New Housing Supply
Debate between Lord Foster of Bath and Clive Betts
Mr Clive Betts (Sheffield South East) (Lab)
It is with pleasure that I speak to the report produced by the Communities and Local Government Committee, “Financing of new housing supply”, which we published last May and to which the Government responded in July. Today provides an opportunity to consider the report’s recommendations and the Government’s response to them. I hope their response today will be more enthusiastic than the written response they gave in July. A new Minister, the Under-Secretary of State for Communities and Local Government, the right hon. Member for Bath (Mr Foster), is now in place, so he might manage to achieve that. We can also consider certain things that have happened since the report was produced about 10 months ago, and see how they may have changed our recommendations or, indeed, strengthened their case.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
If it is of assistance to the Chair of the Committee, I am prepared, in the light of developments over the past 12 months, to place an update of the Department’s response to its report in the Library of the House of Commons later today.
Mr Betts
I thank the Minister for that and we look forward with anticipation to reading what he has to say. We will do so closely, and the Committee might give it further consideration.
The report, which was signed up to by all members of the Committee on a cross-party basis, tried to consider the issues in the longer term. I am pleased to see in the Chamber several members of the Committee, both past and present, whom I hope will be able to catch your eye, Mr Deputy Speaker.
We started off from the basic position that we have not been building enough homes in this country for a long time. The basic requirement is about 250,000 homes a year, based on household formation, plus an increasing number to make up for the backlog of past under-investment. Since the report was published, we have had the figures for housing starts in 2012. There were 115,620 housing completions, up 1% on the previous year, and 98,280 housing starts, an 11% reduction. Therefore, if our recommendations were correct a year ago, they are probably just as correct now.
This is not a short-term problem. The report acknowledges that even at the height of building in the mid-2000s, we were building a maximum of only 170,000 homes a year, which was not sufficient, either. The private house-building industry has never managed to build more than 150,000 homes a year, so the likelihood of being able to rely on it to deliver the extra homes is probably very small indeed.
We also know that historically, the percentage of owner-occupied properties has been falling since about 2002. That represents a change. The number of private rented properties has been rising considerably and is now slightly greater than the number of social rented properties.
We can also see the consequences of the failures over a long period and of the immediate problems of 2008 and beyond, including young people in particular being unable to afford a mortgage and increasing waiting lists for social housing. People with heart-rending stories who ought to be given a house immediately visit our surgeries every week, but they cannot all have priority because there are not enough homes to go round. Rents in the private sector are also rising. I will not say too much about the private rented sector today, because we are in the middle of a further inquiry into it and what we should do. We look forward to having Ministers before us at the end of that inquiry.
While we were conducting the inquiry into new housing supply, the Government produced their housing strategy for England. It contained measures that everyone could support, such as the release of public sector land. It also included the NewBuy scheme, on which we were promised an update after 12 months. I am not sure how much there is to update us on, but the Minister may be able to give us a few figures.
The Committee concluded that we needed a long-term strategy. There is an issue with homes, but there is also the immediate issue of jobs and growth. The National Housing Federation gave us the interesting figures that every affordable home built in this country provides £108,000 in added value to the economy and creates 2.3 jobs. We should bear that in mind. We also concluded that we needed radical changes. Members of the Committee recognised that we needed to be brave and think outside the box in coming to our conclusions.
We made a number of proposals because we recognised that there was no silver bullet, magic solution or switch that could be flicked in Whitehall that would make everything okay the following day.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
It is a great pleasure, as ever, to follow the hon. Member for Birmingham, Erdington (Jack Dromey). I always enjoy hearing his housing speech. Indeed, I heard it only on Friday, when we were together in Bristol. As ever, he makes some interesting and useful points, as did a number of those on the Opposition Benches. If I do not have an opportunity to respond to all the points that hon. Members on both sides of the House have raised, I will write to them.
The hon. Member for Lewisham East (Heidi Alexander) made some very helpful remarks about the need to look at the bundling of land together. I will of course look into the discussions that we have or have not had with the Department of Health in relation to the land to which she refers. Although from time to time I am critical of much of what the right hon. Member for Greenwich and Woolwich (Mr Raynsford) says, I was delighted to hear him make a robust argument for the great value of further improvements in the energy efficiency of our buildings. Although the hon. Member for Hammersmith (Mr Slaughter), who is no longer in his place, was very critical of right to buy, he raised a number of points that the Government would do well to attend to.
