Economy: The Growth Plan 2022

Lord Horam Excerpts

Monday 10th October 2022 Lords Chamber

[Lord Horam (Con)]

My Lords, I first congratulate my noble friend Lady Neville-Rolfe on her elevation to the Government. We have fought many battles together in the past and I know how effective she will be.

The Chancellor has said that he wants to focus on growth and believes that cutting taxes is the way to achieve this. In support of this assertion, he points out that taxes in the UK are at their highest level for 70 years. That is indeed the case—but if one takes a wider view, the picture changes. In the UK, tax is 35% of GDP; in the eurozone, it is not 35% but 41%—significantly higher. Logically, therefore, if the Chancellor is right, Britain ought to have been growing faster than the eurozone countries for the last decade or so. It has not; we have grown at roughly the same rate as the eurozone countries. Also, speaking personally as an economist who has founded a very successful business, it is not my experience that the sort of tax change that he is proposing makes much difference to the level of entrepreneurship and growth. What businessmen want more than anything else is steadfastness and certainty.

There is also a big downside to cutting taxes. If you do it the wrong way—as the Government clearly did on this occasion—you get a reaction from the market that increases interest rates and mortgage rates and you take away far more than you have given in the income tax cuts. Moreover, once you get talking about tax cuts, you inevitably eventually talk about spending cuts. Now we are talking about possibly no indexation of benefits. That is absolutely wrong. There is a problem of absolute poverty in this country—as the right reverend Prelate the Bishop of Durham pointed out very eloquently—and we simply cannot make the people who are already poor even poorer. That is totally morally wrong. Also, if you cut taxes, the Government have less revenue, so how do we finance the extra spending on the NHS, social care, defence and security, the skills agenda, public expenditure, public infrastructure and all the rest?

Given the very excellent government proposals on the energy price guarantee, there was actually no need to have a Budget. If the Chancellor had been wiser, he would have postponed it until he could see what ensued and how clear the picture was. But he went rushing in and came a cropper. That is the situation that we are now in and the only way out of it is for the Government and the Chancellor to listen, learn and show some political common sense. I am glad to say that has begun. I entirely welcome the decision to bring forward the review by the Office for Budget Responsibility to 31 October; we will need more measures of that kind, and the sooner the better.

Office for Demographic Change Bill [HL]

Lord Horam Excerpts

2nd reading
Friday 4th March 2022 Lords Chamber

[Lord Horam (Con)]

My Lords, one reason I support my noble friend Lord Hodgson’s Bill is that it will encourage long-term thinking. He mentioned in his opening remarks “long-tail issues”, which is a common phrase in the insurance industry. In the epic contest between our western-style democracies and dictatorships, which we see playing out in the world, democracies are often said to suffer an inability to think long term, because of the frequency of general elections. They always look at short-term fixes for solutions. I believe this sort of agency could promote a more balanced approach, with more attention to longer-term issues that have a fundamental effect on quality of life in this country.

The second reason I support the Bill is that it will encourage us to look at the environmental, ecological and social factors, as well as the purely economic. I say that as an economist myself. As my noble friend Lord Hodgson said, life is not all about increasing gross domestic product and I fully concur.

Ministers have said in the past when discussing this issue that this proposal is covered by the activities of the Migration Advisory Committee. However, if you look at the members of that committee, you see that they are almost exclusively labour market economists. They look at skill factors—whether we have a shortage of lorry drivers, people with digital skills or care workers—and are not concerned with wider issues such as the beauty of our countryside, the space that we occupy and the ecological effects of population growth. So it is not an appropriate body to look at these issues, even though the Government have said in the past that it is. I have also talked to Professor Bell, chairman of the Migration Advisory Committee, who agrees that the remit is quite specific and limited.

My third reason for supporting the Bill is that we are a small country. Bill Bryson called his delightful travelogue of Britain Notes from a Small Island. When the Americans came over here in the Second World War, they had a briefing from their staff that said, “England—think South Carolina. It’s the same size.” Even today, South Carolina only has 10 million people. We have five or six times that number in England. If you look around the world, there are only four countries of a similar geographical size to our own that have a greater population: Taiwan, South Korea, Rwanda and Bangladesh.

In those circumstances, we must look very carefully at how we use land. I noted that when the present Prime Minister was still a journalist for the Daily Telegraph, he wrote in an article on 25 October 2007:

“It is time that we had a grown-up discussion about the optimum quantity of human beings in this country, and on the planet. Do we really want the south-east of England, already the most densely populated country in Europe, to resemble a giant suburbia?”


“Hear, hear,” I say. We do not want that to happen, and we must work out policies which prevent it.

