Jack Dromey
Main Page: Jack Dromey (Labour - Birmingham, Erdington)(11 years, 8 months ago)
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Jack Dromey (Birmingham, Erdington) (Lab)
I beg to move,
That this House notes that England faces a housing crisis; further notes with concern that housing starts, including for affordable housing, are down, and that homelessness and rough sleeping have increased under this Government; further notes that the collapse in house building and contraction in construction are a major cause of the double-dip recession; believes that the Government needs to take urgent action to get the economy and house building going again; and calls on the Government to introduce a tax on bankers’ bonuses to fund the building of 25,000 additional affordable homes, to bring forward infrastructure investment, including for housing, and to cut VAT on home improvements, repairs and maintenance to five per cent for one year to help homeowners and create jobs.
Let me start by welcoming the new Housing Minister, the hon. Member for Hertford and Stortford (Mr Prisk), to his post. It is a really important job, and I am sure he will bring to it much-needed skill and insight, and I sincerely hope he will also bring a new sense of understanding and urgency. My experience from dealing with the hon. Gentleman is that he is a modest man, unlike his predecessor, who gave hubris a bad name.
As the hon. Gentleman is new to his post, it might be helpful if I set out why we are having this debate. Today, the country is gripped by the biggest housing crisis in a generation and the longest double-dip recession since the second world war. Since the spending review, our economy has shrunk by 0.6%. As a result of this Government’s twin failure on economic and housing policy, the reality is that Britain is one of just two G20 countries in a double-dip. The reality is also that this is a recession and a housing crisis made in Downing street—and is it any wonder, as the Chancellor has multiple jobs and yesterday’s Housing Minister multiple identities, and both authored worthless plans on how to bounce back from recession?
The facts are stark: house building is down, homelessness is up, private rents have hit record highs, and we have a mortgage market in which people struggle to get mortgages. The latest Government figures tell us that fewer than 100,000 homes were started in the 12 months to June, which is a 10% decrease on the previous 12 months and amounts to fewer than half the 230,000 new households being formed every year.
Mark Pawsey (Rugby) (Con)
Will the hon. Gentleman care to tell us how many new houses were started in 2009?
Jack Dromey
As I will make clear later, I am prepared to defend our record at any time, but let me just give a few indications of our record: 2 million new homes, 1 million more mortgage holders, and over half a million new affordable homes. Also, we brought up to standard more than 1.5 million homes that were in need of decent homes investment, putting right the backlog left by the previous Government, and in 2007-08, the year before the bankers’ crash, we achieved the highest start point for new-builds in Britain at any time in the last 30 years, with more than 200,000 homes being built. When the crash came, our response was very different from what happened back in the dark days of the 1980s. Did we stand back and wring our hands? No we did not. We acted to keep people in their homes. Through Kickstart and other programmes, we took action, resulting in 110,000 homes built, 160,000 jobs safeguarded and 3,000 apprenticeships. So I will defend our record at any time.
Andrew Bridgen (North West Leicestershire) (Con)
Will the hon. Gentleman give way?
Jack Dromey
I want to make a little more progress.
The sad reality of the gulf between supply and demand means that this week and every week, 2,500 fewer homes are built than are needed. The Minister will be aware that although his predecessor said two years ago:
“Building more homes is the gold standard upon which we shall be judged”,
housing starts under his tenure were lower in every quarter since Labour left power. The Minister will also know from his considerable experience in the Department for Business, Innovation and Skills that the collapse in the house building industry has had a catastrophic impact on the construction industry. The Office for National Statistics has confirmed that the total volume of construction output in the second quarter of this year fell by 9.5% from the total in the same quarter of last year. The ONS confirms that that was driven by a fall in work on new private housing of 6.7% and a catastrophic 25% fall in the public housing sector.
Two years ago, we warned the Government that by recklessly raising taxes and cutting spending too far and too fast, they risked putting the economic recovery at risk. We warned them that if they cut the housing budget by 60%, it would be a devastating blow not only to house building and the construction industry but to the wider economy and the millions of families desperately in need of a home at a price they can afford. The Government, having failed to listen to those warnings, cannot now escape their failure or duck their responsibilities for its victims.
