Finance Bill

Debate between Graham Stringer and Jack Dromey

Tuesday 2nd July 2013 Commons Chamber

[Jack Dromey]

What is happening for certain is that the country is paying the price of failure, with £245 billion more being borrowed because of it. Ultimately, it comes down to this: it is a choice between paying for the costs of failure and investing for success. All the evidence shows in transmission times that investing in house building is the quickest way to get a sluggish economy moving. It would build badly needed homes for people to rent or buy; it would put building workers back to work; it would create apprenticeships and hope for the nearly 1 million young people out of work; it would progressively bring down the cost of housing benefit; and, ultimately, reduce borrowing rather than increase it. That is the choice that the Government and the country now face: do we invest public money for failure or invest it to build for success?

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend is making a very powerful speech. Is it not the case that the £25 billion that goes into housing benefit supports rentier capitalism and not entrepreneurial capitalism? Would not that money be better invested in bricks and mortar? One of the solutions that the left and the Labour party have for this problem is to bring in rent controls. Does my hon. Friend agree that rent controls would help to bring down the housing benefit budget?

[Jack Dromey]

I would make two points in response. First, the single biggest factor that would make a difference is, of course, significantly increasing supply. What is so wrong about the Government’s approach is that it has been too much focused on demand and not sufficiently focused on supply. On the issue of demand, we have heard criticisms from the IMF, the Treasury Select Committee and others about the impact of Help to Buy on pushing up house prices, without necessarily seeing a significant increase in supply.

Secondly, we definitely need to look at a very different type of private rented sector for the future, where quality standards will be raised and where there will be longer-term tenancies and flexibility for those who wish it and security for those who need it. Index-linked rents, for example, could see people having predictable and more affordable rents. If we look at existing evidence of such longer-term tenancies with the indexation of rents, we find that tenants pay significantly less and landlords have a reliable income stream, so it works for good landlords and tenants alike. The time has come for a very different private rented sector in the future. Sometimes we refer to “the continental model” of security, affordability and higher quality, where people enjoy a higher status in a sector of choice—not what we have at the moment.

Millions of people will have waited for last week’s comprehensive spending review with hope, but their hopes have been dashed. What we had was hyperbole from the Chief Secretary to the Treasury. I have to say that I sat gobsmacked at his contribution. When it comes to writing the history of hyperbole, he will deserve a chapter of his own, as we have heard it all before. The simple reality is that this Government’s housing policies, like their economic policies, have failed and will continue to fail. Whether it be “First Buy”, “NewBuy” or “Help to Buy”, the British people know from experience that getting a decent home at a price they can afford and getting Britain building once again will ultimately mean sending this message to this Government at the next general election—“goodbye”.