I will make one final suggestion to the Minister on this subject. The Prime Minister has tasked Mr Rees-Mogg in the other Chamber to come up with some ideas about the benefits of Brexit. I voted remain in the referendum but, none the less, I would like to see some of the benefits of Brexit brought forward. Might I suggest that building up an office for demographic change could feed into that, by essentially looking forward and giving a bit of vision to the whole area where this country is going, post Brexit? As Harry Perkins, the hero of former Labour MP Chris Mullin’s excellent novel, A Very British Coup, said, “We politicians spend a great deal of time looking at the ground. Just occasionally, we should gaze at the stars.” I think my noble friend is gazing at the stars here in a very illustrative and visionary way, and I agree with his Bill.

Budget Statement

Lord Horam Excerpts

Wednesday 3rd November 2021 Grand Committee

[Lord Horam (Con)]

My Lords, the noble Lord, Lord Rooker, was absolutely right in his reference to the Rooker-Wise amendment in 1977. I remember it all too well, though I think that he fairly acknowledged that he and the late Audrey Wise only got it through with the help of the Opposition Treasury spokesman, then one Nigel Lawson, now my noble friend Lord Lawson.

Indeed, it is the case that there is no such luck today: no indexation of that kind has been made possible by the Government. I understand why and I think that the noble Lord may well understand why as well. The fact is that Britain has, for too long, been trying to get European levels of public service and welfare at US levels of taxation. The crunch has now come. The Government have given clear indication that they prioritise maintaining, and if possible improving, public services and are therefore prepared to put up taxation to the same extent.

That is fundamentally right, because of the point that the noble Lord, Lord Turnbull, has just made. He said that, at one time, he thought that as people got richer they would spend more of that money in their own private way. Indeed, the opposite is now happening, as he pointed out. As we get richer, we need more of the services that the public sector mainly provides: education, health, care, addressing issues such as climate change, as well as levelling up—particularly from this Government.

I certainly support the levelling-up agenda. I particularly admire what the Germans are doing for some of their towns such as Dresden, Weimar and Erfurt, which were knocked about a bit during the Second World War and then went through the GDR period. However, it costs money to do that. If we are going to do the same sorts of things for our northern towns, we will need to spend a lot of money to make those improvements.

That sort of improvement for the north and the midlands, the so-called levelling-up agenda, is also good for the south. As Boris Johnson, when he was a journalist—and he was Mayor of London before he became Prime Minister—said, do we really want the south of England to be endless suburbia from Charing Cross down to the south coast? No, we do not. If there is better balance in the country, that is good news for both ends of the country.

That means that taxation has had to rise. As has been endlessly pointed out since it happened, tax as a percentage of GDP is now going to be 36.2% at the end of this Parliament as opposed to 33.3% of GDP today. As my noble friend Lord Lamont pointed out, looking at it that way is purely insular. Look at what has happened across Europe: today, by comparison with our 33.3%, the average in Europe is 41%—hugely higher. In Germany it is 37.5%, in the Netherlands 39%, in Belgium 44% and in France, amazingly, 46%. Compare that with our 33%.

Some people will argue that, if you go to a higher level of taxation, you will adversely affect growth. Is that the case? There is no evidence for it. Growth rates across Europe over the last few years are almost identical between France, Germany and us; there is very little difference at all. There is therefore no evidence that a higher tax rate, within the sort of limits that we are talking about, necessarily adversely affects the rate of growth. In fact, to bring together—maybe to their surprise —my noble friend Lady Noakes and the noble Lord, Lord Eatwell, a factor that is important is the way in which you use the money that you have raised. That is crucial.

Despite what I have just said about the link between taxation and growth, I agree with the noble Lord, Lord Fox, that this is going to be a difficult year. As Paul Johnson from the Institute for Fiscal Studies, perhaps the best and most respected commentator on these matters—I always read him first, anyway—has pointed out, living standards are going to be hit by the increase in inflation for all sorts of reasons, including Brexit, Covid and energy prices, so we are going to have a difficult year. The Chancellor has sensibly opted to hold back some of the money that he could otherwise have spent or saved for use in this period. He therefore has some firepower to deal with any faltering of growth that may occur.

One area where I would be critical is that I do not think that we should have scrapped the £20 uplift in universal credit. I appreciate that the Chancellor has put in a taper, but only 38% of people who receive universal credit are in work. The remainder are out of work and they will lose substantially. The Treasury has said that it would cost a lot to keep the £20 uplift, but the fact is that the poor in this country are very poor and they face a bleak winter. I refer to the excellent speech by the right reverend Prelate the Bishop of Newcastle, in which she referred to the moral code. Archbishop Temple, while not putting in place any particular solutions because of his reluctance to get involved in the technicalities of how we deal with these things, referred to a moral code and, because of that, I think that he would have looked askance at the Government’s failure to keep the £20 extra for universal credit. It is a pity that they have done that; as a rich nation, we could and should have afforded it.