Above all, I pay tribute to the excellent Chairman of the Communities and Local Government Committee, the hon. Member for Sheffield South East (Mr Betts), who opened the debate with what my hon. Friend the Member for Meon Valley (George Hollingbery) described as an eloquent contribution. Indeed it was. It was eloquent in giving just praise to the report that the Select Committee produced more than a year ago. As I said to the hon. Gentleman in an intervention, in the light of the fact that a year has passed since that report, I have made available in the Library an updated response from the Government, which I hope he and members of the Committee will consider and, if necessary, quiz us on further.
As the hon. Member for Sheffield South East said, it is important that we acknowledge, as the hon. Member for Birmingham, Erdington did, that the Government have done a number of things that are supported in all parts of the House. Reference was made, for example, to the reform of the housing revenue account and to the greater flexibility given to the many excellent arm’s length management organisations. The Chairman of the Select Committee even praised the Planning Minister for his willingness to accept the need for an agreed methodology for determining housing need. The hon. Gentleman will be aware that this is being addressed by Lord Taylor in his report, which we hope will be available in the summer.
The Chairman of the Select Committee pointed out that the Montague report said that guarantees distort the market. May I tactfully suggest that the Montague report was referring in that instance to rent guarantees? If he reads the report thoroughly, as I am sure he has, he will know that it strongly supports the guarantees to reduce the cost of borrowing, which is part of the Government’s package.
On that point, the right hon. Member for Greenwich and Woolwich asked what has happened to the £10 billion loan guarantee and where it is. He will be well aware that it takes time to work through the details and to put an offer to the market. We have done all that and I am delighted to tell him that we will make a detailed announcement next month about the appointment of people to run it, so progress is being made. He also challenges us about shovel-ready projects, which he is clearly concerned about. As he knows, because he looks at these matters in great detail, the Get Britain Building fund of £570 million has already signed contracts with 120 projects that will provide us with no fewer than 8,600 homes, and more are on the way. Under this coalition Government, shovels are in the ground. We are delighted that more is still to come.
Like all Members who spoke in the debate, we believe strongly in the importance of building more houses, both to meet the housing need and because of the real economic benefit that that can bring. We agree with so many speakers on all sides who said that there is no single silver bullet to tackle the long-standing under-supply of housing. The Government cannot do it alone and we need to work with others.
The report recognised that a basket of measures is needed, covering all tenures of housing, and we are taking action to deliver that basket of measures: the spending review, the Localism Act 2011, the 2011 housing strategy, the housing and growth package and the autumn statement. But as so many hon. Members have said, a new Budget and a new spending round is due shortly, when I have no doubt that further announcements on housing will be made. I was not meant to say more than that, but my hon. Friend the Member for Meon Valley helped to further the leaks that have appeared in newspapers today on what might be covered. We will just have to wait and see what is around the corner. As the Chair of the Select Committee, the hon. Member for Birmingham, Erdington and others on both sides of the House have said, it is important to recognise that more still needs to be done to take a comprehensive approach, making best use of existing stock, unlocking stalled sites and stimulating new housing supply across all tenures.
I remind my hon. Friends the Members for Meon Valley and for Peterborough (Mr Jackson), who raised the issue of ensuring that within all forms of tenure we take account of older people, that we now have the care and support specialist housing fund of £300 million specifically to develop specialised housing for older and disabled adults.
All Members who have spoken agree that we need more housing, but agree that the politics at the local level can often be difficult. That is why I said that the first thing that we have to do is ensure that we make the best use of the built environment that we already have. That means, for example, tackling empty homes, providing for the change of use from commercial to residential referred to by a number of my hon. Friends, and, as has been debated a number of times in the Chamber, tackling under-occupancy and affordable housing. The new homes bonus gives local authorities not only reward for new homes, but also for bringing empty properties back into use. It is a powerful incentive that is really working. From next month, local authorities will have further flexibility to remove or reduce council tax discounts on empty homes, and in some cases where they have been empty for more than two years, to charge even higher rates.
We have £235 million of direct funding to help local groups to tackle some of the most problematic empty homes that would not otherwise come back into use. I was grateful to my hon. Friend the Member for Folkestone and Hythe (Damian Collins), who spoke about the need specifically to address properties above shops in our high streets, and he will be aware that we are seeking to do that. There will always be a number of homes that are unoccupied for a short period, and we obviously need that for the market to operate, but the House will be pleased to know that the latest data show that only 260,000 have been empty for longer than six months. That is still far too many, but the figure is now 20,000 fewer than last year, so we are making progress.