Perhaps most devastating is the rise in homelessness and rough sleeping, the very issues that the previous Housing Minister said brought him into politics in the first place. Statutory homelessness has risen for five consecutive quarters, up 14% in the past year alone. I do not know what brought the new Housing Minister into politics, but, with the new homelessness figures out tomorrow, will he tell us whether he expects to see a fall or an increase for the sixth quarter in a row?
Most heartbreaking of all—we see it all over the country—there was a 23% rise in rough sleeping last year. It is a visible, visceral epidemic that harks back to the 1980s, when Tory policies led to cardboard cities under bridges and annual reports of deaths in cold English winters.
It is not just those without a roof over their head who are suffering. The Minister’s predecessor and the Prime Minister have claimed on the Floor of the House that private sector rents are falling, so perhaps the Minister can explain why the very company used by both the Prime Minister and yesterday’s Housing Minister to justify their claims, LSL Property Services, reported only two weeks ago that rents hit a record high over the summer? As a consequence, we have the rise of “generation rent” with 1 million young people predicted to be locked out of home ownership by 2020 as they face a squeeze on their wages, increasingly unaffordable rents and difficulties saving for a deposit, as evidenced by the Joseph Rowntree Foundation.
Ms Karen Buck (Westminster North) (Lab)
While my hon. Friend is on the subject of private sector rents, which the Government categorically promised us would fall, not least because of the reductions in housing benefit, does he accept that since the election 93% of the additional housing benefit claimants have been working people? It is therefore working people on low incomes who are being hit by the total failure of the Government to fulfil their promise.
Jack Dromey
My hon. Friend is absolutely right, and it is a bitter irony that the public purse, through housing benefit, is picking up the consequences of the failure to build new homes on the one hand and subsidising landlords charging ever higher rents on the other.
There are other serious consequences of the growing housing crisis, from health to welfare. Bad housing harms health and costs the national health service £2.5 billion a year. It holds kids back at school, and the price tag for lost earnings of young people whose GCSE results have been affected by poor housing is £14.8 million. Unaffordable housing drives up the benefit bill. The Government’s supposed affordable rent programme alone will drive up housing benefit by £1.4 billion.
Despite the costs of the housing crisis and the Government’s long record of failure, Ministers continue to claim that they recognise the importance of house building, including to the economy. Since cutting the affordable housing budget by 60%, the Government have announced and reannounced countless schemes and initiatives that promised to get Britain building. May I summarise but some?
In November 2010, the Department for Communities and Local Government launched the new homes bonus, promising action
“to get the country building again”.
In March 2011, the Government launched “The Plan for Growth”. Remember that? It said:
“A successful construction industry is vital for sustainable growth. Building and maintaining homes…are activities that underpin the entire economy…it is critical that industry gets the support it requires to build houses on the scale the UK needs”.
It promised
“radical planning reform”
that would deliver
“the housing the country needs.”
At the time, the Secretary of State for Communities and Local Government welcomed the
“action to get the house building industry building again”.
Two months later, the Government launched Firstbuy, promising
“a much-needed boost to our house building industry, supporting thousands of jobs across the country.”
In November 2011, the Government were at it again, launching the housing strategy. Do Members recall that it was described as the housing revolution? The Prime Minister and the Deputy Prime Minister donned their wellies, hard hats and high-vis jackets for the TV cameras as they promised
“to restart the housing market and get Britain building again”
with schemes, they said, that could create 400,000 jobs. All that with £420 million, but a tenth of what was cut the previous year by the Chancellor.
Not four months later, in March this year, the Prime Minister and the former Minister for Housing hit the airwaves again, launching the NewBuy guarantee and promising a
“boost to the housing market…and thousands of jobs in the construction industry”,
and yes, you have guessed it,
“to get Britain building again.”
