Neighbourhood Services: Government Support

Debate between Lord Adonis and Lord Marlesford

Thursday 24th October 2019 Lords Chamber

[Lord Adonis]

The point is the same, my Lords. If we are to tackle this housing crisis, what is needed is a bold new programme led by district councils and lower-tier authorities—because they are housing authorities—of building new council housing. They should work in partnership with housing associations to improve dramatically the stock of social housing and affordable housing, which is a significant part of the social crisis that the country faces.

One of the biggest changes in public policy over the past 40 years has been that the provision of social and affordable housing, which was regarded as a core function of the state until the 1980s, has totally ceased to be. We need to be self-critical in this: I do not think that the Government of which I was a part did nearly enough. We thought that market-based solutions would meet needs for lower-cost housing; they manifestly have not.

I spent, for my sins, a large part of last night reading the third volume of Charles Moore’s biography of Margaret Thatcher, which I recommend to your Lordships—indeed, some of those whom I see here in the House today feature in it. It is an important contribution to political history. One of the most remarkable things about it is that council housing, which used to be one of the biggest political issues in the 1960s and 1970s, does not feature at all in that volume—it covers the years from 1987 to the end of Lady Thatcher’s career—except in one passing reference to council house sales, which was the only council house policy that Margaret Thatcher had in her 11 and a half years in Downing Street.

The facts are now the facts: the average home in England this year costs eight times more to buy than the average salary; the average share of income that young families spend on housing has trebled over the past 50 years; because of the shortage of social and affordable housing, the number of people living in the private rented sector has doubled in the past 20 years, and private renters spend on average 41%—nearly half—of their household income on rent. Surprise, surprise, a majority, 57%, of private renters are now struggling to pay housing costs, and one in three low-earning renters has to borrow money to pay their rent. Some 800,000 people who are renting cannot afford to save even £10 a month; 27% of private renters receive housing benefit or the housing element of universal credit, which is approximately 1.3 million households nationwide. Meanwhile, the Government spend £21 billion a year on housing benefit because of the very high level of rents, which they have jacked up by removing subsidy and not building more social homes. Last year, only 6,463 new social homes were built nationwide. There are about 1.5 million fewer social homes today than there were in 1980.

I do not want to do death by statistics, but I think that your Lordships get the picture. What has essentially happened in the last generation is that we totally stopped building new social homes publicly. Housing associations filled the gap to a very modest extent, but not nearly sufficiently. We have had significant population growth in that time, alongside the cessation of social home building; a substantial proportion of the country cannot get near the affordable housing ladder, let alone buy housing; and we have a private rented sector in which Rachmanite, disgraceful, slum-type conditions are increasingly common, with local authorities having neither the power nor the resources to deal with them.

What should be the policy? It is very clear to me, because to all big questions there is usually a simple and correct answer—there is often a simple and wrong answer, too. The simple and correct answer to this crisis is for local authorities to start building social housing again. They should do this in partnership with housing associations, but they should be the prime movers because they are the public authorities—and they should build social housing at the level at which they did in the 1960s and 1970s, to deal with the chronic housing crisis.

At the moment there is precious little movement towards this. It is true that councils are building houses again in a very modest way, compared to the period from the mid-1980s until a few years ago when they were building none at all. But it is very modest; it is scratching the surface, and we now need a revolution in policy. To give some idea, the London Borough of Lambeth, for which I was looking at the statistics recently, is building fewer than 100 new social homes a year; it needs to build 1,000-plus to deal with this issue. So we need about a tenfold increase in the rate of new building at the moment. To put that in context, in just that one London borough, Lambeth—I am sorry to keep referring to London and the south-east, which may offend the noble Lord, Lord Greaves, but there are big problems there, too—the council house waiting list is 28,000. That is in a London borough that is able to build fewer than 100 new homes a year. We need to move these two figures much, much closer to each other.

