Baroness Ford
Main Page: Baroness Ford (Crossbench - Life peer)
Baroness Ford
To call attention to the level of affordable housing; and to move for Papers.
Baroness Ford
My Lords, I am very pleased to have secured this debate today on affordable housing. Like many noble Lords, I regard the lack of affordable housing to be a stain on our record as a civilised society, a serious drag on our economic competitiveness, but, most important, the scourge of many families and individuals across the country. Who could not have been moved by the Shelter report, The Human Cost, published in March this year?
I am grateful to all those noble Lords who are participating today, especially the noble Lord, Lord Gardiner of Kimble, and my noble friend Lord Touhig, whose maiden speeches we eagerly await. I am grateful also for the support of those noble Lords who could not attend. In particular, my noble friends Lady Dean and Lady Andrews wished me to convey to the House their regret at being unable to contribute today. I should also declare my interests as a director of Grainger plc, the largest listed landlord in the United Kingdom, and chair of the Olympic Park Legacy Company.
I am delighted to see the Minister in her place. I know that she has made strenuous efforts to change her diary to be here today and I thank her for that. She brings much wisdom and great practical experience from her distinguished career in local government, and I know that many Members of your Lordships’ House were delighted to see her appointed to this role. We expect great things of her and hope that today, among other things, she might shed some light on the revolution in housing promised by her colleague Grant Shapps when he addressed the Chartered Institute of Housing last month.
It is almost four years since we had the opportunity to debate this important subject. In that time, much has changed, and the lives of many individuals and families have improved. But intractable problems remain. Housing for many people in this country is their single greatest source of stress. That is perhaps because of homelessness, overcrowding, lack of decent facilities, or the inability to escape dysfunctional or abusive relationships perhaps because of the fear of repossession. It may simply be the dispiriting realisation, even on the part of a young nurse or a young teacher on a decent salary, that home ownership is beyond one’s means.
For many people trapped in such circumstances, affordable housing is the key to independence. By “affordable”, I mean not just social rented housing but also decent private rented housing, intermediate renting, shared-equity housing and low-cost home ownership—in other words, housing that average workers and families could readily access from within their means. That is easier said than done today in the United Kingdom.
It is not as if this is news to us. In your Lordships’ House, many of us can easily recall a time, not that long ago, when we were building 350,000 homes a year, when access to an affordable home was a realistic aspiration and when public policy recognised the need for long-term planning of new communities. If you look at the long-run trend of housing completions, you see that the private sector has, by and large, remained pretty static, delivering around 100,000 to 120,000 homes a year. It is public-sector housing, particularly the housing formerly built by local authorities, which has disappeared over the years. Housing associations have ably stepped into the breach, but have never had the funding nor achieved the scale to equal the output previously achieved by local authorities. Is it not time to acknowledge that councils have the local insight and know-how to commission public housing once again? Might the Government consider giving local authorities both the freedom and the means to build or commission new homes in their own areas? Since the election, the Housing Minister has repeatedly mentioned local housing trusts. Perhaps the Minister could explain to the House a little more about this concept—how these are to be created and how they might be funded.
We certainly did not get everything right in the immediate post-war period when production of housing was at the high that I mentioned previously, but we got quite a few things right. As well as enabling individual councils to build, we had the foresight to identify where new communities were needed, where we pre-invested in infrastructure and where we addressed economic development as much as housing. Fifty or 60 years ago we had a plan, we dedicated resources to it, and we created a lot of really excellent places to live and work. We called them the new towns, and we returned a great deal back to the Treasury. One of the great success stories of the way that the new towns were funded over the long term was the very real return over a long number of years to the taxpayer.
What has happened to that vision and foresight? I do not make this point in any party-political way as we have all struggled with this issue over the past 40 years. When the previous Government suggested creating eco-towns, the opposition was immense. Even with guarantees about infrastructure, roads, education, health and sustainability, the opposition across the country was staggering. At a local level, the noble Baroness probably knows far better than me that housing developments of even a small scale tend to attract enormous opposition in the planning system. But that is cold comfort to those people who desperately need a home now. Grant Shapps has said that we need a revolution. He is dead right; we do. But what sort of revolution do the Government have in mind? Will the noble Baroness reassure the House that the advances made over the past 10 years will be safe under her stewardship?
The advances that I mean include the increased delivery of affordable housing, from around 33,000 in 2000, rising steadily to almost 56,000 in 2009. The previous Government were committed to investing in all categories of affordable housing, and to their credit, kept faith with that commitment throughout the banking and consequently the house-building crisis. It is a remarkable testament to the Homes and Communities Agency that it was nimble enough to keep production going even when the housebuilders were struggling badly to bring any product to the market. Many of us welcomed the creation of the HCA in 2007 and were pleased that it had wide-ranging powers. But I imagine none of us had the foresight to see what an important role it would play and how those wide-ranging powers would be required only 12 months later.
