Affordable Housing

Emily Thornberry Excerpts

Wednesday 4th March 2015 Westminster Hall

[Mr Mark Prisk (Hertford and Stortford) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests: I am an adviser to Essential Living.

I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on securing the debate. Ensuring that people can afford to live in a decent home is one of the top issues for many of our constituents, and rightly so. Despite the suggestion that all the evils in housing started in May 2010, the reality is that our housing markets have been dysfunctional for more than 25 years, so we have built far too few homes, rents and prices have risen, and thus we have this issue of affordability. That means that when the current Government came to power in 2010, they inherited a real mess. For my money, the classic illustration of that is the loss of some 420,000 affordable homes under the last Labour Administration.

Since 2010, good progress has been made, so during this Parliament we should see the fall in the number of affordable homes reversed and an increase of some 170,000. Just as importantly—I am sure that my hon. Friend the Minister will want to refer to this—the Government are now seeking to accelerate the increase in the number of affordable homes so that in just a three-year period we should see 165,000 additional affordable homes being built. That would, I think, represent the fastest rate of building in this sector for 25 years.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

The hon. Gentleman is rightly focusing on the idea of affordability. Can he help us by giving his definition of affordability? Does he agree with the Mayor of London’s definition of affordability, which is that 80% of market rent is affordable, or does he agree with me that that is simply nonsense?

[Mr Prisk]

It actually relates to the ratio depending on where someone lives and what their wages are. One problem for our constituents is that we talk about affordable housing with a capital A—the Affordable Housing programme—but most of them think about it with a small a, in terms of mortgage costs or rents, so we need to be very careful not to get caught in artificial terminology.

I welcome what my right hon. Friend the Prime Minister has said about building thousands more homes, including this week’s announcements on starter homes. That builds on a programme that I was able to start, the Help to Buy equity loan scheme, which has helped some 77,000 people. However, much more can be done, and I would like to make three suggestions. I suspect that colleagues will want to consider issues such as section 106 and planning gain, which I think is an area ripe for improvement and reform, but let me touch now on three other things.

First, we will get a sustained increase in the number of affordable homes built only if we focus on delivering a long-term framework for investment. When I took on the role of Minister for Housing in 2012, housing associations rightly complained to me that the rental and capital policies of Governments of all political persuasions had always been short term. They might be for two years, or there might be an understanding of what the policy framework would be for three years, but housing associations argued that a long-term approach was needed if development was to increase and then be sustained. That is why I pushed for and, I am pleased to say, secured both a 10-year rental policy and long-term housing guarantees from the Treasury to underpin the investment. That means that rental policy is now set all the way through to 2025, and that gives the housing associations and their lenders the confidence to build more and for longer.

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[Emily Thornberry (Islington South and Finsbury) (Lab)]

I congratulate my hon. Friend the Member for Nottingham South (Lilian Greenwood) on securing this debate on a topic that is important not only for my constituents but for people in the rest of the country. May I also declare an interest? I still own my late mother’s flat, and we have been renting it out to the same tenant since she died.

Many people misunderstand my constituency. It is in one of the poorest boroughs in the country, and 40% of my constituents live in social housing. We have a great mixture of people. The very rich, the very poor and people from all over the world rub shoulders. I have the smallest amount of green space of any constituency in the country. We all live on top of one another, and we quite like it that way. However, the housing crisis is fundamentally changing the nature of my constituency. The average house price in the UK is an outrageous £188,000, which makes it impossibly difficult for the average person to buy these days, but the average price of a house in my constituency is £665,275. Tomorrow, I will see some 12-year-old children at one of my local schools. They were born and brought up in Islington, and they are ambitious and looking forward to life. How on earth will any of them still be able to live in Islington in 15 years’ time? Why are we allowing that to happen? Why are we not doing something about it? It is simply unfair.

These days, not only the children of the poorest but those of the richest will be unable to live in Islington when they grow up, because our house prices have got completely out of control. I do not want my constituency fundamentally to change, and neither do the residents of Islington. We can see no reason why it should, and we think that radical housing change is needed to regulate the market. Some people in this Chamber and in this building will think, “Oh, my goodness. What is this, some form of Stalinism? We can’t start controlling the housing market.” Excuse me, but yes, we can. Most world cities have some form of housing regulation that goes much further than the pusillanimous attempts that have been made in recent years to control the housing market in London. We must start taking strong action to ensure that London people can live in London.