So much has been promised—hundreds of thousands of jobs in the construction industry, hundreds of thousands of new homes, hundreds of thousands of new home owners—but what has been delivered? A contracting construction industry and collapsing housing starts, a growing housing crisis, a double-dip recession, and an array of announcements followed by a litany of failure. Can there be any more fundamental an indictment of failure than the fact that, at a time of economic crisis, when the Government have promised over and over again to build Britain out of recession, building starts fall quarter after quarter after quarter, pushing Britain back into double-dip recession?
Mr Andrew Love (Edmonton) (Lab/Co-op)
What does my hon. Friend make of the announcement that we are to have yet more planning legislation, increasing uncertainty and almost certainly blighting a possible housing revival?
Jack Dromey
I will cover that in greater detail later, but my hon. Friend is absolutely right. The Government blamed the failure to build homes on the planning system and so tore the system up by its roots. We warned them of the consequences: damaging uncertainty, chaos, confusion and hiatus. Sure enough, the figures bear that out. The ink is barely dry on the new national planning policy framework, planted only four and a half months ago, but they want to tear it up once again and say that it needs fundamental reform.
Bill Esterson (Sefton Central) (Lab)
While my hon. Friend is on the subject, does he agree that changing the planning system is not the simplest and most straightforward way to revive the housing market, because currently around 330,000 new homes could be built with existing planning consents?
Jack Dromey
My hon. Friend is absolutely right. We meet regularly some of the major developers and building companies, and they all say the same thing. They have planning permission for in excess of 300,000 sites, and the figure is rising, but they simply do not feel that they can proceed, not least because of the state of the economy and the mortgage market. Again and again we have had those false dawns from this failed Government, and now once again Ministers will don their wellies and high-vis jackets. More schemes to get Britain building are promised, as if saying it will make it so.
Andrew Bridgen
I thank the shadow Minister for giving way eventually. May I draw his attention to the lamentable record on council homes in North West Leicestershire? The previous Labour-controlled district council left an awful legacy when it was finally turfed out of office in 2007: 70% of council homes were below the decent homes standard, one of the very worst records in the country. May I also draw his attention to the fact that it was this Government who found almost £21 million to bring all the council houses in my constituency up to the decent homes standard in the next three years, another example of this Government sorting out Labour’s housing mess?
Jack Dromey
Sadly, when we took office in 1997 we were confronted with a Conservative legacy of disrepair and neglect. We invested £19 billion to bring more than 1.5 million homes up to the decent homes standard, and I have seen in my constituency how that transformed the lives of the people in those homes. Some 75% of all tenants concerned had their homes brought up to the decent homes standard. Did the hon. Gentleman’s Government stick to that progress when they took office? No, they did not.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I have been in this House for nearly 30 years, and the whole time we have been short of affordable housing, under Tory and Labour Governments, but Labour built less council housing than any previous Administration. The hon. Gentleman’s criticism would be more effective if he acknowledged Labour’s failure to put housing at the top of its agenda. The difference is that this Government understand that housing has to be at the top of their agenda.
Jack Dromey
A record of 2 million more homes, 1 million more mortgages holders, half a million more affordable homes and 1.6 million homes brought up to the decent homes standard is one that we can rightly be proud of. All I will say now, as I will say later on, is that in the here and now there is a pretty dramatic contrast between what Labour councils and Conservative-led councils are doing in building new council homes, taking advantage of the housing revenue account reforms, reforms that we pioneered.
Mr Andy Slaughter (Hammersmith) (Lab)
My hon. Friend talks about building new council homes; we wish we had that luxury. On Monday in Hammersmith, the Conservative council decided to knock down 760 newly refurbished council family homes and sell the land to a private developer, some of whose associates have been arrested in Hong Kong on fraud charges. Is that the localism of which the Government speak? The residents of those homes had voted three times for them not to be demolished—the last time by a majority of four to one.
Jack Dromey
My hon. Friend represents with great distinction a constituency with a council that has been a laboratory for some of the most right-wing, ideological Conservative thinking on housing. He is right to challenge that and to say that the rhetoric may be that of localism, but the practice is more like Leninism.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
My hon. Friend is right to focus his devastating attack on the coalition Government’s record on housing starts. When it comes to localism, they have also undermined local authority attempts to improve local housing markets. In Newcastle, 9,000 people are on the council house waiting list and there are 4,000 empty homes. Some 99% of those are in the private sector, yet the Government are making it harder for local authorities to bring empty private sector dwellings into public sector use.
