Queen’s Speech

Baroness Andrews Excerpts

Thursday 5th June 2014 Lords Chamber

[Baroness Andrews (Lab)]

My Lords, in this debate, I want to focus on one of the most understated aspects of the gracious Speech, which has already been referred to in passing by my noble friend Lord Adonis and the noble Lord, Lord MacGregor. It is, of course, housing. We were told that one of the themes of this year’s Queen’s Speech was to be aspiration. There is one thing to which we all surely aspire and that is decent homes for ourselves and our children. That aspiration has never been so far out of the reach of so many people, and the Queen’s Speech, I am afraid, does very little to make it a reality.

We were also told that this was to be a bold Queen’s Speech. There are very welcome references to garden cities, and isolated initiatives such as selling high-value government land and more Help to Buy, but they require close scrutiny and certainly do not add up in terms of scale, investment or coherence to what is so obviously needed. If this were to have been a bold strategy, it would have had to set out a full and proper vision and strategy for housing the nation—a clear prospectus for meeting the needs and ambitions of all communities, all tenures and all ages. To match the national mood of anxiety about housing, it should have been at the core of the text of the Queen’s Speech—not a series of marginalia—recognising the frustration in so many families as they watch prices and rents spiral out of control.

I had hoped today that we could debate housing within the wider context of the economy. It was disappointing that the Minister made such passing reference to housing, not even mentioning it in his list of infrastructures that drive the economy and should be prioritised. The noble Lord, Lord MacGregor, has wisely drawn attention to the real fears that by stoking the housing bubble in London there is a threat to a very fragile economic recovery. The London housing crisis exemplifies with brutal clarity the extent to which we have a not only dysfunctional but dangerous housing market, fuelled by policies focused largely on demand that have not impacted sufficiently on supply. Without being at all partisan, surely we can all agree that there is something seriously wrong with a housing policy whereby £23 billion is spent on housing benefit to subsidise housing costs and only £1.5 billion is spent on capital investment in social housing for those in greatest need.

“Crisis” is an overworked word but is justified in the context of London. Every day, as the noble Lord, Lord MacGregor, said, we see absentee millionaires’ flats rising on every available space in central London. I hope the Government will not only listen hard to the call for monitoring that process but think about the actions required to reduce it. Less visible are the families being driven out of London by the bedroom tax, or the young and professional families who are stuck in insecure and overpriced rented accommodation, with no hope of buying into the market or moving out of London. Young people are paying a fortune for the most appalling, shared rented accommodation. We in the last Government thought we had come close to solving the problems of homelessness and evictions by investing in homeless hostels and improving conditions. It turned out not to be the case. The national association of ALMOs reflected only yesterday that the percentage of rent arrears in households affected by the bedroom tax had increased from 37% to 69% by the end of June 2013, and is now about 27% above the base position.

To date the Government have tackled the housing crisis primarily through welfare restrictions and advantageous mortgage take-up. A fair and effective housing policy needs to plan to restore the balance of the housing market to meet the totality of housing needs. The fact is that while Help to Buy can help the few, help to build is the only way in which to help the many. What might a policy focused on help to build consist of? We need clarity and certainty around the number—an accelerated number—of new homes that we need to build, and how they would be financed and distributed across tenures. There is no mystery to the figures. By 2021 we will need to house an additional 221,000 households each year. We also know the price of failure. Almost 10 years ago to the day, Kate Barker spelled out the problem in her review of housing supply:

“I do not believe that continuing at the current rate of housebuilding is a realistic option, unless we are prepared to accept increasing problems of homelessness, affordability and social division … hampering our economic success”.

How very right she was, and she recommended an annual target of 230,000 new homes. In 2007, the last Government were building 170,000 a year, the highest rate for 19 years.

I would therefore be grateful if the Minister could clarify the agreed government target for housebuilding. Is it 200,000, as I understand the Housing Minister to have said, or is it 300,000, as some of her Liberal colleagues are saying? Does she agree that even the lower figure would demand a significant input from public and social providers? What proportion of that housebuilding target will be social housing? Does she agree that there is an indisputable economic case for social housing? This was reinforced recently by no less than PricewaterhouseCoopers, working with the London and Quadrant housing association, in a report called The Numbers Game. It clearly shows that, for those on lowest incomes and in the greatest need, housing at social rents offers the best deal, not just for tenants but for taxpayers and providers. That sort of evidence lends further volume to the chorus that is calling for the Government to remove the cap on the housing revenue account, which stops local authorities from building. That chorus is not just the usual suspects: it includes the Home Builders Federation and the CLG Select Committee. It is not a minority argument. In fact, the Government have already conceded the case: borrowing limits have already been raised by £150 million. That is a welcome recognition that the system is not fit for purpose. The logic is to abolish it altogether. Very handily, the Deregulation Bill is coming down the track into this House shortly. It is an obvious vehicle for doing this, which would kick-start more social housing.

The right reverend Prelate has called for more co-operation and partnership working at local level. How right he is. We need to see the LEPs working across boundaries. We need to see the sub-regional partnerships planning systematically for housing. We are making up so much ground that was already in place when we had regional spatial planning. It is a tragedy that we have to reinvent some of that.

Let me suggest a few more things the Government can do quickly, in the next year, to make help to build a reality. My heart sank when I heard of another reform of the planning system. We have only just had the guidance on the National Planning Policy Framework. More than anything else, planners need certainty in the system. They need to know what they will be able to invest in. Why do the Government not look, for example, at legislation to identify and free up land banks, which are deliberately being held back for long periods, to create the range of new delivery vehicles needed if the Government are serious about garden cities—not just garden cities, but good, high-quality, well designed urban extensions? Why do the Government not acknowledge that the new homes bonus has not led to an increase in building? They should go back and have a look at the housing and planning delivery grant, which was really effective.

Help to build also means taking the long view on the demography of this country and planning for a society that is growing older and occupying a lot of housing stock. There are not sufficient decent, high-quality homes for older people to move into. If we made that a priority, recognised that we are dealing with the whole community’s housing needs and integrated housing as the front line for decent health and care for elderly people, we would have a much more intelligent approach to housing and health and care.

The most urgent action is to help what Ed Miliband has called Generation Rent. My noble friend Lord Adonis referred to it as a lost generation, living in insecurity and with soaring costs in the private sector. These are young, vulnerable and exploited people, often in very low-paid jobs or unemployed. Despite being a supposed free market, private renting is a major cost to the taxpayer. It benefits from a patchwork of subsidies, guarantees and tax reliefs. It is the main driver behind the huge escalation in housing benefit. The next Labour Government have committed to build a modern rented sector, with sensible reforms around the core rights of consumers. We can look to other successful countries that are doing that, such as Germany. We can look to New York, where Mayor Bill de Blasio plans to build no fewer than 200,000 affordable units to rent. He has the support of the Real Estate Board of New York behind him, because it knows that a regulated market, properly done, has the self-interested support of the whole market. Why can we not do that in London, instead of letting the market rip?

Finally, there is time to do two things that can make a big difference. Legislation can still be brought forward this year to regulate letting agents and to extend the powers available to deal with rogue landlords. Those two immediate changes would help the most vulnerable. We have a year before the election. It is not too late to do any of that. Somehow I suspect we will have to wait for another Government to do it. I hope that will be a Labour Government, who will put different values and priorities into place.