Budget Resolutions

Ed Miliband Excerpts

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

[Edward Miliband (Doncaster North) (Lab)]

I am glad to follow the right hon. Member for Putney (Justine Greening). I want to focus on housing, which was where she ended her remarks. In particular, I want to focus on what the Secretary of State said in his opening speech, which is that this is the biggest domestic policy priority for the Government.

We should begin with a moment of candour. If we are looking across the piece at policy failures of Governments of both parties, we can see that this is the biggest single failure over the last generation. I am proud of some of the things that the previous Labour Government did, but we did not build enough homes, and this Government have not done so either.

I am serving on a social housing commission run by Shelter. It comprises residents of Grenfell Tower and people from across the political spectrum, such as Baroness Warsi and Lord O’Neill from the other place, and is precisely designed to try to fashion a new cross-party consensus on these issues.

Reading the Budget, I was encouraged by some of the measures in it. It mentions the broken housing market, to which the Secretary of State also referred today. I must confess that I am old enough to remember when such talk was part of living in a Marxist universe, but it is genuinely good that things have changed. It is a positive step that the Government have lifted the local authority borrowing cap, and indeed that they are providing housing associations with some money to build. They say that their measure on council house building will mean that 10,000 council homes are built each year, and that the housing association measure will lead to 13,000 being built over three years. The question at the heart of any analysis of this Budget on housing is: is that enough? I argue that it is not nearly enough.

Let me provide some context to this. The Secretary of State said that he wanted to be like Macmillan. Indeed, I think all of us can praise what Harold Macmillan’s Government did. Let me tell the House about the scale of building in that era. The 1951 to 1955 Government built an average of 193,000 social homes each and every year. That is more than this Government have built in the last seven years. Each and every year, the 1955 to 1964 Government built 116,000 homes, the 1964 to 1970 Government built 143,000 homes, and the 1970 to 1979 era saw the building of 116,000 homes. We are way off that.

[David Morris]

Does the right hon. Gentleman not agree that the Macmillan era was post-war, when Britain was bombed out and we had the Marshall fund to back us up?

[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.

[Several hon. Members rose—]