With that blemish, though, I none the less think that the Government’s overall strategy of meeting the extra spending that is necessary, and which will inevitably be followed by extra taxation, has been broadly right.

Budget Statement

Lord Horam Excerpts

Friday 12th March 2021 Lords Chamber

[Lord Horam (Con)]

I, too, warmly welcome our five new noble Lords. I was lucky enough to read economics at Cambridge in the late 1950s, when the influence of the late and great economist John Maynard Keynes and his followers was very high. I have always taken the view thereafter that the first rule of economics is, in all circumstances, to maximise real economic growth. As a politician, the second rule that I have always advocated—I think that Keynes would also have agreed with this—is to make the distribution of the rewards of growth as fair as practically possible. I therefore support the Budget because it has made some real progress in both these areas.

In particular, it began to deliver on the levelling-up agenda. The brutal truth is that several regions of the United Kingdom have now been overtaken in GDP per head by countries such as Slovenia, Poland and Lithuania, which spent decades under the rule of communism. Some people worry about the huge debt that we have piled up to achieve these ends; I do not. Currently, the public debt is about 100% of our annual GDP. If you look over the long history of the UK, that is not far from the average. Nor is there a big problem with financing it while we have an independent Bank of England, which can, in the end, just print the money. The only factor to keep a beady eye on, as the noble Lord, Lord Eatwell, pointed out, is inflation. That is certainly a threat.

My only doubt about the Budget is over the proposed rise in corporation tax, which is also a reservation on the part of the Office for Budget Responsibility. I appreciate that the Chancellor is giving a super-deduction of 130% for those who invest, but this will last only two years. He might have been better to leave the rate at 19%, which compares favourably with our major rivals. Alternatively, he might consider extending the super-deduction for the full Parliament. We have a steep hill to climb as a result of Covid and Brexit—a double whammy—but the Chancellor has had a good shot at getting to first base.

[The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)]

I call again the noble Lord, Lord Mair.

EU-UK Trade and Cooperation Agreement

Lord Horam Excerpts

Friday 8th January 2021 Lords Chamber

[Lord Horam (Con)]

My Lords, like most of us, I imagine, I was relieved when, in the end, there was a deal. But I am afraid that it is not a good deal for the UK. The European Union gets all that it wants on trade and we get nothing on services, which we all now know, relentlessly, are 80% of our economy. That could be serious for our financial services industry. At the moment, we are the financial centre for the European Union. Will the European Union tolerate having its main financial centre outside its ambit? I doubt it. It smells good business and, as a regulatory body, can put the squeeze on us, as was pointed out by the noble Lord, Lord Davies of Stamford. Billions of pounds of trade have already gone and thousands more jobs will follow.

My other concern is inward investment from overseas, where we have consistently outstripped Germany and France in the past. Will that maintain its present level if we are no longer an easy entrance to the European single market? It seems unlikely.

I am afraid that in business we are like a card player who has voluntarily discarded two top cards but still has to play the game, so we have to reinvent ourselves on the economy. As the noble Lord, Lord Bridges of Headley, said, we have to think through our new role. It can be done. We have a great deal going for us, as the noble Lord, Lord Butler of Brockwell, pointed out—I entirely agree with him. There are opportunities, and difficulties always cause opportunities, but let us not underestimate the size of the task that we have set ourselves.

Spending Review 2020

Lord Horam Excerpts

Thursday 3rd December 2020 Grand Committee

[Lord Horam (Con)]

My Lords, I agree with what the noble Lords, Lord Desai and Lord Razzall, said about debt. As an economist, I am a qualified supporter of what is called modern monetary theory. MMT says that the economic policy should balance the economy, not the budget. Worrying too much about deficits is a mistake. Thus, Rishi Sunak is entirely right to borrow mind-blowing amounts of money because the essential task is to keep the economy going. Fiscal hawks will say that this all our money and it has to be paid back. Well no, it is not actually all our money. A lot of it is the Government’s money, which they generate from the printing presses of the Bank of England. We need to offset this only if we run the economy too fast for its natural speed and thus produce inflation. Then, and only then, do we have the need to raise taxes to damp down demand.

The advantage of MMT is that it enables Governments to concentrate on what should be done to improve the economy and society, and not be perpetually bogged down in arguments about how to pay for it, which often prevents necessary action. Of course, the Government of the day have to make wise choices, and, to my mind, the levelling-up agenda should be top priority at the moment. Regional inequality in the UK is much the worst in western Europe. Also, sheer poverty needs urgent action. Even after all the billions spent on Covid, we still have some fiscal space to do the things that need to be done, so we should do them, though we should, of course, prioritise. I hope that the Government have the courage and judgment to follow this path.

