Finance (No. 2) Bill

Andy Sawford Excerpts

Wednesday 17th April 2013 Commons Chamber

[Chris Leslie]

My hon. Friend ought to know by now that this particular Treasury does not go in for assessments based on evidence. In fact, we are lucky that there was a fag packet on which the Chancellor could draw up his plan.

My hon. Friend needs to recognise that the Budget was not designed to deal with the needs of the economy, the housing market or the rural communities to which she has referred. It was designed entirely to save the Chancellor’s skin, and to support his ideological approach and the extreme austerity agenda that he has been pursuing. Because he had been failing on the deficit and borrowing, he decided to design a housing market intervention that fell below the line—that added up in terms of national debt, but did not affect his borrowing figures. The convoluted scheme that he created may have a series of perverse consequences, because it was not designed to meet the needs of housing or of the communities that we represent. It was designed merely for the Chancellor’s own convenience, in the light of his disappearing and diminishing personal prospects.

We all know, or at least Labour Members know, that housing is the bedrock of a stable community, strong families and economic progress, and that the adequacy of housing availability is crucial to our economic recovery. There should be a cross-party consensus on the need to help families to get a foot on the housing ladder and helping people to fulfil their aspirations and provide a decent foundation for the future. However, despite the warm words about housing that we have heard for the past three years, the Government’s record is poor, and the housing investment measures in this Budget—like those in previous Budgets—fall well short of what is needed and what Labour Members would advocate. What hope can there be for hard-working families who are struggling to get on to the housing ladder, given the current mismatch between supply and demand? House building has fallen, rents are rising, home ownership is becoming harder rather than easier so that the goal for young families is becoming less and less achievable, and homelessness has risen.

[Andy Sawford (Corby) (Lab/Co-op)]

I agree with my hon. Friend’s assessment of the likelihood that the Government’s latest measures in the Bill will significantly improve people’s opportunities to buy their own homes or gain access to housing on the rental market. Are we right to take account of the Government’s track record over those three years when making such an assessment, and am I right in thinking that the Government have announced 300 housing measures which have caused the situation to become worse rather than better?

[Chris Leslie]

It could almost be said that there have been more announcements than new homes constructed under the present Administration. Let us consider a few of the schemes that they have announced.

My hon. Friend will recall the new homes bonus, which was part of the Government’s so-called localism agenda, because he and I have spent some time examining that particular set of policy options. The scheme, which the Government announced in 2010, was supposed to unleash growth and build at least 400,000 additional homes, but it has totally failed to deliver. The number of housing starts fell by 11% last year, to below 100,000—less than half the number required to meet housing need.

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[Chris Leslie]

Setting aside the fact that there is probably the lowest number of Conservative MPs here in the Chamber today since 1923, they do not have room to criticise any previous Government on these issues, let alone the last Labour Government. We believe that there is a crying need for housing, which is one of the crucial foundations for future economic prosperity. It is about time Government Members recognised that they have had three years in power, and have their own record to defend. They have to take some responsibility for the decisions they have been supporting.

I do not know whether my hon. Friends recall the infrastructure guarantee scheme, a key feature of the summer before last. It was part of the Government’s emergency legislation, and they rushed it through Parliament. It was supposed to enable guarantees to underpin £40 billion of investment in infrastructure and £10 billion-worth of new homes, including 15,000 new affordable homes. However, so far as I can see—I am sure the Minister will intervene if I am wrong—not a single tangible penny of support from that scheme has been allocated for house building. I am happy to give way to the Minister if he wants to correct me.

[Andy Sawford]

Will my hon. Friend give way?

[Chris Leslie]

I am just waiting to see whether the Minister wants to intervene. [Interruption.] It seems that he does not, so I give way to my hon. Friend.

[Andy Sawford]

My hon. Friend questions the confidence we can have in voting on the measures in the Finance Bill, given the Government’s performance in the last three years, and rightly mentions their infrastructure guarantee scheme. According to my assessment, they have begun 15% of the 576 projects in the national infrastructure plan, so we have no reason to have any confidence in the measures in the Bill.

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[Alison Seabeck]

My hon. Friend is right. I think we have to take the figures offered by the Government with a huge pinch of salt. Although I support any measure, as I am sure he would, to kick-start the housing market and enable young people, such as my daughter, to get on the housing ladder, I, like my Front-Bench colleagues, have serious concerns about the scheme.

[Andy Sawford]

My hon. Friend makes the point that we need to kick-start the housing market, and I think that all Labour Members agree. She talked about the chutzpah of the Government’s first Housing Minister, whom she challenged at the time, when she led for the Opposition. Is there not a contrast between the urgency of the measures that were rushed through Parliament when the coalition Government took office and the delay in the measures that they now say will make some kind of difference, which will take us through to January?