We are also taking action to free up land. It was rightly said that Governments of all shapes and sizes have long argued for the need to free public sector land. We are determined to take action on that. We hope to release sufficient land for 100,000 homes, and wherever possible we will use the bill now, pay later deferred payment scheme to help get that under way, but a further announcement may or may not be made in a few weeks’ time. I was grateful to the Chair of the Select Committee who said, in relation to those issues, that local authorities do in some cases need to be quicker with their planning applications, and he will be aware that we are dealing with that in the Growth and Infrastructure Bill. We are also consulting on a package of measures that I think will be welcomed on both sides of the House to make the planning appeals process swifter and more transparent to reduce wasted time and expense and, I hope, lead to quicker development.
The Growth and Infrastructure Bill, which was referred to only briefly in the debate, is very important because it will allow developers to review with their local authorities the viability of the affordable housing contribution on proposed sites. As the House will know, we are committed to a further £225 million, and to the loan guarantee scheme, to ensure that we can meet any reduction in the number of affordable houses that might result from those renegotiations. In addition, we have the £475 million local infrastructure fund—we published its prospectus only a few days ago—which will help local areas to deliver much larger-scale developments to meet need. We want to go still further. The House will be aware that there has not been a single new development of more than 13,500 homes in this country since the 1970s, so we intend to promote and support larger scale garden cities where there is clear local support and private sector appetite. We are currently working through the details on that.
As my hon. Friend the Member for Rugby (Mark Pawsey) rightly said, we must support home ownership, and we are doing that with a number of measures. Reference has been made to the Firstbuy scheme. Over 10,000 reservations have now been made towards our target of helping 27,000 first-time buyers into shared equity. Reference has also been made to the NewBuy scheme, which gives prospective buyers the chance to buy a home with a fraction of the deposit normally required. As we have heard, there are already 3,000 reservations and the figure is rising rapidly. As he also said, the Bank of England is crediting our £50 billion funding for lending scheme for increasing mortgage availability and driving down the cost of loans for home owners.
However, I accept the point made by the right hon. Member for Greenwich and Woolwich about the need to look at additions to the offers that are made, either developments of existing ones or additions to the products available, and that is what we are doing. We are also looking at the issues that many Members have raised in relation to the right to buy, but it is pleasing to note that sales between October and December topped 2,000, helping to fund the one-for-one replacement of the homes that have been sold.
Mr Betts
I will be brief, because the Minister need give only a one-word answer. Is he prepared to look again at the cap on borrowing to fund housing at local authority level? Why is housing the only form of borrowing that local authorities cannot enter into simply because of the prudential rules?
European Regional Development Fund
Debate between Lord Foster of Bath and Clive Betts(11 years, 9 months ago)
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Mr Foster
In simple terms, I am very happy to give that assurance.
I am delighted to have this debate because there is a good-news story to tell about how we are making use of European funds, particularly ERDF money. All hon. Members present know that, with the European social fund, ERDF is one of the two European structural funds aimed at reducing disparities between and within member states. I want to say a little about the past as that has been touched on, a little about the present and, as questions have been asked about it, a little about the future.
All hon. Members present know that ERDF funding is an important part of our growth agenda, and during the current 2007 to 2013 funding period—hon. Members are aware that we are dealing with calendar years—it represents some £2.7 billion in England.
As the report focuses on England, it is only to England that I am referring; responsibility for the use of those funds in the devolved Administrations is not subject to our deliberations today. The funding represents £2.7 billion in England, which is matched with equivalent funding from other sources, and that is delivering jobs and businesses right across England.
Since the 1994 programme began, England has received some £8 billion from the ERDF over the three programme periods that have occurred, up to the end of this year. That has supported growth in a variety of different ways, creating jobs and supporting businesses. Just to give a flavour, the 2000 to 2006 programme supported more than 6,800 projects, created nearly 180,000 new jobs and helped more than 200,000 small and medium-sized enterprises. That is a serious contribution to growth by any standards.