I do not have any problem with people from outside London wanting to come and live here. There is a great tradition of people from all over the world coming to live in Islington. However, do you know what is happening now, Mr Gray? I went to see a woman a couple of months ago who is living in a completely overcrowded council flat. She is busting out at the seams. Her husband runs a local café, and has done for 25 years. They are a good local family, and the kids are doing well. She said to me, “I have no idea where my kids are going to live. They are all grown up now. Where are they going to go? How can I help them to live in Islington? We want them to stay here. We are absolutely overcrowded, and look at that,” and she pointed at the enormous tower block that is being built on the canal nearby. It is called Canaletto, or something equally ridiculous. It is covered in fancy stone, and it reaches up into the skies. We all know that when it has been sold, the lights will be off at night because no one is going to live there. People across the world are investing in our housing market, which is not properly regulated. If they have a choice between investing their money in a few gold bars and saying, “Let’s buy a flat in London,” they will buy a flat in London, because it is nice and secure. They will keep it empty, warm and secure, and they will rob the people of London of somewhere to live.

[Mr Prisk]

The hon. Lady has set out some of the problems, and I understand them. Do I take it from her remarks that she wants to see rent control?

[Emily Thornberry]

Personally, speaking as a Back Bencher, yes, I do. I want to see rent regulation. An individual should be able to enter a tenancy agreement with a landlord for a long period of time—three, four or five years—at a set rate, which should increase only in line with inflation. We should not be able to treat people as they are being treated.

I believe that the private sector has an important role to play in meeting our housing need; I am not one of those people who do not believe in the private rented sector. However, we now have an entire generation of youngsters—some of them are our own children and our researchers’ friends—who move into properties and are exploited. They are asked to pay ridiculous amounts of rent. They make a home, but after six months or a year, perhaps because they have complained about the fact that their windows are leaking, they will be chucked out and they have absolutely no rights. We have to strike the right balance, and we must not give tenants so many rights that landlords are frightened off, but we are talking about people who want to be able to make a home in a community. For them to be able to contribute properly, they need some form of security. We should not allow them to be pushed out of our cities and our metropolises because rents are continually being hiked up.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Lady is talking about striking a balance. Does she agree that the acute problems that affect her constituents are of a different magnitude to the problems in the rest of the country? Affordable housing is a difficulty in the rest of the country, but not on the scale that she has outlined.

[Emily Thornberry]

I completely understand and agree. That is why when the Government talk about localism, I say, “Hooray! Let us come up with some local solutions to local problems.” However, when my local authority starts to introduce innovative schemes to try to address our problems, we are either trampled on by the Department for Communities and Local Government continually changing the rules and tightening up on section 106 agreements, which we are using as imaginatively and laterally as we can to build as much affordable housing as possible—in Islington, that has to be social rented housing if it is to be properly affordable—or we are trampled on by the Mayor.

The hon. Member for Hertford and Stortford (Mr Prisk) talked about publicly owned land, and the Mount Pleasant site in my constituency is one such cause célèbre. It used to be a massive piece of publicly owned land, which was owned by Royal Mail. When Royal Mail was privatised, the large site at Mount Pleasant was deemed to be a “car park”, so it was sold for a song. The developers now say on behalf of Royal Mail that, because it is a development site, they should be able to get huge amounts of money back, so they cannot possibly afford to put affordable housing on the land. There is a battle royal going on in my constituency about the matter. My local authority and Camden local authority both say, “We are in desperate need of real affordable housing, and this is one of the largest development sites in the area. Please, please, let us build homes for local people. Please don’t stop us.” And what happened? The Mayor came in and said, “What we mean by ‘affordable housing’ is 80% of market rent.” Guess what? Nobody in Islington can afford that. This is nonsense.

[Mr Spencer]

I am grateful to the hon. Lady for giving way; she is being generous with her time. May I take her back to her comments on property values in Islington? How would she seek to control the market? How would that work in reality? What steps would she like to see a Labour Government take to control the marketplace and control property values?

[Emily Thornberry]

No, I will not go back to that. I will carry on talking about Mount Pleasant for a minute, because it is a disgrace. The more we talk about it, the more we expose the difference in values between the Conservative party and local people and why the Mayor is trampling on local people’s wishes. The Mayor is the Tory party’s London representative, and he aspires to high places within the party. People should be warned about his agenda.

Some 681 new homes will be built on the Mount Pleasant site, and 163 of those homes will be affordable, at 80% of market rent, but the rest will carry the most ridiculous prices in which only people cashing in their gold bars in China could invest to be able to live there. We have 19,000 families on the housing waiting list in Islington who want to stay in Islington. If we could build 1,500 affordable social rented homes on that site, on the Canaletto site or on another such site, we could unplug our housing waiting list. People would then have a fighting chance of getting themselves a social rented home.

I will illustrate the sort of people on my housing waiting list. I never try to exaggerate. Whenever I make a speech, and I have made this speech many times over the past 10 years, I always talk about the very last person I met. In this case, the last person I met was a woman with three children. She has lived in so-called temporary accommodation for five years. She had polio, so her legs are in the most terrible state. She has 28 steps up to her front door, and she has fallen down twice and broken her leg. She now has to have a knee replacement. She has a child with special needs, and she is stuck in this accommodation. And guess what? She has also been hit by the benefits cap. She is in temporary accommodation, which costs £400 of the £500 a week that is available to her. She and her three children are living on £100 a week in entirely inappropriate accommodation. My local authority is doing its utmost to find alternative accommodation.