Covid-19: Economy

Lord Horam Excerpts

Thursday 4th June 2020 Lords Chamber

[Lord Horam (Con)]

I think that there is a general acceptance that the Chancellor and the Treasury have risen to the challenge posed by the pandemic. I want to make two points.

At the moment, we are borrowing awesome amounts but it is not a unique situation. In 1950, as a result of our efforts in the Second World War, debt was 250% of GDP. That did not prevent Harold Macmillan building 300,000 houses a year in the mid-1950s or, in 1959, winning an election on the slogan “You’ve never had it so good”. In effect, the debt was quarantined—to use an apposite word—and was not repaid for another 60 years. We should do the same today.

There will come a time when tax rises are needed and, when it comes, I hope that we will devise a tax system that is fairer than the one we have at the moment—for example, with the taxation of capital gains and dividends as opposed to wages and salaries—but that point has not yet been reached. Indeed, I think that at the moment there is a case for tax reductions. For example, a temporary reduction in VAT to boost consumption should certainly be considered. I also think that we should relax the social distancing rules, as my noble friend Lord Lamont has suggested.

My final point is that I am very concerned about the post-industrial towns of the north, the Midlands, Wales, Scotland and Northern Ireland. I was born in one of them—Preston in Lancashire. They are proud towns with a proud history but they need help. I am referring to the levelling-up agenda, bringing them more skills and more infrastructure. Therefore, when the Minister winds up this debate, I want him, once again, to give a commitment that the levelling-up agenda will remain at the forefront of, and central to, our economic plans.

Housing: Availability and Affordability

Lord Horam Excerpts

Thursday 12th October 2017 Lords Chamber

[Lord Horam (Con)]

My Lords, many noble Lords may recall the name Lord Harmar-Nicholls, now sadly no longer with us. I remember him when we were both Members of Parliament along the corridor, when he was the MP for Peterborough. He famously retained the seat with a majority of 12, on one occasion, and subsequently with a majority of three. He always said that his ambition was to double his majority. I mention him because, as the humble Mr Harmar-Nicholls at the Conservative Party conference in Blackpool in 1950, he raised the cry, “Three hundred thousand houses a year must be built”. The noble Lord, Lord Smith, in his excellent introductory speech referred to this occasion. That cry was taken up from the hall enthusiastically and, as the story goes, Lord Woolton, a famous chairman of the Conservative Party, was listening intently and whispered to the head of the Conservative research department sitting next to him, “Can it be done?”. The word came back, “In theory, yes, it can be done”. Lord Woolton terminated the debate by saying, “This is magnificent; it should be done. It should be Conservative Party policy”. Imagine it: a conference where Conservative Party policy was actually decided at the conference—those were the days. And so it was. It became Conservative Party policy.

In 1951, the Conservative Government were elected and the Prime Minister, Winston Churchill, called on Harold Macmillan to be his Housing Minister. As the noble Lord, Lord Smith, again rightly pointed out, Harold Macmillan had really wanted to be Minister of Defence, but Winston Churchill said to him, “Harold, you’ll be loved in every humble home in this land if you can deliver 300,000 houses a year”. A glint came into Harold’s eye—he was not without ambition, as noble Lords will be aware—he realised the possibilities and got to work. He renamed the department the Department of Housing and Local Government, sacked the Permanent Secretary and brought in Evelyn Sharp, a famous civil servant. He brought in Sir Percy Mills, who had been a prominent industrialist in the Midlands during the Second World War, and appointed Ernie Marples, who had experience in construction, as his dynamic Parliamentary Secretary. He divided the country into 10 regions and got to work. In 1954, 317,000 houses were built. Not all of them were great houses, I have to confess. There a bit of rubbish there as well, but that target was achieved.

I mention all this because, obviously, it has been done. The target has been achieved, and I do not believe that it cannot be achieved again. It also shows the sort of drive that is needed to get something like this achieved. Crucial in all this was the fact that Harold Macmillan got the full-hearted support of not only Winston Churchill, who was then Prime Minister and for whom it became a personal commitment—as it is of our Prime Minister today—but Rab Butler, the Chancellor of the Exchequer. Ironically, in view of future political events, Rab gave him full authority to raise the money to get on with building these houses. I fear that the problem today is the Treasury. Why was there a limit of £2 billion and 5,000 houses a year in the recent statement at conference? It is the Treasury—the dead hand of the Treasury. The fact is the Treasury is limiting this, and the reason it will give is that we have a deficit of 80% of our GDP at the moment and how can we possibly add to that. Well, in Harold Macmillan’s time, the deficit was 250% of GDP and they still did it. They did not worry about that too much then. The reason is the Treasury today is making no distinction between current and capital expenditure. I am all in favour of balancing current expenditure over the economic cycle, making some allowances, and indeed paying off some of our deficit. That is absolutely right and, as a Conservative, I totally support that. But it is madness to include capital expenditure in that.