The noble Viscount, who always does his best to reply to our debates, will I hope be able to give us some facts, and I would like to put a few questions to him. The situation that we are in now, which I have seen very often in public policy, is that everyone admits there is a problem—I do not think that anyone who follows me in this debate will say that there is not a big problem—but the difficulty that we face is that the policies do not remotely match the scale of the problem that most people have identified. At the moment, the noble Viscount and his party are in government, so this is a charge which faces them as to what they are doing about it. They have accepted that there needs to be new social housebuilding, but they are doing precious little about it.

I have three specific questions about policy. First, if there is to be significant new housebuilding led by local authorities, it can come from only one of two sources: either grant funding from central government and/or the capacity of local authorities themselves to borrow in advance of the receipts that they will get from then renting out the social housing. Of course, it was a combination of the two that produced the scale of council and social housebuilding in the 1960s and 1970s. The Government have introduced two policies in this respect. They have restored some grant funding to local authorities in respect of housing, but the amount is pitifully small and typically provides only for less than one-third of the cost of new social units. So what is the Government’s policy going forward? Are they going to significantly increase grant funding in respect of new social housing provided by local authorities and, if so—since I am told that unless that grant funding is in excess of 50%, it is very difficult to get building at volume—will the Government be prepared to look at increasing the grant funding to 50% of the cost of providing new social housing?

In respect of borrowing, the situation is more urgent. What we are seeing at the moment is a serious regression in policy on the part of the Government. One of the most welcome things that Theresa May did in her time as Prime Minister was announce an end to the borrowing cap in respect of local authorities building new housing. This was a deeply felt restraint on local authorities that had applied for the best part of a generation. Even though they could borrow cheaply from the Public Works Loan Board—which was the way that local authorities borrowed—and were able to service debt from rents to build new social housing, they were banned from undertaking the borrowing. Theresa May lifted that borrowing cap, which was extremely welcome, but earlier this month the Government announced unilaterally, with no consultation—smuggled out in a Statement on one of those many days when there were many other Brexit-related announcements so that almost no one noticed—that the borrowing rate from the Public Works Loan Board was going to be increase overnight from 1.81% to 2.82%.

We should let that sink for a moment: an increase of nearly 50% overnight in the borrowing rate levied on local authorities in the only place that they can borrow— except at the going market rates, which of course would make all of this totally unaffordable. The word on the street, which I put to the noble Viscount so that he can deal with it when he replies, is that the reason this was done is that the Treasury, which never wanted the borrowing cap lifted in the first place, is now trying to sabotage the whole principle of public borrowing by local authorities by massively increasing the interest rate, hoping that no one will notice.

I was, until the Brexit crisis came along, chairing the National Infrastructure Commission, so I know only too well how the Treasury works in these matters. That interpretation of what is happening seems to me to be extremely plausible. Can the noble Viscount tell the House why the borrowing rate from the Public Works Loan Board for local authorities wanting to borrow to build new housing has been increased from 1.81% to 2.82%? Is this a fixed policy? Finally, because I am always trying to be constructive—and I know the noble Viscount is, too—will he consider reviewing that policy? Will he meet me and other noble Lords who are concerned about this issue to discuss public borrowing by local authorities to build new social housing and how it can be done on an affordable basis?

[Lord Marlesford (Con)]

Is the noble Lord satisfied that there is space in Lambeth to provide housing for 28,000 more people? It is all very well to say that we have to provide housing for people who need it, but if you are talking about a particular area they want to live in, there has to be the space for the housing.

[Lord Adonis]

Yes, I am satisfied, and I would be very glad to do a walking tour of the London Borough of Lambeth to explain to the noble Lord how it can be done, starting with the huge issue of the redevelopment of Waterloo station. It desperately needs redeveloping; Waterloo is the biggest terminus in Europe and if it were redeveloped it could provide huge opportunities for new social housing. If the noble Lord is up for it, we will do it and we will work out how we can provide that housing—and I would like the Minister to come along, too, because then something might actually happen.

