Budget Resolutions and Economic Situation

Heidi Alexander Excerpts

Monday 13th July 2015 Commons Chamber

[Heidi Alexander (Lewisham East) (Lab)]

I congratulate the hon. Member for Chippenham (Michelle Donelan) on an excellent and engaging maiden speech.

It will come as no surprise to you, Mr Deputy Speaker, that last week’s emergency Budget was not the one that I wanted to hear. It was not the one that many of my constituents wanted to hear either. Although I welcome plans to abolish permanent non-dom status, to fund the NHS and to expand apprenticeships, I cannot say the same for the Government’s rebranding exercise on the minimum wage, the ending of maintenance grants for less well-off students, and some of the changes to tax credits, which are a lifeline for many people in low-paid work.

I wish to focus my remarks on a subject that barely made it into the Chancellor’s speech last week: the supply of new, genuinely affordable homes. Access to affordable housing is the single biggest concern of my constituents. During the election campaign, I lost count of the number of people who spoke to me about their housing problems. There were the young mums outside primary schools in Catford who had been placed in temporary accommodation three hours away from their children’s school; the professional couple in Hither Green who had been renting for years and were simply unable to buy because of the soaring costs of London homes; and the nurse in Blackheath who rents a room in a flat because she cannot even afford a shared ownership property.

The housing market in my south-east London constituency is broken. It may not seem broken to the private landlords, the property developers or the rich overseas investors, but for the vast majority of Londoners, the capital is in the grip of an all-too-real housing crisis —and, let us be honest, it is a crisis. It is a crisis that has been long in the making, but one that deepened under the previous Government. Small changes to the tax relief on buy-to-let mortgages, while welcome, do not amount to the concerted action required from Government on land, on finance and on planning to solve this problem. I wish to speak about the first two of those.

In the past decade, London’s population has grown by 1 million. It will grow by another million over the next 10 years. If the country’s economy is to do well, London needs to do well, and for that to continue we urgently need to get to grips with the capital’s housing problems. The Government must wake up to the fact that homes need to be built where there is most demand for them and where genuinely mixed and sustainable communities can be created. Automatic planning permission on brownfield sites is not the answer. We want places where people will want to live, can afford to live and which will stand the test of time.

When the Chancellor spoke at the launch of the London Land Commission earlier this year, he said that there was nothing inevitable about London growing. He was right about that and he was right to set up the commission with the express purpose of identifying public land for housing development. But the commission cannot just be about high-rise designer apartments on the River Thames; it must be about homes for Londoners. Tackling the under-supply of genuinely affordable housing in London is not a regional priority; it is a national one. The London Land Commission should be identifying public land not so that it can be released to the highest bidder, but so that it can be used to build homes in which Londoners can afford to live.

The Government’s so-called affordable housing, which is let at 80% of market rent, is not affordable to anyone on near-average incomes. All those central London hospital sites, which the Government are so wrongly intent on flogging off, should not become a “reserve currency” for the rich and international jet set—somewhere safe to park their money. Public sites should be used to provide homes for people who keep our city running—our nurses, teachers, policemen and women, shop workers and office cleaners. London will always have hundreds of thousands of people doing those jobs. Many of those jobs will never be the best paid, but those who do them need somewhere secure, accessible and affordable to live. Half of all homes built in London over the next decade should be built by councils and housing associations and be let at 50% of market rent.

Hundreds of thousands of the lowest-paid workers currently live in private rented accommodation in London. Their wages are topped up by in-work housing benefit, which goes straight to the landlord. These people do not live a life of luxury. They often live in relatively poor-quality housing, and worry about the threat of eviction. We, the taxpayer, pay their landlords—via housing benefit—so that they can live in this state of uncertainty. It makes no short-term sense for the individual and their family, and it makes no long-term sense for the public purse either.

In Lewisham, the annual difference paid in housing benefit on a two-bedroom council flat and an equivalent flat in the private rented sector is nearly £9,000. If just one extra family in receipt of full housing benefit in a two-bedroom flat in Lewisham were rehoused in a council home, the revenue saving to the public purse would be £9,000 a year. That is a £9,000 saving for one household in one flat in one of London’s 32 boroughs. Housing benefit is paid on more than a quarter of a million private rented properties in London, costing the taxpayer £2.6 billion each year, up half a billion pounds since 2010.

Every single taxpayer in the country should be interested in the amount of social housing in London. When I came to this House five years ago, I said that one of my priorities would be tackling the chronic under-supply of affordable housing in London. It is clearly not a priority for the Government, but I will not rest until they make it so.