Budget Resolutions

Clive Betts Excerpts

1st reading: House of Commons
Thursday 1st November 2018 Commons Chamber

[James Brokenshire]

I am very conscious of the particular issue the hon. Lady highlights to the House, and indeed I greatly appreciated the opportunity I had to meet her constituents, to hear their stories and to hear about the impact the devastating incident has had on that community. I am still considering what the options are, to see how the regeneration can be provided and work can be conducted with the local authority, so I very much look forward to continuing to remain in discussion with the hon. Lady on what I know is a very serious and significant community issue.

[Mr Clive Betts (Sheffield South East) (Lab)]

Will the Secretary of State give way?

[James Brokenshire]

I will give way to the Chair of the Select Committee.

[Mr Betts]

Obviously the £650 million for social care is welcome, but does the Secretary of State accept the Local Government Association figures that the gap next year is actually £2.6 billion? Has he any concerns at all about comments from leaders in East Sussex, Surrey, Somerset and Lancashire, all Conservative county councils, that they are facing a cliff edge that they are likely to fall over at some stage unless the Government take more dramatic action?

[James Brokenshire]

There has been a recognition of the important step that has been taken in the Budget with the additional funding provided for adult and children social care and how that will make a difference. I will of course look carefully to the future in discussions I will have, through the spending review, on long-term financial support for our local government sector, the innovation and real value I see in local government—what it delivers for our local communities—and I will remain a proud champion for local government. But, as I said, local authorities also have a huge role to play in helping us to build the decent, affordable, secure homes that families and communities so desperately need and deserve. As the Prime Minister has said, this is our biggest domestic priority.

--- Later in debate ---

[Edward Miliband]

I will get to the question of funding and whether it is an investment in the future. The figures I have read out are actually flattering to the era since 1979. I am genuinely saying that this a cross-party failure, because under the right to buy we have sold off 2 million homes since 1979—far more than we have built.

The question is, what do we do? My argument is that this is not just about a change in policy. It is actually about a change in the whole philosophy on social housing. I argue that there are three principles that have been in effect since ’79 and need to be replaced. These principles were brought in by the ’79 Government, but have not fundamentally changed.

The first principle is that the market will provide; the market will build. We know from experience, despite the many efforts of different Governments, that the structural barriers in the market such as developers, incentives to build for the high end of the market and the cost of land mean that the market will not provide sufficient housing at the scale and speed required. There is no historical evidence to suggest otherwise. Indeed, the figures show that it is not in the private sector that the failure to build is most pronounced compared with the 1970s; it is actually in the social housing sector.

The thing that we have all missed is that the social housing sector is the bedrock of an effectively functioning housing market. In other words, it does not just benefit those who live in social homes. It benefits everybody, because it is more likely to keep prices down and avoids some of the problems that we see in the private rented sector. The Government have to be fair and recognise—at least at the level of principle—that saying the market will build will not cut it any more, and that the Government need to play a substantial role when it comes to building.

[Mr Betts]

My right hon. Friend is making a valuable point. I think it was the last Housing Minister but four—now the Prime Minister’s chief of staff—who accepted that social house building provides continuity to the construction industry, as it does not go up and down with the cycles of the private sector. That is very important for maintaining skills in the industry in the long term.

[Edward Miliband]

My hon. Friend makes an important point.

The second principle is that we need to acknowledge that the Government have come to see social housing as a residual for the neediest in our society, but that was not the origin of social housing. It was a tool to meet the needs of middle and lower-income families. That is particularly relevant today, given that 2016 figures from Shelter show that 78% of private renting households cannot afford to buy, even with Help to Buy. Why should the choice for those families be confined to the often substandard and highly expensive private rented sector? They should have a chance of social housing too. As one of my fellow Shelter commissioners—who happens to be a Conservative—puts it, we need to think again of social housing as meeting aspiration and need. That is a fundamental change, but it was part of the original vision of everyone from Nye Bevan to Harold Macmillan.

The third principle relates to the intervention by the hon. Member for Morecambe and Lunesdale (David Morris)—the question of where we put our money. Essentially, the choice that has been made since Lady Thatcher has been to put money into housing benefit and various subsidies including Help to Buy. What we have again missed is that investing in housing is investing in an essential part of our infrastructure. Dare I say it, it is as much a part of our essential infrastructure as transport—including High Speed 2—or schools and hospitals, and it is value for money because of the return on that investment.

In case hon. Members do not take my word for it, they can listen to Lord Porter, the Conservative chair of the Local Government Association. I have only just discovered Lord Porter—an important discovery. On Monday he proposed that we build not 10,000 but 100,000 social homes a year, saying:

“The gains are enormous. Investments in social housing could generate returns up to £320bn over 50 years, helping countless families along the way by creating local jobs and building homes people need and can afford.”