Growth and Infrastructure Bill

Debate between Lord Adonis and Lord Marlesford

Tuesday 12th March 2013 Lords Chamber

[Lord Marlesford]

In supporting this amendment, I underline that we are talking not only about national parks but specifically about areas of outstanding natural beauty. Perhaps I could remind your Lordships that one is not more important than the other in the hierarchy of beauty. The difference between national parks and AONBs is that national parks are wilderness areas, which AONBs are not; they are very often highly cultivated and farmed areas.

I remind your Lordships once again of a phrase that was used and which is central to the whole issue in its broadest context. It is a phrase that was used by Nicholas Ridley while ex cathedra, as one of the best Environment Secretaries there has been since that government department was created. He stated the importance of protecting the countryside for its own sake. That really embraces it, whether the new broadband is being put into a national park, an AONB, a special landscape area or anywhere where there would be or could be gratuitous damage to a precious landscape.

[Lord Adonis]

My Lords, first, I reinforce the point made by the noble Lord, Lord Tyler, about the importance of seeing that there is a proper communications infrastructure for the national parks, including superfast broadband. He said there were many SMEs. I have been struck by quite how many there are. According to the information that has been supplied to us, there are 22,000 businesses in the national parks, of which over 70% are SMEs. In areas of outstanding natural beauty, there are more than 61,000 businesses, of which 74% are SMEs. There are also 153,000 homes in national parks and over 467,000 in areas of outstanding natural beauty. We are therefore wrestling here with the need to get the balance right. All these businesses and residents want to see modern communications infrastructure, but they want it installed in the most sensitive way possible after proper processes of consultation and collaboration locally. That is what we are seeking to get right.

We have been talking a lot about processes, and a key question is what is going to happen in the rollout of this infrastructure, a point made by the noble Lord, Lord Marlesford. It is clear that big choices will have to be made about how much undergrounding takes place when it comes to overhead wires. That will be a critical issue as this infrastructure is rolled out. There are real causes for concern. It is hard to predict quite what will happen after this legislation is passed and plans come forward. The impact assessment that followed DCMS’s consultation referred to possibly 1,600 kilometres of new overhead wire lines in protected landscapes over the five-year period for which the changes apply. However, it is impossible to gain an accurate understanding of the impact because the document quotes two different figures for the expected annual increase in overhead lines.

However, the Campaign for National Parks points out that there is a good deal of discretion when this work is being planned as to how much is undergrounded. The relevant regulatory bodies make allowances in the control periods for the amounts that can be spent on undergrounding overhead electricity lines. This also applies to decisions that BT will take about undergrounding other telecommunications lines. The sums of money involved are very large. The Campaign for National Parks also points out:

“Given the resources … now being put into undergrounding power lines, it would be more cost-effective to plan for broadband delivery in protected areas in a way that reduces the visual impacts from the outset, even if this results in higher costs initially. Installing broadband infrastructure as quickly and cheaply as possible would be a false economy and a waste of consumers’ and taxpayers’ money if further funding has to be generated at a later date to put these lines underground”.

The national parks make the very sound point there that to go headlong into the cheapest possible means of installing infrastructure only to have to replace it in due course because of a public outcry as a result of the failure to underground where it is needed to protect and enhance the landscape, would be a false economy. Let us be clear about that. Not to plan properly for this and then to have to come back a second time and spend a very large amount of taxpayers’ money in undergrounding lines because it was not planned properly the first time around would be a false economy. We are not very good in this country at planning infrastructure in such a way that we do not have to go back and do it a second time because we did not plan it properly the first time around.

I hope that the noble Baroness, in her concluding remarks, will recognise the problem that we face here: the obvious need to get infrastructure to those in national parks who require it for their livelihoods, but not to do so in a way that will only require us to go back and do it all a second time because we did not get it right the first time.