Business and the Economy

Jack Dromey Excerpts

Monday 14th May 2012 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

Not one brick will be laid, not one home will be built, and not one unemployed building worker will be put back to work, because there was not one reference in the Queen’s Speech to housing, despite the grim reality that we all see in our constituencies. In our surgeries, there are ever-lengthening queues of people desperate for a decent home at a price that they can afford. They are people such as the mother from the Lyndhurst estate who came to see me to get out of an overcrowded flat where, because of the damp, her baby was for ever ill. They are people such as the unemployed building worker from Marsh lane with two young kids—a good family—who was desperate to get back to work, having been made redundant from the building industry twice in six months. They are businesses such as the small building firm in central Erdington that is on the brink of bankruptcy because it can no longer get contracts to build homes. One in four young people in my constituency is out of work. Some of the young people I met on the Castle Vale estate are keen on getting an apprenticeship in the building industry, but all of them believe that they have no hope.

Birmingham and Britain are suffering from a combination of problems. We have the biggest housing crisis in a generation. There is rising unemployment, with more than a million young people on the dole. We have a double-dip recession, made in Downing street—the first in 37 years—not least because of the 4.8% collapse in construction over the past three months. Benefit bills and borrowing are booming—the costs of failure. This is an out-of-touch Government with a miserable track record of causing misery on a grand scale. They are making the housing crisis worse by the day, but fail to recognise that the best way to build Britain out of recession is to invest in badly needed house building.

Let us look at the Government’s track record. House building is down. The Minister for Housing and Local Government said:

“Building more homes is the gold standard upon which we shall be judged”,

yet house building has fallen by 11%. Under Labour, there were 2 million new homes built; under this Government, in the past three months alone, public house building has gone down by nearly 11%. Homelessness is up. The same Minister said:

“Homelessness was what brought me into politics”,

yet there has been an increase of 14% in the number of families reporting themselves homeless, and an increase of 23% in rough sleeping. Under Labour, homelessness fell by 70%.

We have a mortgage market from which people cannot get mortgages. The Secretary of State says:

“I well remember buying my first home. The sense of ownership, pride and independence. I want more young families to be able to experience that”,

yet home ownership, under that Secretary of State, is down by 75,000. The prediction is that an unassisted first-time buyer will now be 44 before they can get a mortgage.

The private rented sector is rapidly growing in size and is about to overtake the social sector. There are many reputable landlords but too many rogues, characterised by ever-increasing rents, yet the Prime Minister stood at the Dispatch Box and said that we have seen rent levels go down, despite the fact that the Government’s own figures show that rents have risen by 3% in the private sector in all nine English regions and in 89% of local authorities.

What we are seeing is a combination of monumental mistakes of economic management on the one hand, and grotesque unfairness on the other—monumental mistakes such as that made by the Chancellor back in October 2010, when he cut £4 billion overnight from housing investment. That led to a 99% collapse in affordable home building. As for grotesque unfairness, the 2011 figures for the new homes bonus showed that an area of high need and high unemployment such as Knowsley would get 37p per head, but the City of London would get £28 per head.

The country desperately needs homes, jobs and growth. That is exactly what a Labour Government did at a time of economic crisis—the bankers crisis back in 2008. Because we knew that we had to grow the economy and meet housing need, our kick-start programme saw 110,000 homes built and the creation of 70,000 jobs and 3,000 apprenticeships. The industry has said to me time and again that it was that kick-start programme which sustained it against what would otherwise have been collapse. That is why we propose, rightly, a repeat of the bankers’ bonus tax which could see 25,000 homes quickly built and jobs created for 100,000 young people. We also propose a temporary cut in VAT on home improvements, which would result in better homes, people employed in improving those homes, and jobs and wealth being created along the building industry supply chain.

In conclusion, there is a dramatic contrast between the politics of hope and the politics of despair. Labour represents the politics of hope. That is why the newly elected Labour council in Birmingham has committed itself to building 70,000 homes—an ambitious objective, but it is determined to meet housing need and to help build Birmingham out of recession. Stories of despair, on the other hand, are numerous, but let me tell one. A young woman who appeared recently on the Today programme wishes to remain anonymous, but I know who she is and I have spoken to her in some detail.

As a consequence of the collapse in affordable house building in London, soaring rents in the private rented sector and the Government’s benefit changes, this young woman was suffering the unimaginable. She had been married to a banker. Their marriage had broken up but they had remained close. Tragically, he died. She then lost her home. Her daughter was distraught. The mother needed her own mother to look after the granddaughter through a desperately difficult period for that family, but having been made homeless and ending up in temporary accommodation, she got a phone call on a Tuesday—she lives in Waltham Forest—saying, “We need you to go to Walsall tomorrow, Wednesday.” She was in despair over what was happening to her. She could not believe it. She said, “Me and my husband, all along we thought that the Government would stand by us at our time of need,” and they abjectly failed to do that.

The Government were warned against the consequences of their action from within Government. They chose to go down this path. Any Government who inflict pain on a citizen of this country in that way ought to be ashamed of themselves.