As the noble Lord, Lord Cashman, pointed out in his speech, we should be borrowing against our assets. We are creating assets, against which the local authorities should be able to borrow. The noble Lord, Lord Cashman, may be interested to know that, in today’s Financial Times, there is an article making this very point: it makes a distinction between current and capital expenditure in the Treasury in New Zealand and, therefore, New Zealand has a long-standing patient infrastructure programme, which we have never had in this country under any Government. So this is a problem for the Treasury, I think. We are also facing the possibility of a recession in 18 months or two years’ time. This would be a counter-cyclical policy, so it is good not only on housing grounds but economic grounds.

The House may remember that there was an excellent book produced by Anthony King and Ivor Crewe, The Blunders of Our Governments. I think I will produce a sequel: “The Mistakes of our Treasury”—unless it gets some sense in all this and behaves like an ordinary private company would. A private company would never get away with one number as the deficit; it would obviously have an account that would take into account the fact that it was spending money on development, research and building up assets. My plea to my noble friend, when he replies, is that he takes the views expressed in this debate today, with the urgency in which they have been made, to the Treasury. The job can be done, but it will not be done unless we get the Treasury right behind it.

[Baroness Donaghy (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Horam, and I invite him to join these Benches—on this side.

[Lord Horam]

I have tried that. It was a big mistake.

[Baroness Donaghy]

I am grateful to my noble friend Lord Smith of Leigh for initiating this important debate, and I want to say something about the areas of greatest need, the Government’s potentially conflicting policies and the need for some cross-party work on this giant project, which will take longer than one or two Governments to achieve.

I turn, first, to homelessness, temporary housing and the impact on black families and older people. DCLG’s own figures reveal a 134% increase in rough sleeping between 2010 and 2016. The number of households in temporary accommodation increased by 60% in the same period. Whether this is because of a housing shortage, drastic reductions in local authority budgets, changes in housing benefit or a combination of all three, it is still the responsibility of the Government. What is happening to the weak and vulnerable is shameful. The drop in home ownership has seen black families affected the most. Less than one-third of black households are headed by owner-occupiers, compared with two-thirds of white families and 58% of Asian households. If we had more age-appropriate housing for older people, it would contribute to solving the wider housing crisis and might alleviate some social care and loneliness issues. The chair of the Communities and Local Government Committee, Clive Betts, when he launched the committee’s inquiry into housing and older people, said:

“Many pensioners may be interested in downsizing, but … are restricted from doing so by a lack of suitable options”.


The Government’s target to build 1 million homes by 2020 is commendable and I do not want to sound churlish, but even that target will not solve the affordability problem. By the way, if we do nothing else, can we ban the use of the word “affordable” where it does not belong? I checked the Concise Oxford English Dictionary this morning; it says, “have the means”, or “be rich enough”. It does not say “receive minor subsidy on overinflated full-price option”. As Shelter has pointed out,

“Developers are allowed to use secret ‘financial viability assessments’ to show that they’re not going to make a ‘competitive’ profit”—


my noble friend Lady Young has already covered this very ably—

“A whole industry now exists to provide such assessments, showing that affordable housing isn’t viable any more”.

Savills has forecasted that a further 100,000 homes are needed each year to have any effect on affordability—real affordability. The worrying contraction in the construction industry has not been felt so keenly in the housebuilding sector, although it has slowed down. Another concern is that we import a significant proportion of building materials and the costs have increased this year because of the weak pound.

The Prime Minister has promised to “make it my mission” to solve the housing problem. This is powerful and welcome. However, the extra funding that she announced for councils and housing associations—as the noble Lord, Lord Horam, has already said—will build 5,000 houses a year, bringing the projected total to 32,000 new council and housing association properties per year. This is good news, but a modest start. Mood music can be important, however, and perhaps council housebuilding will become so respectable that they will not have to be sold off afterwards.

I turn to Help to Buy, which presses all the political buttons for the Government. It accounts for a third of private sales of new homes. Like a flock of migratory birds, Help to Buy moves south to warmer climes, favouring areas that are not traditionally Labour heartlands. It is great that 135,000 families have benefited since the launch in 2013, but most of the beneficiaries of taxpayers’ money could have afforded to buy a home without such a scheme and 40% of the lucky households earn more than £50,000 a year. Experts as varied as Shelter and the Adam Smith Institute have said that Help to Buy will do nothing to meet real housing need and pushes up property prices.

I am all in favour of building companies reaping rewards for their work, but the five largest stock market listed builders made £3 billion worth of profit last year. The chief executive of Persimmon is likely to receive a £130 million payout, and half of Persimmon’s house sales are through the Help to Buy scheme. If we are to subsidise building companies—I am not fundamentally opposed to this—it should be done to build properties for people in greatest need. The Adam Smith Institute said of Help to Buy:

“This scheme is being used by investment bankers and doctors. They are certainly not the sort of people who the taxpayer should be subsidising”.


