Housing

Geraint Davies Excerpts

Wednesday 8th January 2014 Commons Chamber

[Hilary Benn]

I am very grateful to my hon. Friend for putting the record straight. Perhaps I should have trusted my initial judgment and not given way to the hon. Member for Perth and North Perthshire (Pete Wishart).

[Geraint Davies (Swansea West) (Lab/Co-op)]

Is my right hon. Friend aware that the Tory Government have in fact cut the capital budget for Wales by 40% and obviously one cannot build more houses with less money?

[Hilary Benn]

That is an extremely good point and it matches what the Government have done in relation to England, which I shall come to in a moment.

The Government said that they wanted to prevent homelessness, but what has happened? It has risen every year under this Government and rough-sleeping is up by nearly a third since 2010. House prices, which my hon. Friend the Member for Hammersmith (Mr Slaughter) mentioned a moment ago, are racing ahead of earnings. They are up 8.4% in the last 12 months according to Nationwide and up 15% in London, and today it takes the average family over 20 years to save a deposit for a house. If we are talking about records, that figure in 1997 was three years, so no wonder the rate of home ownership is falling. Therefore, it is not really working, is it?

--- Later in debate ---

[Mr Pickles]

I will give way in a few moments. Would it be possible for me actually to say something before the hon. Gentleman intervenes?

Once upon a time, the last Labour Prime Minister, advised by the current Leader of the Opposition and shadow Chancellor, announced that he had abolished “boom and bust”. It was a debt-fuelled illusion of a boom, resulting in the biggest budget deficit in our peacetime history and a crash that devastated the housing market—all that was on Labour’s watch. Let us cast our minds back to 2008—

[Geraint Davies]

rose—

[Mr Pickles]

I am sure that the hon. Gentleman can remember 2008. The then Housing Minister, the right hon. Member for Don Valley (Caroline Flint), was photographed outside Downing street with her speaking notes. No doubt the right hon. Member for Leeds Central was in the Cabinet and waiting to be briefed. This is what her notes said:

“Housebuilding is stalling…New starts are already down 10% compared to a year ago. Housebuilders are predicting further falls.”

The notes also said:

“We can’t know how bad it will get.”

We know now that it would become far worse.

[Geraint Davies]

Will the Secretary of State confirm that lending from banks for mortgages now is at the 2008 level but lending from banks to business and construction is 30% down, which is why house prices are escalating out of control and real wages are falling through the floor? When interest rates go up in a couple of years there will be a burst of the housing bubble and sub-prime debt.

[Mr Pickles]

The hon. Gentleman needs to look a little outside London given where he represents. He could even look in some parts of London. Newham, for example, saw a drop of just under 1% in house prices. If we take out the London figures—figures for parts of London can be very spectacular—and look at the rest of the country, we will see that the increase in house prices has been very modest indeed. Not even in London have the figures reached where they were in 2007, so to talk about a housing bubble is ridiculous.