Residential Construction and Housing Supply

Lord Beecham Excerpts

Wednesday 24th April 2019 Lords Chamber

[Lord Beecham (Lab)]

My Lords, I refer to my interests as a local councillor seeking re-election next week and as an honorary vice-president of the Local Government Association. I join other noble Lords in congratulating the Minister and thanking him for giving us the opportunity to discuss this important area of policy, and for his clear interest in it and support for action.

Today’s debate, with its curiously worded title, reflects a long overdue intention on the part of the Government to address a deepening crisis over housing policy. Belatedly, the Government are recognising the need for more new homes, although their target of 300,000 new homes a year embodies a minimal role for local authorities, allowing only the most hard pressed to bid for £1 billion by 2021-22. As I have remarked on a number of occasions, in Newcastle, when I was first elected to the city council, we built 3,000 houses in 1967. The Government’s welcome announcement will provide an estimated 10,000 houses: that is not great when you look at the national need.

Why should councils’ contribution to meeting housing needs be restricted to this extent? Why, contrary to the view of the Treasury Select Committee, do the Government intend to maintain their cap on all other areas? The Government and their coalition predecessor have restricted the use of the proceeds of sales under right to buy such that in the last six years, while £3.5 billion in discounts have been shelled out, councils have been able to retain only one-third of the already reduced proceeds and find it increasingly difficult to provide much-needed social housing. So in 2017-18, of 160,000 new homes built in that year, only 1,730 were built by councils and 27,140 by housing associations. Forty per cent of former council properties are now owned not by the tenants who acquired them but by private landlords who rent them out at higher rates than council rents. What is the Government’s definition of affordability for both rented and newly built, owner-occupied properties? What view do they take of the kind of profits generated by large housebuilders such as Persimmon and the massive payment of £110 million to its chief executive, which is in itself enough to build 100 homes? How do the Government square that with the bedroom tax, which in Newcastle alone costs 3,000 households £2 million a year?

Moreover, why, when the Government have announced additional expenditure of £l billion, has the Treasury published plans to spend only £880,000? What conditions, if any, will they impose on the application of this funding? The Local Government Association points out that in the past five years, local authorities have lost enough properties to house the entire population of Oxford. How many more people do the Government estimate will now be housed by councils in the light of their changing policy?

One area that is proving problematic is the planning system, with departments struggling to find staff. Again according to the Local Government Association, that has given rise to £200 million being paid to subsidise the cost of applications. It is sometimes alleged that the planning system is delaying or obstructing much-needed housing development, but it should be remembered that last year, 90% of applications were approved. In 2016-17, councils gave permission to build more than 321,000 homes, and there are currently 430,000 approved homes waiting to be built, with 90% of applications being approved. The planning system has been criticised tonight—rather unfairly, if I may say so.

A couple of years ago, the Local Government Association found that taxpayers are subsidising the planning process for housebuilding by some £200 million a year. That comes at a time of unprecedented cuts in government funding for local councils, causing serious problems in the delivery of important local services, with this year’s overall funding gap of £3 billion due to rise to £8 billion by 2024-25. Will the Government review the position and allow a further increase in what may be charged for planning applications?

Of course, there are other pressing issues, not least rising figures of homelessness and the decanting of people to distant locations from where they currently live. In addition, we suffer all too frequently problems over housing asylum seekers and refugees without the provision of adequate support. What attempts has the department made to engage the Home Office, whose track record on this issue and the outsourcing required have demonstrably failed too many of these unfortunate people and the communities to which they have been sent?

One burgeoning area of housing development is the massive growth of student accommodation, some purpose-built and some replacing long-term residents of town and city houses and flats. Neither the students nor the developers pay council tax or business rates. The former is understandable, but the latter at least merits consideration. We have a rash of newly built student accommodation in and around Newcastle city centre; again, no business rates or any such rates derive from them. Have the Government given any thought to this issue? If not, will they look at it again?

As the long title of the debate and its many speeches illustrate, there is more to housing policy than numbers, vital though they are. We are well below European standards in terms of the size and energy efficiency of our housing stock—a matter to which I and other Members of your Lordships’ House have referred from time to time in this Chamber, and which has been raised in this debate.

The Grenfell tragedy is a stark reminder of the need to be alert to issues that could lead to major problems. What steps are the Government taking to ensure that the safety of residents is a prime duty of the builders and owners of homes, especially apartment blocks? What steps are they taking to ensure that leaseholders are not made liable to pay for the necessary precautionary steps of replacing vulnerable cladding and ensuring that other safety requirements are met? What assistance will be made available to local authorities to ensure that residents or employees are not left at risk in either private or publicly owned blocks, be they residential or used for other purposes?

Finally in this area, we need to keep under review the role of the private rented sector. Many private landlords live up to their responsibilities but, all too often, others neglect their obligations, fail to ensure that their properties are in good condition or act unlawfully when dealing with their tenants. Will the Government do more to encourage selective licensing of landlords and ensure that legal aid and advice are much more available, given that there are legal aid deserts for housing law problems?

On a more positive sign, I welcome moves to update the building industry in terms of design, especially in the areas relevant to climate change, home safety and, not least, adaptability. In that respect I suppose I declare a potential future interest in the light of people living longer and possibly needing more accommodation of that kind.

We have an issue with housing in this country. It is one that has gone on for a long time. The tone of the Minister’s speech elicited sympathy and support around the Chamber. I hope it marks a significant change in government policy across the whole range of housing issues. After all, we have too many people who are still homeless or still seeking decent permanent and affordable accommodation. We look forward to the Government developing and building on the useful but limited improvements in their policy that have been enunciated tonight. Across the House, we hope to see an increase in the number of affordable, good-quality housing in all tenures. In particular, I would argue—with the support of certainly some Members of your Lordships’ House—that the role of local authorities needs to be enhanced and promoted in achieving those objectives.