Housing: Spending Review

Baroness Dean of Thornton-le-Fylde Excerpts

Thursday 4th November 2010 Lords Chamber

[Baroness Dean of Thornton-le-Fylde]

My Lords, I, too, thank my noble friend Lady Hollis for securing this debate today and congratulate her on the not at all unexpected forensic way that she approached this subject with her wide knowledge and experience. I declare an interest in this debate as a former chairman of the Housing Corporation and a current member of the board of Taylor Wimpey housing developers. We are talking about housing benefit and how it impacts on people, but what we are really talking about is people’s lives in the round. It is a fact clearly established by academic research and natural observation that the kind of housing you are brought up in helps dictate your life chances because of the profound impact that the kind of housing they live in has on people’s health and, particularly, on children. That spins off into their ability to learn at school and to be able to do their homework at home and their future life expectation, so we are not talking about housing just as accommodation.

Over the past three decades, we have seen our population increase as a result of demographic changes and family breakdown and an increased demand for housing in our country. It was not a failure of either Government’s housing policy, but we just could not keep up with the demand. As a result of family breakdown and living longer, the demands are higher. That brings us to the situation that we have today with insufficient supply for what is needed in the country and in the middle of that issue, we have this financial crisis.

That long-term demand was recognised by the Conservative Government in the 1970s. They recognised that the state would not be able totally to fund affordable housing for those who could not buy on the private market. They enabled housing associations to raise money from the private sector to match, quite often, the grant given by government so that today private investment in the housing association sector is well in excess of £50 billion. When elected in 1997, the Labour Government recognised that that would still not support the housing need and doubled state investment in housing with huge benefits and effect. The decent homes policy and the supporting people policy were both Labour Government policies, and I am delighted that this Government’s changes are not going to affect them substantially.

The core issue of housing shortage is a dilemma for any Government. My question is therefore, if housing has such a profound effect on people and the lives of our citizens, why have this Government, in a situation where we recognise that we have to have public expenditure cuts, cut CLG back probably the most of any of the cutbacks of any government department? Capital expenditure in housing will go from £6.8 billion this year, as defined by the previous Government, to around £2 billion in 2014 against a background of ongoing demand. That must have a profound effect on people who cannot afford to buy their own homes.

Against that background of reduced capital expenditure by the state, can the Minister explain to me, if not today at the end of this debate perhaps afterwards in writing, what financial model has been used to try to justify the outcome of the reduced capital expenditure? How will the increased rents that are being talked about fund the gap that will deliver 150,000 houses in the Government’s target over the next four years, linked with their other measures? I cannot find any evidence anywhere that supports that argument. Whether you are looking at the vested interest of the housing associations and the National Housing Federation or at the Royal Institution of Chartered Surveyors, anyone who has looked at this has said that they have substantial doubts that the target of 150,000 will be met.

The abolition of housing targets has been put forward as liberating local authorities. We have had this before. The reason we had local targets was because some local authorities were appalling at providing housing for their local community. We know what can happen and what probably will happen: a good local authority will build, a bad one will not but will send its homeless over the border to the next town to provide housing for them.

We are talking about money, investment and people’s lives. What is this Government’s vision for housing in the future for this country? I do not understand it any longer. Housing issues have always been top of the postbag for MPs. I suggest that this Government’s policy will increase that. We have talk of the big society. I suggest that this perverse and almost vandalistic approach to housing for people will not bring about a big society; it will bring about a more divided society and under the policy for housing we will see a rerun of the “Cathy Come Home” film which had such an impact on all of us.