Affordable Housing

Lord Best Excerpts

Thursday 25th October 2018 Lords Chamber

[Lord Best (CB)]

My Lords, I thank the noble lord, Lord Shipley, for initiating this debate and for addressing so ably the many points that the rest of us will not have time to cover today. I declare my interests as on the register, especially my chairing of two commissions. One is the Smith Institute/Nationwide Foundation Affordable Housing Commission, which was launched in this House last week with an extensive programme to seek solutions to the problems of housing shortages and affordability.

At our launch we unveiled the results of a YouGov survey of public opinion. This discovered that two out of three people think there is a national affordable housing crisis. Seven in 10 renters said they would need to win the lottery to buy their own home, and nearly half of the people questioned have faced financial difficulties in the last year because so much of their income has to go on paying the mortgage or the rent. So, thanks to the new Affordable Housing Commission, we now know that the great British public are right behind us in recognising that the housing difficulties faced by nearly everyone under the age of 40 represent a real crisis.

I also chair the Centre for Social Justice Housing Commission, which will publish an important report this weekend; I can give a sneak preview today. The report spells out the huge costs of failing to build new homes for those on the lowest incomes. The collective failure of successive Governments has pushed more families into the private rented sector where they struggle with higher rents. This also means the taxpayer has to pick up a frighteningly escalating housing benefit bill for the growing numbers who simply cannot afford these higher rents. The CSJ is spot on here.

In the couple of minutes I have left, I would like to congratulate the Prime Minister on her exciting, surprise announcement that local authorities will have new freedoms to borrow to build a new generation of council housing. In the year I first came into the world of social housing—1968—councils built half of the 387,000 homes constructed in the UK. In recent years their output has dried up and housing associations, great as they are, have put back less than a third of the lost council output.

In the days of the coalition Government, the noble lord, Lord Shipley, and I took an LGA delegation to discuss this issue with the Chief Secretary to the Treasury. We heard how impossible it was for the Government to lift the embargo on local authorities borrowing to build new homes. This would lead, according to Treasury thinking, to a massive increase in the national debt, frightening off international investment in this country. We pointed out that prudential borrowing for housing—that is, borrowing only what can be repaid from rental income—would not frighten the horses and was recognised internationally as outside the definitions of public spending and national debt. We got nowhere.

Thank you, Prime Minister, for overruling the Treasury at last and opening the door to—according to calculations by the consultancy Savills—at least 15,000 extra homes each year. If local authorities give prominence to rentals that are truly affordable to those with low or no earnings, in mixed-tenure, high-quality developments, then this will indeed be an historic step forward.