A whole range of different projects have been supported. Some are large and high-profile, such as the very well known Eden Project in Cornwall and the Manchester Metrolink. Others have been much smaller and focused on the needs of communities, such as a project in Leicestershire that coaches women to help them become entrepreneurs. The ERDF has supported innovation, such as through a project in Cambridgeshire, which uses hemp to create lightweight components for industry. I could give many other examples that illustrate the different ways in which the ERDF contributes to growth.
The Government’s first priority when they came into office was to sort out some of the financial liabilities that had been left by the previous Administration. Poor management had led to a situation in which auditors from the European Union were basically imposing financial corrections on England—on our Government—totalling some £236 million for the 2000 to 2006 programme. That quarter of a billion pounds would have to have been met by the taxpayer. However, because of the excellent work done within my Department, we have now got that figure down from £236 million to just £14 million, and we are working to try and resolve that small amount as well.
So far, the 2007 to 2013 programme has delivered more than 42,000 new jobs and more than 11,800 new businesses. It is absolutely on track to achieve the target of creating more than 135,000 new jobs by the end of the period. The period of the funding stops in 2013, but the programme rolls on to 2015, by which time the money has to have been spent. The programme has already contracted with projects to deliver more than 31,000 new businesses, which is twice the number set at the beginning, in 2006.
As the hon. Member for Sheffield South East (Mr Betts) —the Chairman of the Select Committee—rightly pointed out, we brought the management of the fund into the Department following the abolition of the regional development agencies. We introduced standardised management systems to ensure that the same procedures were followed right across England, so that we can track our liabilities much more accurately than in the past. That has resulted in some efficiencies in the resources that the Department uses to administer the programme, and ensures that the risks of ineligible expenditure are reduced. I hope that that answers the question asked by the hon. Member for Derby North (Chris Williamson). We are leaner, but fitter, and we are more efficient in delivering good value.
As the Chairman of the Committee will well remember, when the European Commission gave evidence to the Select Committee last year, it was asked how we had managed the transfer from the RDAs to the Department. As the hon. Gentleman acknowledged, the European Commission said that it had been “well managed” and considered that we had done a good job in handling the transition. I was delighted that the hon. Gentleman confirmed that, but as he said, it is not all perfect. There are concerns in some parts of the country. He gave the west midlands as an example, so I can help him by giving the most up-to-date figures—I know that he always likes to be kept up to date.
The situation in the west midlands is that we have now contracted £254 million of the allocated funding of £328 million, leaving £74 million to be contracted. So far, we have created 7,404 jobs, and we are contracted to deliver 17,704, despite the target having been only 11,550. From that information, I hope that the Committee Chairman gets the clear indication that we are confident that the west midlands is now very much on track—not only to deliver, but to deliver more than was originally targeted.
Mr Betts
I think that that was a reassurance from the Minister, but I got the point that £74 million was still not contractually committed, and presumably there are similar figures for other regions. Does the Minister have a total figure for money that is not contracted, and if it is all right in every region, why are civil servants ringing round, saying, “Can you deal with underspends from other regions?”
Mr Foster
Let me answer the hon. Gentleman’s question and another one. He also asked, “Would it not make sense to slightly overplan, in case there is some slippage?” In terms of the £74 million, I can tell him that negotiations are under way for some £83 million of contracts, so we are well on the way to using up the money and getting the match funding, which he is concerned about. However, because he has recommended it to us, and it is on his advice, we are going slightly over the top to allow for the slippage that he thinks might occur.
I hope that the hon. Gentleman will commend us for what we are doing. If he asks me whether I have got the information for all the other regions, the answer is yes. He can take his pick, and I will happily give him the answer for each and every one of them to demonstrate that, in every part of the country, we are now on target to deliver what we are committed to—and in many cases, to deliver more than we were originally expecting to achieve.
Mr Foster
I am more than happy to take account of the hon. Gentleman’s request. I will not make an absolute commitment immediately, because it may be more helpful, on advice, to defer doing so until we are further along in some of the pipeline negotiations that are well under way. In broad principle, however, I have no objection to making the information available, but I hope that he will allow me to consider the most efficient time to do so—for his benefit, as well as that of his Committee and all Members.
Mr Foster
The hon. Gentleman is getting a little uptight about something that is very simple. I hope that he would agree that I am taking a responsible position: I am saying that I am more than happy to make the information available, and I am merely adding that I will seek advice on the most propitious time to do so. New data that will give us a clearer picture may be expected tomorrow. That is all I am saying. I will make the information available as soon as possible.
