Housing

Clive Betts Excerpts

Wednesday 8th January 2014 Commons Chamber

[Hilary Benn]

I give way to the Chair of the Select Committee.

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

Given that the Help to Buy scheme is such a major plank of Government housing policy, does my right hon. Friend not think that the Government should have made a detailed assessment of its likely impact on house building and house prices before introducing it? When the Treasury Select Committee asked officials from the Department for Communities and Local Government about that in November, they said that it was not a matter for them; they said it was a matter for the Treasury. When asked whether any officials at DCLG had had any discussions with Treasury officials about the impact of the scheme, they said no. Is not that a complete dereliction of duty on the part of DCLG with regard to this important policy?

[Hilary Benn]

I agree; my hon. Friend is absolutely right. We have called on the Bank of England to look into the operation of the Help to Buy scheme now, rather than in a year’s time, precisely so that those points can be taken on board.

I want to move on to discuss what else could be done to get the land, the finance and the planning consent required to build more homes. Ministers seem to argue that nothing is really wrong with the way in which the land market is working. I have to say to the Secretary of State that we disagree. The planning Minister, in his latest written answer to me, has said there are more than 523,000 units with planning permission, of which 241,500 have not yet even been started on site. That represents a lot of homes that could be built, yet companies are sitting on the land, with planning permission, waiting for it to increase in value and not building on it.

The Office of Fair Trading looked into this matter and found that strategic land banks, including optioned land, were worth 14.3 years, which is about enough land to build 1.4 million homes. That is why we think it perfectly reasonable for communities that have given planning permission to say to those who sought it, “Look, will you please get on and build the homes you said you wanted to build? And if you don’t, then after a time we will start levying a charge. After all, if you had built them, we would now be getting council tax revenue. In the most extreme cases, we will use compulsory purchase powers to take the land off you, with the permission, and sell it to someone else who will build the homes.”

I know that Ministers spluttered into their Cornflakes when we announced that policy, and that the Mayor of London described it as a “Mugabe-style” land grab, but I would gently point out that among those who support the idea of charging when permission has been granted but no houses have been built are the International Monetary Fund and someone who goes by the name of Boris Johnson, who, when I last checked, was the Mayor of London. Moreover, the planning Minister once called for a tax on land to “deter speculative land banks”. The hon. Member for Rossendale and Darwen has also spoken up in favour of the proposal, and the hon. Member for Stratford-on-Avon (Nadhim Zahawi) has tried to claim it as a Conservative idea. With such illustrious backing, how could Labour’s proposal be anything other than a very good plan indeed?

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[Mr Pickles]

I am most grateful to my hon. Friend for that. Our long-term economic plan is helping to pay off the deficit, keep interest rates down and let the housing market recover.

[Mr Betts]

rose—

[Mr Pickles]

Of course I will give way to the hon. Gentleman, but just let me make a little bit of progress.

According to the Office for National Statistics, house building is now at its highest level since 2007, based on new orders in residential construction. House building starts in the last quarter were at their highest level since 2008. The National House-Building Council agrees, with new home registrations at their highest since 2008. The Royal Institution of Chartered Surveyors has declared that

“every part of the country has reported growth since the beginning of the market crash six years ago.”

Contrary to the Opposition’s motion, statistics on net housing supply show that 400,000 more homes have been delivered in the first three years, which is in line with figures before Labour’s housing crash.

[Mr Pickles]

Basically, if the right hon. Gentleman walks through the door of Eland house and embraces Stanley Baldwin’s figures, he will find that it takes a wee while to start to make progress. He should congratulate the Government on what we have been doing to get the thing going again, and it is a matter of some pleasure that that is the case.

[Mr Betts]

rose—

[Mr Pickles]

I will give way to the distinguished hon. Gentleman in a moment, but I would like him to consider that brick makers stayed at work over the Christmas period—very unusually—to catch up with demand for bricks to build new homes. Including empty homes being brought back into use, the new homes bonus has made available more than half a million more homes to buy and rent. I must say that I have, after a fashion, become attached to the right hon. Member for Leeds Central [Interruption.] I am not pleased. I am worried about what will happen when he returns to Leeds, because he has been talking about the new homes bonus. He has been saying that it is going to all kinds of places, but which authority is in the top 10 for the receipt of new homes bonus? Which authority is at number six and challenging for the top position? Yes, I am talking about Leeds metropolitan authority. The right hon. Gentleman is sticking his nose up at the prospect of the people of Leeds receiving £27.2 million.

[Mr Betts]

The Secretary of State will remember his visit to the Select Committee just after the Government were formed. I asked the then Housing Minister, the right hon. Member for Welwyn Hatfield (Grant Shapps), whether success for the Government, when they are eventually judged on their record,

“will be building more homes per year than were being built prior to the recession, and that failure will be building less.”

The right hon. Gentleman said:

“Yes. Building more homes is the gold standard on which we shall be judged.”