I pay tribute to John Healey, the shadow Housing Minister, for his hard work and clear message. He has built up a formidable knowledge of the housing crisis and what is needed to fix it over a period when six government housing Ministers came and went—if they had been tenants, no landlord would have wanted them. Labour has promised to create a government department for housing and will launch the biggest council housing programme for 30 years. It will make 4,000 new homes available to people with a history of rough sleeping. This would not mean borrowing from current spending but a return to the level of capital investment we had in the last year of the Labour Government. John Healey feels that the public loss of faith in the power of the state is due largely to the Government’s “small state” thinking, and that Governments have an important role in leading the way on housing. He calls for a cross-party consensus on public and private housebuilding, and I wholeheartedly agree with his views.

Building More Homes (Economic Affairs Committee Report)

Lord Horam Excerpts

Thursday 2nd March 2017 Lords Chamber

[Lord Horam (Con)]

My Lords, I add to the plaudits raining down on the noble Lord, Lord Hollick, and his colleagues on the committee. It was forensic in its analysis and commonsensical in its conclusions, and the report was remarkably well written by the standard of such reports. It also received in this debate today the ultimate accolade: the noble Lord, Lord Kerslake, said that he could not find a single thing to disagree with. Those of us who have listened to the noble Lord on housing over the months will recognise that that is the ultimate compliment. The report also cheered me up, because it came out in July at the tail end of that prolonged period, that endless night, when we discussed the then Housing and Planning Bill. It contained many good things, but it also contained—my noble friend on the Front Bench is now looking at me rather pointedly—some rather dubious things; indeed, in some areas, it seemed to point decisively in the wrong direction.

Since then, much water has flowed under the bridge. We have a new Government with a new Prime Minister, a new Chancellor of the Exchequer—very important in this context—and a new Minister, Gavin Barwell, who is not only an outstandingly able politician, as my noble friend Lord Forsyth alluded to, but happens to be the MP for a Croydon seat next to my old constituency of Orpington and therefore understands the problems of London housing which are at the epicentre of the housing difficulties we face. I am delighted that he is there. We have also had the dafter ideas in the Housing and Planning Bill dropped along the way, or at least not appearing as we go on. We have also had a modest Neighbourhood Planning Bill, which I think has been generally welcomed, an Autumn Statement which led to more financing for housing associations—which I very much welcome—and, finally, a recent White Paper which had many good things in it and got housing policy pointing fundamentally in the right direction. Whereas previously it focused far too much on tenure, it now focuses on supply—which is what the committee thinks it should do; therefore, we are at one on this.

The problem—I am afraid there is a “but” in all this—is that policy is hopelessly underpowered. It is like a Rolls-Royce that has a Mini engine and is therefore unlikely to catch up with the traffic around it and to make progress at the sort of speed we will need if we are to meet the target not only of 200,000 houses a year but the 300,000 houses a year which the committee says is necessary, and may well be so. In that respect, I give two examples. First, as the committee said—my noble friend Lady Wheatcroft also alluded to it graphically—we need to take the cap off local authorities. We need to take the constraints off their ability to use their surplus resources, which I know they have—my noble friend cited Bromley; Portsmouth, I know about. They have a lot of resources which could be used. We should incentivise local authorities to be entrepreneurial in a way they are not allowed to be at the moment. By curious chance, the Government should look across the Channel to France, where local authorities do not have such restraints and build more than 300,000 houses a year, a lot of them social housing. That is precisely because they are encouraged to be entrepreneurial. I remember the famous story of President Bush saying, “The trouble with the French is that they do not have a word for entrepreneur”. It is rather amusing that the French should be being entrepreneurial in their council housing and we are being markedly less so. It is also quite astonishing.

The other issue is the one raised by the noble Lord, Lord Layard, who has disappeared from the Chamber momentarily. It was brought home to me at the breakfast meeting this morning organised by Shelter to promote its idea of new civic housing. The noble Lord, Lord Shipley, was there along with others. In a nutshell—as he might agree—Shelter said, “It’s the land, stupid”. That really is the fundamental problem. If we allow land to be priced out at its maximum value in every possible circumstance, we will not get enough housing. We will get poor-quality housing and poor infrastructure as well. Unless we tackle that problem we are really going nowhere. I am pleased to note that the Government say, rightly, that they wish to consult on this issue and begin to have some ideas about it but we know what to do. It is a question of whether we can do it.