The reason I talk about those principles is that they drive the scale of the response. If we recognise the principles of the limits to the market, who social housing should be for and the that fact there is a return on investment—that to borrow to invest in social housing is a sensible move for the country—we will be led to a much bigger response than we saw in the Budget. As I said, it is good that the Government have changed course in a number of respects, but this is an era for boldness, not incrementalism, and I am afraid that the scale of boldness required is not in the Budget.

I will end by discussing why this really matters. It is actually about Brexit—I am sorry about that. The vote to leave was in part a cry of pain about the loss of hope and the loss of a sense of community. We should not idealise the past, but social housing was absolutely part of that. But this is not just about nostalgia. It is about whether people’s kids and grandkids will have a better life. And here’s the thing: in a world and a country where we seem divided on everything, this issue unites remain voters and leave voters, young people and old people, people in the south and people in the north. Whatever happens with Brexit, we need to bring the country together. I can think of nothing more likely to unite people across the divides than long-term investment in social housing, but it needs to be at scale. Incrementalism is not enough; we need a bolder offer. It is there in our history, from Bevan to Macmillan, and we need a Government who will discover it.

--- Later in debate ---

[Mr Clive Betts (Sheffield South East) (Lab)]

As I understand the overall spending figures in the Budget, apart from for the NHS, there is no real-terms increase in spending. If we have austerity this year and no increase in spending next year, how can austerity be ending next year? That is a fairly obvious question; perhaps someone on the Government Front Bench can answer it.

Local government has had more spending cuts than any other area of the public sector since 2010. We have a situation where the Local Government Association says there is a £2.5 billion funding gap for social care, and the Government are proposing in this Budget to put £650 million into it, leaving a £2 billion gap. In other words, constituents up and down the country will find more cuts to their social care services next year. That is inevitable.

There are not only problems with social care. Because councils are having to find more and more from their budgets to fund care for the elderly, people with disabilities and looked-after children, they are having to spend less and less on other important services—for example, parks and open spaces, which are really important, or doing food inspections of restaurants and takeaways, which some local authorities have now given up completely. The money for the high street is welcome, but where are the local authority officers who will do the local plans and the regeneration schemes that will put the money to good effect? The challenges of rogue landlords and increasing homelessness require local authority officers. Cuts are being made there, so there will be less money for those services also.

In my city of Sheffield, those national figures translate through. We will probably get an extra £4.6 million for social care on a one-off basis—it will not continue—but the current spending gap in the city’s budget for next year is £35 million. By 2020, the council will continue to have to use reserves on an unsustainable basis. Sheffield is not in as bad a position overall as many Conservative county councils, which are already saying that if something urgently is not done, Northamptonshire will be the first council to go over the cliff edge, and others at some stage will follow. That lesson really ought to be learned by Ministers.

It is not just local authorities that are left with problems in this Budget. Where is the money for schools? There is not a single mention of the revenue budget for schools. I had an email from Simon Smith, the chair of governors at Woodhouse West, which is a primary school in a relatively deprived part of my constituency. He said:

“Year on year reductions in funding, coupled with rising staff costs, are meaning that the school is moving… to submitting a deficit budget this financial year; followed by increasing six figure deficits in future years.”

He draws attention to the fact that the challenges are not just inside schools. More and more parents in that sort of community are coming to the school with problems and difficulties that used to be addressed and helped by other agencies, but those agencies have now also had their funding cut, so parents are relying on the school even more to help them in that situation.

Where is the money for the police? There is not a single penny for our neighbourhood policing. We have excellent neighbourhood policing in my constituency. The two inspectors who have dealt with it over the years—Dave Struggles and his predecessor, Jason Booth—have been brilliant, but they will say that with only three quarters of the officers they had in 2010, they cannot keep people as safe as they used to. That is the simple reality that we have to face up to and that the police are having to face up to.

I welcome the lifting of the housing revenue account cap. We recently had a conversation in the Communities and Local Government Committee with the Minister for Housing, the hon. Member for North West Hampshire (Kit Malthouse). The challenge for local authorities will be not merely to build the 100,000 homes that I hope we will see eventually, but to keep up the standard of homes that the last Labour Government brought in with the decent homes standard and to improve on that standard. Again, the revenue costs of that are nowhere addressed in this Budget.

The Prime Minister promised that austerity was over. The Chancellor said that austerity was coming to an end. The reality for my constituents is that not only has austerity not ended, but the end of austerity is not even in sight.