Frankly, if someone moves their car in Islington, we have built a flat there by the time they come back in the evening. We are building as much social rented accommodation as possible in the area, despite the Government having cut back the subsidy to local authorities and despite the Government making it so difficult for my local authority to stand up to developers and say, “We need social rented accommodation. That is what our local people say. We are the local representatives. Who are you? What is localism? Let us have our say.”

[Emma Reynolds]

Does my hon. Friend agree that the potential role of a progressive Labour Mayor would be to drive up the number of affordable homes on these big sites, rather than taking every opportunity to drive down the number of affordable homes, as the current Tory Mayor is doing?

[Emily Thornberry]

Absolutely, and I will give another example. Clerkenwell fire station is on the other side of the road from the notorious Royal Mail site, which was sold off for a song and out of which a huge profit is now being made. My local authority is attempting to constrain the Clerkenwell fire station site by saying that it must be used for affordable housing. We believe that best value does not just mean that a public body should squeeze as much money as possible out of a site by building as many luxury flats as possible. Best value for the community—this is a public asset in the middle of the community—ought to be what the public want and what will give best value to that community. Providing homes to my local community in Islington is best value as far as we are concerned, which we hope a Labour Mayor would understand. I will always give Boris Johnson the benefit of the doubt, and I will be completely converted if he comes back with this, but I want him to say, “Emily, I understand that ‘best value’ means affordable homes on that site, which means a large proportion of social rented accommodation.” I hope against hope, but I am always an optimist. You never know, Mr Gray; you never know.

I appreciate that I have taken a bit of time, so I will wind up, although there is much more that I want to say, as I am sure people can tell. The hon. Member for Hertford and Stortford said that there is no silver bullet, but there is. The reason we do not have affordable housing, whether in Northern Ireland, in his constituency or in London, is that we do not have enough homes. We have not been building enough homes, and we did not build enough when we were in government. We did a great deal of good, and we did up all the country’s social housing. We made all social housing conform to the decent homes standard, which was a fantastic achievement that we do not shout about enough, but we did not build enough new homes. We needed to build more.

It is all very well for the hon. Gentleman to carp about that, but, frankly, his party should look at the plank in its own eye. How much has his party built during its five years in government? Very little indeed. That is why we are in this crisis, and one thing on which we can all agree is that we must build more homes. We need to be brave and allow local communities to decide on the sorts of places that they need. The solutions that are appropriate for my constituency might not be appropriate for Nottingham or York. Nevertheless, we must drive local authorities and local people, so that we are able to give our younger generation a chance. My youngsters might not be able to live in Islington, and Nottingham youngsters might not be able to live in Nottingham, because they cannot afford to move into the sort of accommodation in which their parents lived. This is all about intergenerational justice, and we, the older generation, either have secure social rented homes or are buying our own places, but our youngsters have no chance unless we grasp the nettle and say, “Yes, we owe it to the youngsters in this country to start building more homes.”

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[Emma Reynolds]

If I cross the Floor of the House, as the hon. Gentleman suggested earlier, we will obviously inherit the current affordable homes programme, but we will make our plans for the future clearer in the weeks to come.

Even Westminster city council’s deputy leader, Robert Davis, has said that the policy

“threatens our capability to deliver much-needed housing in central London.”

His director of planning went even further and called it insane. The Housing Minister claimed that the reforms would not have a significantly adverse effect on the affordable housing programme, even though his own Department admitted that it had not done a formal assessment of the policy’s impact.

[Emily Thornberry]

There has been a side debate about what is affordable. In relation to house prices in Islington, may I add that social rented accommodation in Islington is set at 40% of market rent?

[Emma Reynolds]

The City of London has estimated that this policy will reduce its housing budget by a massive £8 million. It is clear that the Tory Mayor, as hon. Members have already suggested, is keen on driving down the number of affordable homes, particularly on big developments. My hon. Friend mentioned the Mount Pleasant development, which used to be public land. It has not been used to provide the number of affordable homes that we need, precisely because Boris Johnson has taken it upon himself to call in that application and force down—not up—the number of affordable homes on that site.

The Government have failed to live up to their promise of replacing homes sold through right to buy one for one. Since 2012, for every 21 council houses sold under right to buy, only one has been built. As my hon. Friend the Member for Nottingham South underlined in her contribution, the Government’s bedroom tax is not only a complete failure of a policy that hits the most vulnerable the hardest, but it has led to a rise in rent arrears and, in some cases, homes being left empty.