Mr Betts
I thank the Minister for what in almost all respects was a very positive response to the Select Committee’s report. First, I thank him for his commitment to send to the Committee the results of the evaluation of ERDF spending, which he has already contracted to do. That will be most welcome when we get it. It is a difficult task, as we appreciated in our report, but it should be worth while, to enable spending in future rounds to be even better targeted, so we welcome that completely.
Secondly, on transitional regions, the Committee thinks that the Government were simply wrong in their initial objections, but I am pleased to hear the Minister say that transitional regions will be there for the next spending round and that the Government will fully commit to ensuring that the money is properly spent in those regions, with the full engagement, asked for by my right hon. Friend the Member for Wentworth and Dearne (John Healey), of the LEPs and local authorities in those regions. That is most welcome.
The Minister offered reassurance about the Government’s commitment to ensure that all the ERDF money was fully spent. Again, that is welcome, although the Minister did act as a bit of a tease. He was saying, “I’ve got all this information here. You can have any bit that you want. Just ask for it.” I then asked for it all and was told that it might come in due course when the time was right and subject to the advice of those who advise him. Well, yes, okay, we will have to leave it at that for this afternoon, but we look forward to receiving the information in the Committee and in the Library at an early date, so that we can be reassured on those matters.
I still think that some projects with the best chance of delivering value might not go ahead because of the non-availability of match funding. The Government must address that problem; we have not got to the bottom of it this afternoon.
I have two final points. We welcomed in our report the pooling of the spending pots. The Government are clearly seized of the importance of that. Using the LEPs as building blocks is very welcome. That relates to my right hon. Friend’s point about the Heseltine report. I would warmly welcome such funding or funding through the Heseltine measures being further devolved to local areas, for the LEPs and local authorities to build on, together with European and city deal money, and we might eventually move to the idea of community budgets as well. I think that the Select Committee will look at those issues.
Mr Foster
I apologise that I did not pick up the point about the Heseltine report. I am sure that the hon. Gentleman will understand that, with a Budget to come in the very near future, I can only give him an assurance that that issue will be addressed at that time, when an announcement will be made. I clearly cannot say anything more about that at this stage.
Mr Betts
Again, that sounds like a helpful response, but we will wait and see. We will start to see a different landscape of European funding decisions being made flexibly, together with other pots of money, to make a real impact locally. That is a move forward that can be welcomed.
Finally, on repatriation, I am not sure where the penalties came in. It certainly was not an issue that the Government raised with us. However, it is an issue for the future. It seemed to the whole Committee to be a sensible suggestion. I hear from the Minister that, in principle, it has not been ruled out. It will be looked at in future in terms of relationships between the UK and the European Union. That is to be welcomed as well.
I thank the Minister for his response. We will await further information from him and await the reports of the review, and we might return to the issue in the Select Committee in due course.
Building Regulations (Electricity and Gas)
Debate between Lord Foster of Bath and Clive Betts(12 years, 3 months ago)
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Mr Foster
The right hon. Gentleman knows me extraordinarily well, and he has also occupied the same position as me. He knows that there is no possibility whatever, having spent a long time coming to a form of words that I can give him, that I will, on the hoof, change them. None the less, I am grateful to him for his suggestion. Perhaps, on a future occasion, I may end up uttering the very words that he has sought to put into my mouth, but, at this stage, he has not yet succeeded.
Mr Foster
I fear that the Chairman of the Select Committee is pushing me as hard as he might, but I will go to this stage and no further. If it gives him any comfort, I do genuinely understand the point that he has made.
Making the public and home owners aware of electrical safety and their own liabilities is crucial. We have already agreed with the Committee in its report in June that new conditions of authorisation, which will require scheme operators to promote and publicise the benefits of competent person schemes, will be put in place. We are also looking at other ways in which we can go further. We see considerable merit in the scheme providers working in partnership with retailers, manufacturers and one another. We will look into that and ensure that the measures that they take to promote the schemes are as effective as possible. However, I am not convinced at this stage that further legislation is required for such things as the labelling of electrical products.
The hon. Member for City of Durham asked me whether, if there was clear evidence that a voluntary code was not satisfactory, we would be prepared to consider an alternative route. The answer is yes, but there is a long way to go before we have such evidence. I hope that the industry and all its relevant parts will come together to work effectively on those issues.