I see that Gavin Barwell is now going round the country talking to people about our housing problems. Apparently, he is meeting very large audiences. Perhaps some people think he is Gary Barlow and not Gavin Barwell; I gather that is a bit of a problem. However he is getting his audiences, he is going to the people in different parts of the country and I welcome that. My noble friend Lord Forsyth said, rightly, that he should be a Cabinet Minister. My noble friend may have been thinking of the famous case of Harold Macmillan, who was a Housing Minister in the Cabinet and therefore able to produce, with his particular authority as a Cabinet Minister, more than 300,000 houses a year—a famous part of Tory history which we all remember.

If that happens, Gavin Barwell should employ the noble Lord, Lord Hollick—just as the noble Lord, Lord Adonis, is employed by the Government—to help achieve this task. I would diplomatically suggest to the noble Lord, Lord Hollick, that that might be a better use of his time than trying to renovate the Labour Party, which is a rather Herculean task at the moment. Whatever the Government do, they should get together and, given that we all know what needs to be done, get on and do it.

Neighbourhood Planning Bill

Lord Horam Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Grand Committee

[Lord Tope (LD)]

My Lords, I support my noble friend Lord Shipley’s amendment, which I think has the same purpose as that of the noble Lord, Lord Kennedy. I declare my registered interest as a vice-president of the Local Government Association. I am not sure whether a liking for real ale is a declarable interest, but I am happy to declare it.

I support the amendment because of a particular local interest. When I looked at the website for a Member of Parliament in a neighbouring constituency, I found his campaign to save one of his local pubs. It included the statement:

“I would be interested to hear your views. I do have real concerns about the loss of pubs, which are an important focal point for local communities”.


The constituency is Croydon Central; the Member of Parliament is one Gavin Barwell. To be fair, it was a year or two ago, but the quote is still there on the internet—it is there for ever. I wonder how much he still has that concern, because the situation for pubs has certainly not improved in the year or two since he put that statement on his website.

I am particularly motivated to speak because of an issue causing considerable community interest in the ward that I represented until three years ago. A pub in that ward for most of the time I was a councillor was known as The Cricketers but more recently it became known as The Prince Regent, because allegedly the Prince Regent used to pass it on his way to Brighton and there was a vogue for changing pub names. We are talking about an outer London suburb and a time before the railways had brought the population to outer London. This pub had its origin in cottages built in the 1790s. That may not be very old in many parts of rural England, but in suburban London, the 1790s is quite old—it is one of the oldest buildings in London. In the 1850s, the Sutton Cricket Club was formed as the suburb started to grow. It used to play on the green opposite the pub, hence the pub becoming known as The Cricketers for more than a hundred years. So it has considerable historic interest. Whether it has architectural or historical merit is for others to determine, but it certainly has considerable historic relevance for the people who live there.

There is now a proposal to demolish the pub and build instead a nine-storey block of flats, considerably larger than the 18th or 19th-century building. The local community is campaigning hard to prevent the demolition of this historic monument, one of the very few in the area. It has applied to register it as an asset of community value, which has been exempt from permitted development rights only since 2015, so not too long ago. That process is under way and will, I hope, be successful, because the pub is considerably valued by the local community not so much as a drinking establishment but more because it represents something historic in a London suburb before the railways came, and is therefore of considerable historic significance. I hope that it will achieve registration as an asset community value, but I understand that even the status of assets of community value have their drawbacks.

I have spoken to our planners about this issue. They are very much in favour of this amendment and point out that if permitted development rights were withdrawn for all pubs, it certainly would not mean that they would all be preserved for ever regardless of the circumstances. Of course that would not happen; it would be absurd. If a public house is not viable and has no other beneficial use, it does not deserve to be preserved. However, simply to knock down a pub because it might make more money if it was turned into nine-storey flats is not in itself a justification for doing so. The removal of permitted development rights would mean that any proposal for demolition or development would be subject to the normal planning regime and to consideration by the planning authority. A decision would be made on whether the pub was viable and should be retained as a pub, with marketing conditions and a planning policy if necessary, or whether it was not viable but the building should be retained as part of a street scene, which may well be appropriate in the circumstances I am describing, or whether a complete redevelopment of the site should take place.

Another drawback to assets of community value, which I think was one of the most valuable measures introduced by the coalition Government under the Localism Act, is that the registration is valid for only five years. After five years you can apply to have the asset registered again, provided somebody remembers to do that, but there is no guarantee that it will be registered again. Therefore, while the provision is extremely valuable, it is not necessarily long term and is not without risk. Given the value that is attributed to pubs in particular circumstances, we are losing them speedily. I am told that 16 of the 69 pubs that existed 10 years ago in my London borough have gone. That is two a year disappearing from a London suburb with a growing population. Therefore, I strongly support both these amendments. I hope that our Minister will share the views expressed by the Housing Minister before he was the Housing Minister. I hope he will recognise that this is an important issue, that there is a way properly to resolve the situation, and that these amendments provide that solution.

