Housebuilders

Lord Stunell Excerpts

Thursday 11th January 2018 Lords Chamber

[Lord Stunell (LD)]

My Lords, I am delighted to contribute to this debate. I thank the noble Lord, Lord Best, for his excellent introduction to it and am in full agreement with his analysis and conclusions. We need a lot more homes—we need them quickly and at a price that people can afford—and we are far from getting that at the moment. All the political parties say that more housing is needed, and there is really just a debate about how they should be provided. The Conservatives have invested a lot in increasing demand through the Help to Buy scheme, and the consequence has been an increase in profits for developers and a rise in prices. I believe, and I think my Liberal Democrat colleagues believe, that there should be much more emphasis on increasing supply by investing in diverse providers and tenures and thus moving towards stabilising prices and improving affordability.

The big companies have something to answer for, because they are the ones that get the big profits, and the noble Lord, Lord Best, has highlighted Persimmon and the chairman’s £104 million bonus. The big companies go for slower production on big sites—and I have cited before the Ebbsfleet development, where 15,000 permissions were granted seven years ago and only 800 houses have been built so far. There is the question of quality as well: 93% of new-build customers reported faults to their homes. In contrast to that, with smaller developers you get multiple starts on many small sites and quicker build, which in turn can lead to stable prices and modest land banking. All those things are surely desirable.

The Chancellor’s Budget makes some progress but, even on the most optimistic reading of his arithmetic, it would raise production only to 200,000 a year, a long way short of 300,000. What needs to happen? First, we need to lift council spending limits. It is surely silly that they are free to borrow at will to buy cinemas, hotels and offices but cannot do so for homes. The sooner that is put right the better. They should be permitted, indeed encouraged, to build for rent—we used to call them council houses. There should be funding for housing associations as well. We need to encourage councils to build to sell on public land at affordable prices with 100% recycling of that money into housing. We need to use public investment and procurement to provide a secure pipeline of work for the industry, which can bring stability to employment and enable the skills, growth and development that are also urgently needed. We can use public investment and procurement to build those homes so that they are green and of a high quality. There are opportunities for innovation and off-site building that can come only from that kind of consolidated, strategic approach.

We need to shape planning and building regulations to deliver a clean environment and green homes. There is a role for the big 10 construction companies, but they must use their scale to innovate, to build off-site, to build prefabricated and to use modern methods of construction. They must use their weight to support training—we need a doubling of the training provision in the construction industry—and they must use their pattern books and repetitive design to drive quality up, not down. They must also stop bullying planners over viability tests, stop bullying SMEs over supplies and discounts and stop treating subcontractors with disdain over retention and payments.

I ask the Minister to take away from this debate the urgent need for the new Housing Minister to get a grip of the problem, break the Treasury’s hold on the purse strings and get building homes again.