Jack Dromey
My hon. Friend speaks with passion about her constituency and the problems she faces. All over the country, it is typical for there to be enterprising Labour local authorities. Would that we had an enterprising central Government who really believed in local government and its capacity to help build Britain out of recession.
I return to where I was. Perhaps I am being unfair on yesterday’s Minister for Housing. It turns out that he took it on himself to build, and with a dedication and passion that many would find hard to understand; he hid it, but he was beavering away, busy building—building up his following on Twitter. I hope that the new Minister for Housing will spend his time dedicating his full attention to the job. I advise him not to be obsessed with sending out press statements, as his predecessor was. If there were a new home for every press release from the last Minister for Housing, there would be no housing crisis. Perhaps he was trying to prove his prophecy, made from opposition:
“it’s easy for a housing minister to catch your eye with a headline, but much harder to deliver more homes.”
For once, he was absolutely right.
The new Minister for Housing is taking on a position of huge responsibility and national importance. Every Member knows the scale of the housing crisis and will have stories from their own constituency. I have never-ending queues of heart-breaking cases—young couples paying a fortune in the private rented sector, often in sub-standard accommodation, desperate to get a mortgage, which, if they could get it, would mean that they would pay less to buy a home. But they cannot get a mortgage.
Those on ever-lengthening council waiting lists are desperate to get decent accommodation. A couple with two young children came to see me; both burst into tears because of the impact that where they were living was having on their children. There are also the local small businesses. In my constituency, a man from the local construction company—a decent man, who had been in business for 25 years—came to me and said, “We just can’t get work any longer.” One in four young people in Castle Vale, an admirable community, is out of work. They are good young people, desperate for an apprenticeship in the building industry, but all their hopes are being dashed. They will find that this is a Government in complete denial as they spin a line that things are getting better; a Government who promised to get Britain building but are in denial about falling housing starts; a Government who promised to unlock the mortgage market but are in denial about the millions locked out of home ownership; a Government who promised that rents would come down but are in denial as they hit record highs; a Government who promised an “affordable housing revolution” but are in denial, with the previous Housing Minister hailing a 68% fall in affordable home starts and a 97% collapse in social housing starts as “rapid and dramatic increases”; a Government who once promised not to
“produce endless policies and initiatives that…lead to inaction”
or to
“repeat these mistakes of the past.”
The time for half measures and half-baked schemes is over. The CBI was absolutely right when it said that we face a national economic emergency. Rising to that challenge starts with the political will to put housing centre stage, both to meet growing need and to get a sluggish economy moving. The Government must put jobs, homes and growth at the heart of everything they do, not least because history tells us that economic recovery requires us to build our way out of recession, whether it was the eventual revival from the long depression of the 1930s or Britain’s post-war recovery when we built homes for our heroes on a massive scale. I know that on this, at least, the Business Secretary, the new Minister’s former departmental colleague, will agree with me, because he has said:
“Recovery requires a big expansion in social and private house building.”
He is in government, so the question is why are they not getting on with it?
The Government need to show the same determination that a Labour Government showed in 2008. When faced with a global crash as a consequence of the bankers crisis, we acted to keep people in their homes, unlike in the 1980s when the Tories presided over the heartbreak of mass repossessions, and we acted to build new homes.
Justin Tomlinson (North Swindon) (Con)
When the Labour Government came to the rescue, what measures did they insist were put in place to help first-time buyers with the nationalised banks?
Jack Dromey
Our record contrasts very favourably with what happened in the 1980s. We helped first-time buyers. I have been told time and again by building companies and developers that had we not acted in the way that we did, the industry would have fallen flat on its face.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
Does my hon. Friend recall that in the recession of the early 1990s repossessions rose to very alarming levels and the Government of the time took virtually no action to prevent it? That contrasts with the action taken by the previous Government to halt a rise in repossessions and keep them at a much lower level than the industry was forecasting.