[Alison Seabeck]

My hon. Friend is right. There is a significant gap that will lead to a further trough in house building. It will certainly not lead to the boost that the Government expect as a result of introducing the scheme. Frankly, the scheme looks like another idea drawn up on the back of a cigarette packet, and we have seen too many of those. I think that this one, like others, whether in welfare, education or health, will have a number of unforeseen consequences.

Following the Budget, we now know that the Government’s mortgage scheme will not exclude people buying second homes. Although it might get some movement into the market, it will not solve the underlying problem and could well be abused. In areas such as the south-west, where we have a glut of second homes and where affordable homes are a rarity in some areas, introducing measures that could increase the opportunity for people to purchase second homes, as well as risking pushing up prices, is extremely dangerous. That could create severe price volatility in those areas and lead to the exact opposite of the intended outcome.

In Plymouth and the South Hams, we have the prospect of around 5,000 new homes in Sherford, all close to some of the most beautiful countryside and coast in the country. Many people will want to buy those homes, which opens the door to second home ownership. How many of those purchasers will want to buy to let? The Government say that they do not plan on the scheme being used by people who want to buy to let, but by using subterfuge it will be entirely possible for them to do exactly that. Will the Minister explain exactly what type of bureaucracy will need to be set up fully to ensure that the scheme is not abused by people who want to buy to let?

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[Stephen Williams]

Thank you for calling me, Mr Hoyle. I am being called rather sooner than I imagined; indeed, I did not even necessarily imagine that I would be making a speech in full detail, but making use of my House of Commons Library notes I have hastily prepared something, particularly on new clause 5, which is a welcome innovation in many ways.

[Andy Sawford]

As the hon. Gentleman is not quite prepared to speak at the moment, perhaps I could help to give him some material for his response to the new clauses. Will he enlighten us on whether the Liberal Democrats might take this opportunity to support us in pushing forward a mansion tax, given that they did not do so last time?

[Stephen Williams]

I am happy to enlighten the hon. Gentleman, whose intervention falls into the category of a nice try. I think he is referring to the Opposition motion on this issue that we debated five or so weeks ago. The Government amendment to that motion made it crystal clear that, in the context of the coalition, my Conservative Front-Bench colleagues do not support the introduction of a mansion tax in this Parliament; indeed, it is not in the coalition agreement because we could not agree on it at that point. However, the Liberal Democrat part of the coalition does believe that a mansion tax should be introduced. We are happy to do the workings on it and happy to espouse it at every opportunity. It will be in our manifesto at the next general election, and subject to what happens in that election, when I am sure that negotiations may well take place again, perhaps we will have a different outcome. I welcome the fact that the Labour party, which emphatically rejected the principle of a mansion tax in the negotiations in 2010, now seems to be on the way towards conversion to the long-term Liberal Democrat train of thought on this issue.

I also hope that Conservative coalition colleagues might have a conversion between now and 2015. Some of them—in fact, a lot of them; we talk to each other rather more than we used to—whisper in my ear that they wished the Conservative party that embraced this policy. That applies particularly to Conservative MPs from the north of England—north of the line from the Severn to the Wash. Perhaps there are not very many £2 million properties in those constituencies. Nevertheless, a lot of Conservative MPs from outside the south-east of England have privately said to me that they wish the coalition would adopt this principle.

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[Stephen Williams]

The hon. Gentleman, whom I quite like and respect—a feeling not shared universally among his colleagues—tempts me to comment on what might happen in the 2015 general election, on what discussions might take place in its aftermath and on what we might say during it. In 2015, the Liberal Democrats will say that we favour a mansion tax, with all the details we have already put on the table. I intend to publish a short paper that might help—it might do the Treasury’s job for it, making the new clause unnecessary—and which will flesh out what I am talking about. He said that Labour might benefit from taking more policies from the Liberal Democrats. We are all in politics to see our ideals, principles and policies put into practice, and if Labour wants to adopt more Liberal Democrat positions, instead of always saying we are wrong, the public might welcome that more grown-up attempt at consensus politics.

[Andy Sawford]

I do not understand something about the hon. Gentleman’s remarks. He has justified not voting for his own policy five weeks ago on the basis of an artfully crafted—I think he used those words—Government amendment that allowed the Liberal Democrats to wriggle out of it. But today there is no such amendment. He has challenged, very assertively, the depth of our new clause. If he is so confident in the depth of his own policies, why have the Liberal Democrats not tabled a new clause that he could vote for today?

[Stephen Williams]

I am happy to reveal now that I will not be supporting new clause 5 in the Division Lobby. That should not surprise the hon. Gentleman. I will not be supporting it, because it is not about the principle of introducing a mansion tax. It asks for a study. It asks the Treasury to do some work. These are busy people, with important work to do, and I do not want to waste their time. We do not want them to waste their time finessing badly thought-through Labour party proposals.