utterly unfair.
Let me turn to the benefit cap. I do not support reducing the benefit cap from £26,000. I will look carefully at the impact assessment that the Government produce to show us that it is justifiable in London—we are going to see a proposal for a £23,000 benefit cap in London. I want to see how that will impact on people in central London, because we are seeing a combination of the cap and the highest-value social housing having to be sold off, as my hon. Friend the Member for Islington North (Jeremy Corbyn) said. We are seeing housing association properties forced to be sold off, and we know that for every 10 houses that are sold, we get only one house to replace them—that is the woefully inadequate record that we have seen in the past.
The expensive houses are going to be in central London. They are the ones that are going to be sold. Even in my constituency—which is an inner-London constituency, albeit towards the outer part of that area, so we do not have the sort of high-value properties we see in places such as Camden, Islington, Kensington and Chelsea, and Hammersmith and Fulham—there will still be high-value houses that must be sold. That will reduce the availability of affordable rented accommodation for people in London. What will happen to those communities? Where will those people go? Where are the opportunities for the next generation? What this Budget is doing is removing whole sections of our communities that perform lower-paid jobs and live in social rented accommodation in large parts of London. Those communities are just being wiped out, and this Budget has moved that forwards in ways that Margaret Thatcher could not even dream about.
I want to turn to the national minimum wage. Based on what I heard from the Chancellor, I think that he has redefined the living wage and claimed it for himself. He has put the minimum wage up to £9, when the living wage is actually £9.15 and £7.85 outside London, not £7.20. Therefore, he has rewritten the living wage to start with, but also the living wage is calculated by including the rate of tax credits, which have just been massively reduced, so if I am not wrong, it will not be a living wage and we have had a little con trick. It was the big end for the Chancellor—“We’ve got a new living wage”—but we have not got a new living wage; we have got a Tory living wage. Again, it will impact on those with high housing costs, particularly in London.