My right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) has just said that we were building more than 200,000 homes a year before the recession. When will the Government hit their own targets and hit that figure?

[Mr Pickles]

Well, as we leave behind the ghost of Stanley Baldwin bequeathed to us by the Labour Front Bench, the figures demonstrate that we are really starting to move. The hon. Gentleman should be rejoicing in the fact that our policies are working.

In the 2005 manifesto, the previous Labour Government pledged that there would be 1 million more home owners. In reality, home ownership fell by more than 250,000. Yet the aspiration of home ownership has returned. According to the Bank of England, mortgages to first-time buyers are at their highest level. Both the Council for Mortgage Lenders and the Halifax report the same. Thanks to the action taken to tackle the deficit, we have kept interest rates down. The number of repossessions is at its lowest level for five years and continues to fall. The Bank of England reports that the number of new mortgage arrears cases is at its lowest quarterly level since its records began.

--- Later in debate ---

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

If people listened to Government Members, they would not think there was a housing crisis in this country—but there is, because there are people who come to my surgery who cannot get a home to live in or who cannot get a home that they need. They cannot afford the rising prices or the rising rents. That is this country’s housing crisis.

I challenge the Secretary of State with the comments made by his then Housing Minister to the Communities and Local Government Committee three years ago, when he said that the “gold standard” on which the Government would be judged was building more homes than were being built before the recession. The Government have been building about half the number of homes that were built before the recession. However they choose to dress up the figures, they have failed by their own standards.

As some of my colleagues have said, that is not a terribly hard standard to meet, because the Labour Government did not build enough homes. We built more homes than this Government are building, but we did not build enough. We had a brilliant record on the decent homes programme and on putting right the wrongs of the underinvestment of the previous Tory Government, who allowed the stock to deteriorate, but we did not build enough homes.

[Yasmin Qureshi (Bolton South East) (Lab)]

The Labour Government spent £18 billion in 1997 to sort out 1.5 million homes.

[Mr Betts]

Absolutely, and that brought great delight to many tenants up and down the country.

The Government can pray in aid the fact that with the fallout from the banking crisis the private housing sector in this country suffered a decline in demand, but they compounded the problem by cutting the social housing budget by 60%. The right hon. Member for Hazel Grove (Sir Andrew Stunell) was at that time a Minister in the Government who allowed that to happen, and he should stand up and apologise for it. The reality is that the cut was 60%. Government expenditure as a whole was cut by 20%, but social housing capital expenditure was singled out for the biggest cut of all major Government programmes, which has compounded the problem.

I welcome the Labour leadership’s commitment to move towards building 200,000 homes in this country by 2020. That is a good commitment, but I want to see it go further in the longer term: we must get to 250,000 to get demand and supply back in sync. The reality is that the construction industry in this country is now in such a mess that it could not respond more quickly to a higher target: prices of bricks and labour are already going up in the industry, because it has got down to such a low level. It is therefore realistic to set that target.

The issue is that the private sector in this country, as has already been said, has never built consistently more than 150,000 homes. If we are to get up to a figure of 200,000, a large part of that must come from the social housing sector, from local authorities and housing associations. To enable that to happen, we will have to spend some public money. We must all recognise that: if this is a crisis that is a priority for us to deal with, some public expenditure will have to go in as well.

I hope that we can get to a general situation in which we recognise that to achieve the stabilisation of house prices and rents, as has happened in Germany, housing supply has to meet housing demand in the long term. To achieve that will require the sort of cross-party agreement that we had in the 1960s and 1970s, when successive Governments of different political persuasions built the homes that the country needed. I hope that we can get back to such a situation.

I want to refer to my Select Committee’s 2012 report on “Financing of new housing supply”, in which we considered and proposed the idea of a housing bank, with guarantees for institutional investment to go into the social housing and private housing sectors. I recognise that the Government have gone a little way towards that, but not sufficiently. That has been done in the Netherlands; why can we not do it here? Instead of giving guarantees for mortgages, let us put them into building homes.

We could take the cap off local authority borrowing, and 60,000 homes could be built immediately. I think that that has cross-party support in the House, so why do the Government not do that? It would not cost any more taxpayers’ money, and it could be done instantly.

We could look at the housing grant paid to housing associations, which lies on their books as a debt. If it was released tomorrow and that grant was written off—again, there would be no cost to the Treasury, because it has already been paid out—we could free up housing associations’ ability to borrow and build more homes as well.

We could look at self-build, which is the hidden element in a potential housing renewal. The Government could go to see what has been done in the Netherlands, where there is not so much self-building as self-constructing, which involves getting local authorities to lay out sites and getting planners involved on a simple basis. They could go to see how people in the Netherlands, often with the involvement of small builders, are building their own homes—the homes they want, because they have designed them—at about 80% of the cost of a house bought from a private developer. That could be another element.

There is no one silver bullet, but the report includes several measures which, if the Government implemented them straight away, would help to remove the immediate problems of the housing crisis and set us in the right direction.