Housing

Ian Mearns Excerpts

Wednesday 8th January 2014 Commons Chamber

[Hilary Benn]

I shall come to Help to Buy in a moment, but, yes, we have consistently said that we welcome measures that help people to buy, but there is a problem about supply and that is what this debate is about: the Government’s failure to ensure that enough homes are being built. The truth is we need to build a lot more homes as a country—roughly double the current rate. The question before the House today is not whether we are now seeing a rise in housing starts from the pitifully low level the Government have bequeathed themselves over the last three years. The question before the House today is: does the country have a plan that will see building on the scale required? Judging by the record so far, the answer is clearly no, and there is one bit of advice I suggest the Secretary of State takes, which he himself gave: he did at least have the modesty to put out one press release which was headed: “No complacency in the drive to build more homes.”

The Secretary of State should listen to the plans and proposals Labour have put forward about what more needs to be done. Let us consider affordable homes. What did the Government do? One of their first acts was to cut the affordable housing budget by 60%. [Interruption.] Indeed, it was the largest cut they made. We have tried to persuade them to use the proceeds of the 4G auction to build affordable homes and to listen to the International Monetary Fund calling for an infrastructure boost by providing more affordable homes. They have not done that.

I come now to the new homes bonus. The National Audit Office said there is little evidence that the bonus has significantly changed local authorities’ behaviour, and the Chair of the Public Accounts Committee says there is no credible data available to show whether it is working. Indeed, she has pointed out that the areas that have gained most money tend to be the areas where housing need is lowest and the areas that have lost most money tend to be those where the needs are greatest. That is a familiar story with this Government: whether it is local government funding or the new homes bonus, they like to take from those who are least well-off and give to those who are most well-off. What is more, the money that is taken from the least well-off goes to areas where in all probability the houses would have been built anyway, so in what sense is the new homes bonus

“a powerful incentive for local authorities to deliver housing”?

We know the new Housing Minister, the hon. Member for Keighley (Kris Hopkins), does not think it is an incentive because he told us so. On 25 November he told the House that

“the new homes bonus is not about encouraging people to build homes.”—[Official Report, 25 November 2013; Vol. 571, c. 11.]

That is what he said. If that is the case, what on earth is the new homes bonus for? Perhaps when the Secretary of State responds he could sort out the confusion in his own Department.

[Ian Mearns (Gateshead) (Lab)]

When the new homes bonus policy came in, my local authority in Gateshead literally did not know what to do with its new homes bonus. Because the new homes bonus was netted off because of any demolitions that had taken place, Gateshead got a grand total of £64,000. We literally did not know what to do with £64,000 to implement a housing policy in Gateshead.

--- Later in debate ---

[Austin Mitchell (Great Grimsby) (Lab)]

I congratulate the Secretary of State, as he departs the Chamber, on a brilliant knockabout performance that bore as close a resemblance to housing policy as my garden shed does to One Hyde Park. He emphasised what the Government have achieved, but they have achieved very little; what he gave us was a rehash of old figures.

We are facing a housing crisis that has been preceded by 30 years of housing neglect due to 18 years of disinvestment under the Conservatives and 13 years of inadequate investment under Labour, simply because there were other priorities at the time, such as education and the health service. We have since had four years of cuts and low-level production. Members have talked about levels of house building not seen since Stanley Baldwin’s time, but when the Government came into office, why did they not seize the opportunity to boost the economy by building houses, as was done in the 1930s—in Stanley Baldwin’s time—as a means of recovering from recession?

[Ian Mearns]

My hon. Friend is right that the previous Government did not build enough houses, but I echo the comments of my hon. Friend the Member for Blyth Valley (Mr Campbell) on the significant investment that went into the existing stock. My borough of Gateshead benefited from nearly £200 million as part of the decent homes programme to reinvigorate the existing stock.

[Austin Mitchell]

My hon. Friend is right. We did a good job on decent homes and a limited job on home building, but it was just not enough, given the scale of the problem.

Our present commitment is to build 200,000 houses, which I welcome. However, I argue that we also need a commitment to more public housing for rent. Let us talk not about affordable housing, because it never is affordable, but about public housing for rent, because that provides for the greatest need. Two fifths of the population—the figure is higher in some parts of the country, especially London—simply cannot afford to buy and cannot raise the money for a mortgage without long years of struggle or winning the national lottery. Those are the people who we need to help. We need a big build of public housing for rent to provide for their needs, and that is also needed to bring down the housing benefit bill, because the reason why it is now so high is that we have not built council and social housing, which is much cheaper to provide.

The Government’s proposals, inadequate and belated as they are, will make things worse because increasing the discounts on the sale of council houses means reducing the stock of available housing to meet people’s needs. That policy will certainly not generate enough revenue to pay for new building. We should have a rule that every council house sold must be replaced by a new one. If we had introduced such a sensible provision from the start, we would have maintained the housing stock.

The fact is that private sector build has not risen to 200,000 for many years. According to Shelter, its highest ever total was 175,000. We need a more public housing for rent, which we always had in the past. We could provide for that by removing the cap on local authority borrowing and channelling money into contracts to build. We could ease the situation—perhaps as with the Bank of England’s quantitative easing—by helping the housing associations, which currently face huge problems with arrears, largely because of the bedroom tax. They need help, so they must be allowed to revalue their stock so that they can raise money.

Contrary to what the Secretary of State said, all the evidence points to a need for a massive attempt to build public housing for rent, which would energise the economy and put people back to work. That is the only way out of a crisis resulting from 30 years of neglect and house building rates well below the target that we need, which is 240,000 a year.