So it was with dismay that we learnt of the intended cuts to be made to the HCA budget. Will the Minister say what reduction in expenditure has been asked of the HCA in the current year? What is her department's estimate of the impact of this in the number of affordable homes due to be completed in the current year and in the next?
For many years now, we have also had the benefit of private-sector contributions to affordable housing in the form of Section 106. Will the Minister say whether the reports of her Government’s intention to scrap this valuable tool in delivering affordability are accurate? Provision of social housing has come to depend on three separate but interconnected things: first, on land being made available through Section 106 contributions; secondly, on grants being made available from the Government; and thirdly, on housing associations being able to raise private finance through the banking or capital markets to make up the difference.
The housing associations have been arguably the best and best value-for-money example of private finance for nearly 40 years. They have raised significant sums over that period to supplement the resources made available by the Government—£60 billion and growing. Why have the banks and other financial institutions continued to lend long at up until recently very low rates of interest? Because the Tenant Services Authority and the Housing Corporation before it were excellent economic regulators. The reassurance that the regulator would step in was, and remains, of paramount importance to the finance industry. A housing association has never defaulted on a loan in almost 40 years of that regime. That is why it was troubling to hear that the Housing Minister was planning to scrap the TSA. Will the noble Baroness confirm reports in last Thursday's Financial Times that the Treasury has now intervened to stop this plan and has made plain the absolute necessity of economic regulation in this sector?
The interplay of housing policy and financial policy has become very close in relation to affordable housing, so I will say a word or two mortgages. They are important, not just because first-time buyers rely on a competitive mortgage market, but because it is the lifeblood of private housebuilders. If there are no mortgages, there is no confidence to build new developments. We have seen that graphically over the past two and a half years. No new development means, among other things, no Section 106 contribution, so no support for affordable housing from that sector. It is vital that the Government do all that they can to keep the mortgage market from seizing up again.
In that respect, I draw the Minister’s attention to the fact that the Financial Services Authority is developing—almost finalising—its new capital adequacy regime. Among other things, there will be new definitions of tier 1 capital. I urge the Minister to ensure that in framing its new regime for banks with riskier profiles, the FSA rules do not unintentionally damage the building societies and particularly the mutual building societies. I absolutely agree that banks with higher-risk profiles must set aside enough capital to offset those risks. But it seems perverse that mutuals, for example, which have significantly lower-risk profiles, and are simply not by law permitted to engage in these riskier transactions, must be treated the same. The result would inevitably be a shrinkage of their balance sheets, exactly at the time when we are looking to increase mortgage lending and have every penny available for first-time buyers and other good credit-worthy people who want to take on a mortgage. Will the Minister make sure that her department is consulted and involved in the finalisation of these discussions and that decisions reached do not unintentionally damage mortgage availability?
This is an important debate. I have always believed that along with parenting and education, the type of home that you live in and grow up in fundamentally affects who you are and what you might become. My earnest hope is that in the forthcoming comprehensive spending review, the Minister will strongly resist a scorched earth policy on affordable housing. I beg to move.
Baroness Ford
My Lords, in finishing, I thank all noble Lords who have participated in the debate today, and the Minister for her response. A lot of detailed questions have been asked and we look forward to her responses in writing in due course. It was an absolute delight to hear the noble Lord, Lord Gardiner of Kimble, say in his maiden speech that he was the deputy chair of the Countryside Alliance. I was not sure that we would have a huge amount in common, but then I found that I agreed with 95 per cent of what he said. I look forward to him joining in these debates. I thank also my noble friend Lord Touhig for his tour de force. Now that I realise that he is the,
“seamstress-in-chief of stitch-ups”,
in the future I shall be sitting alongside him rather than in front him in case I fall foul of that.
I was delighted and honoured to secure this debate, and I was surprised because it is the first time that I have been successful in securing a balloted debate. When I put the topic down some three weeks ago today, I was astounded to be told on the following Monday that I had a date for this debate, and I was delighted. This is a really important topic, and all noble Lords who have spoken have shown a great appreciation of the complexity of the subject, as well as how tough this particular nut is to crack.
The coalition Government should be aware that if they come forward with pragmatic and sensible solutions that build on the very decent record of the last Government—an increase in affordable housing between 2000 and 2009 from 33,000 to 56,000 is a good achievement; it shows the steady progress made year on year—they will have unreserved support and encouragement across the House. If they cannot, the noble Baroness knows that we will harry her and hold her to account for it.
It simply remains for me to thank all noble Lords once again for contributing to the debate, and I beg leave to withdraw the Motion.