One or two such changes would have been bad enough, but the cumulative impact of the changes that the Government have introduced has meant that people across the country are struggling to find a home to rent or buy. Tragically, the lack of affordable housing is having a real impact at the sharp end. I have already mentioned homelessness and rough sleeping, but it is worth mentioning again that the lack of affordable housing is, unfortunately and tragically, driving the numbers up.

Housing will be a day one priority for the next Labour Government. It is true that the market has not been delivering for quite some time. There is a huge and pressing need to increase the overall supply of new homes. We have made it clear that, under a Labour Government, housing will be a priority for capital investment. We will reverse the watering down of section 106 and ensure that tougher rules are in place to assess viability, so that developers cannot dodge the rules. We will scrap the Government’s affordable homes avoidance scheme. We will make sure that we use public land to drive the development of affordable housing, and we want to see councils return to their historic role of building council homes. Wolverhampton city council is building the first new council homes in our city in more than 30 years. I am proud that Labour councils are building twice as many affordable homes as Tory local authorities.

There is a crucial role for housing associations. I am always grateful for the wise advice of the hon. Member for Hertford and Stortford. He suggests that I make sure that they have great stability going forward. I say to him that some of the biggest changes to the way in which housing associations operate have occurred under his Government. There has been a huge cut in funding, and the welfare chaos that we have seen has provided unstable and uncertain conditions for them to operate in. Unfortunately, the story of this Parliament has been an ever-rising need for affordable homes, but we have had a Government seemingly determined to do everything that they can to undermine the building of new, affordable homes.

I know that the Minister will get up and aggregate the numbers over a five-year period, but if the Government are so serious about building affordable homes, why did they cut the affordable homes budget by 60%? Why did they water down the definition of affordable? Why have they watered down the requirements on developers? Why have they changed the way in which viability is assessed? All those measures have led to the number of affordable homes, particularly those for social rent, going down. Only a Labour Government would have a comprehensive plan to tackle the long-term housing crisis by making the market more competitive and making sure that councils have the powers and flexibilities to build and provide the housing that we need.

[The Minister of State, Department for Communities and Local Government (Brandon Lewis)]

It is a pleasure to serve under your chairmanship, Mr Gray. My hon. Friend the Member for Hertford and Stortford (Mr Prisk) made some good points, as he always does, on how we built the foundations for the success we are seeing with house building. He should be proud. One point he touched on, which showed the Government’s ambition, was the public sector land that has been released, which is enough to build 100,000 houses. A few Members made that point, and I am pleased to announce that we have surpassed that target. When Members leave the Chamber, they will see that we have gone past 100,000 and set ourselves a higher target of 150,000 in the next Parliament.

I am disappointed that the hon. Member for Nottingham South (Lilian Greenwood) seems to lack real ambition. The Labour party generally seems to lack ambition compared with us on what can be achieved. The hon. Member for Cambridge (Dr Huppert) made a fair point on the ambition of what we should be delivering. I have often commented that setting targets can lead to unintended consequences and fictitious outcomes. We should be driving for the right outcome, which is homes that people can afford. The Labour party’s lack of ambition in wanting to hit 200,000 homes by 2020 is clear and evidenced by the fact that this Government’s programme, as we outlined this week, will hit 200,000 homes by 2017.

I hope to work with Jane Hunt in a Conservative Government. I visited her in Nottingham South, where she is fighting hard to ensure that we get even stronger Conservative representation in this place. She wants to be part of a Conservative Government who would build 200,000 homes for first-time buyers. Not only will we offer first-time buyers a chance to benefit from Help to Buy, which has allowed tens of thousands of families to get on to the housing ladder with a reduced deposit following the economic farce and crash that we inherited, but we will go further by giving them a 20% discount, making the achievement of buying a first home more open to more people.

[Emily Thornberry]

Has the money for those 300,000 homes been explained to us, or does it come from the same pot at the end of the rainbow as the £7 billion of tax cuts that the Conservatives have promised the public?

[Brandon Lewis]

The hon. Members for Nottingham South and for Islington South and Finsbury (Emily Thornberry) and I have spent many times at the Dispatch Box in the past few months in full agreement, so it is probably a healthy return to normal that we disagree today, but I suggest they go away and read some of the documentation before they come to this place and make comments that are absolutely inaccurate. For example, it is worth having a read of the Hansard transcript of the Communities and Local Government Committee sitting last week, where we made it clear that the right to buy programme is delivering on the replacement of homes in the way it was designed. There is an interesting contrast, because the replacement rate was 1:170 under Labour. Opposition Members should be very aware of that. It is important to understand that with the starter homes—it is clear in the documentation that the Government have put out—we are looking at making available land that has not been viable before. We are doing that without section 106 agreements and we are reducing regulation for developers so that they can offer those homes at a minimum discount of 20%.