[Lord Horam (Con)]

My Lords, if my noble friend has ever studied the history of the most successful political party in Britain, as I am sure he has—I refer, of course, to the Conservative Party—he will know very well that for many periods in its long history it was supported financially by the brewers. The brewing industry played a very large part in supporting the Conservative Party in times gone by. They obtained some recompense for that support. My noble friend will recall that there was a period in history when the peerage was known as the “Beerage” because of the amount of compensation received by individuals who had supported the Conservative Party. Those people would turn in their grave if they thought that the Conservative Party of modern times was in any way against public houses which, as has been said eloquently by many noble Lords and noble Baronesses, perform an important role in not only our urban but our rural life.

I am familiar with a pub in the West End of London off the Edgware Road which dedicated itself to members of the Royal Air Force during the war and had pictures of all the great names from The Few, and so forth. The chap who ran the pub had a handlebar moustache; the pub was an object of great interest to tourists and others and was a great business. However, that pub has gone because the value of the property as a residential building was much greater than it was as a pub. Frankly, that is a tragedy for the tourist industry and for London. The closure of pubs affects the personality of our country not only in London but also in rural areas. I plead with my noble friend as a Conservative Peer to look at this issue most sympathetically. I hope that he will do so when it comes back on Report.

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have not participated in proceedings on the Bill before, so I apologise to the Committee for coming late in the day. In the light of what I am going to say, I also owe an apology to the noble Lord, Lord Kennedy, the noble Baroness, Lady Deech, and other noble Lords who have put their names to the amendments in this group as I am going to urge my noble friend to resist them. They are perfectly well meaning, but they are the statutory equivalent of trying to make water flow uphill. They can only inhibit, or slow, pub closures. The brutal truth is that there are too many pubs for modern Britain, too often they are in the wrong place and the whole sector is insufficiently profitable. In cases on the margin, where they could, perhaps, be profitable under other ownership, the opportunity to list as an ACV exists, as several noble Lords have said. Pubs are perfectly adequately protected.

This is an issue which arouses strong emotions. Until February 2014—more than three years ago, and therefore outside the time during which I have to declare a past interest—I was a non-executive director of a major integrated brewery and pub operator. It had five breweries from Cockermouth in Cumbria down to Ringwood in Hampshire and operated more than 2,000 pubs. Some were managed—there was an employee running the pub—and some had tenants and were tied, as was the case in those days. It is often overlooked, but that is a very easy way for people to set up their own business because you have a business offered to you, which you can operate, and you can begin straightaway without having to put up much, if any, capital. While under the old system, you had to buy your beer and soft drinks from the owner, food was down to you. I declare that interest because it is important as this is an issue which arouses strong emotions. The last time we got into this discussion, which was last summer, I managed to obtain a starring role in Private Eye as a result of CAMRA’s intervention. My speech was described as “the high point in an otherwise undistinguished political career”, which I thought was fair dues. So are you listening, Private Eye, as I want to get that on the record?

Why does this issue arouse such strong emotions? The noble Lord, Lord Cameron, touched on it. It is because of how people view a community. A community has three aspects that people think are important. They think there should be a shop or post office, some place of worship—a church—and a pub. They do not necessarily want to use them a lot. They will go to the shop or the post office when they have forgotten to buy bread and milk at Tesco. They will not go to church very often. They will go at Christmas and Easter, if they are Christians. They may want to get married there, they may want to have their children christened there and to be buried there—hatches, matches and dispatches—but they will not go much apart from that. They will go to the pub occasionally, but not regularly. The reality is that if you do not use it, you lose it. Most of the pubs that are under pressure are not attracting sufficient custom to be a profitable operation, but because of what is in people’s view of a community, if any of those three pillars is going to close down, people will get exceptionally excited about it and believe that somehow, something must be done—hence the emergence of the ACV procedures.

The second reason people feel so strongly about it is the belief which CAMRA has assiduously fostered—I pay tribute to its campaigning capability because it has been the most enormously successful pressure group—that somewhere in this operation there is a pot of money, that someone is making a lot of money somewhere, and if only it got down to the pub and the pub owner all would be right and the pubs would be happy and we would be in the sunlit uplands once again. The reality is that the sector is under enormous economic and societal pressures. There is not a lot of money in the sector and the idea that somehow pub owners or brewers are making huge profits at the expense of landlords does not tie in with reality. The reality is very different. It is a sector under stupendous strain—and I shall give the Committee three or four quick reasons for that. First, there is exceptionally cheap supermarket alcohol. If noble Lords go to a supermarket on the weekend before a bank holiday weekend, when things are on offer, they can probably buy lager for 60p or 70p a pint. If they go to a pub, they will pay £3 for it. So a lot of people are increasingly buying alcohol in the supermarket and drinking it at home.