Jack Dromey
My right hon. Friend, who has a long and honourable track record on housing, is absolutely right. Tens of thousands of people are in their homes today because we took action when faced with those dire economic circumstances, in dramatic contrast to what happened back in the 1980s.
Unlike this Government, during the recession Labour rightly increased investment in housing to provide the homes that people need and to secure construction jobs. As well as providing funding to build 112,000 affordable homes, we created and maintained 160,000 jobs and 3,000 apprenticeships for young people. Yesterday’s Housing Minister will be familiar with those homes because, extraordinarily, the Government have tried to claim credit for them. However, as the National Audit Office has confirmed, of the 170,000 affordable homes in the next five years that he used to talk about, 70,000 were commissioned and paid for by a Labour Government. Labour is showing the same determination now as it did then, because we intend to put housing at centre stage of our economic recovery plan.
We understand just how important investment in house building is as a means of economic revival. We know that for every £1 of public money spent on house building, studies have shown that the economy benefits by up to £3.50. Money spent on building affordable homes is money saved as unemployed building workers are put back to work, young apprentices are taken on, and less money goes out on housing benefit. We know that in transmission time it is the quickest way to get a sluggish economy moving. Investment is the key.
The Government were absolutely wrong to cut £4 billion from the affordable housing budget in 2010, and no amount of press releases or half-cocked initiatives will fix that. That is why Labour has proposed bringing forward infrastructure investment, including for housing, and why we have called on the Government to use £2 billion from a repeat of the bankers’ bonus tax to fund tens of thousands of affordable homes, not least because public investment can lever in investment from elsewhere.
The National Housing Federation has said that public investment of £1 billion, matched by £8 billion from the housing associations, would build 66,000 shared-ownership homes for people on low to middle incomes, create 400,000 jobs and, in so doing, save the taxpayer £700 million in jobseeker’s allowance, not to mention the added savings from housing benefit and increased tax revenues. The NHF also predicts a boost in growth, generating £15.25 billion in the wider economy. The Government should commit greater investment now—we would—rather than leave it in the pipeline.
Next, the Government need to get the banks lending again. Small to medium-sized firms, including small builders, are crying out for investment, but the banks are not lending. Thus far, the Government schemes have failed.
The Government must also urgently consider the case, proposed by my right hon. Friend the leader of the Opposition, for a British investment bank. The German state bank, KfW, is a good comparison, and a British investment bank could support the funding of new infrastructure.
Next, the Government must encourage innovation among local authorities and housing associations. The Government took a welcome step forward by proceeding with Labour’s plans to free up councils to build the next generation of council homes through housing revenue account reform. Indeed, along with the Labour leader of Southwark council, Peter John, I launched its plans to build 1,000 new, much-needed council homes. The Government must now provide help and support to those innovative councils that are taking advantage of that reform to ensure that they use the headroom to maximise the number of homes built.
It seems that those most in need of support are Conservative-run local authorities. As a freedom of information request by my right hon. Friend the shadow Secretary of State for Communities and Local Government has demonstrated, Labour councils are building while Tory councils sit on their hands. A survey showed that five times as many social homes for rent are being built in Labour authorities than in Tory areas.
Jeremy Corbyn (Islington North) (Lab)
My hon. Friend will be aware that Islington council is planning to build 750 new council homes between now and 2015. He will also be aware that in inner-city areas such as mine, more than 30% of the population live in the private rented sector. Does he agree that it is past time that we had much tougher regulation of the private rented sector in the terms of tenancies, the longevity of tenancies, rent levels and, above all, the social and repair conditions that tenants have to live in?
Jack Dromey
The private rented sector has an important role to play, but not on its current terms. That is why in July we launched our initiative, which was supported by the sector as a whole, to regulate letting agents. That is why we will be bringing forward proposals on effective regulation of the sector. We have to tackle the lack of stability and security, and the ever-rising rents. That is why we will bring forward proposals to ensure that the decent homes standard applies in the private sector as well as in the public sector.
Jack Dromey
I will allow one final intervention, but I will then move on so that as many people as possible can speak in the debate.
Ian Mearns
Is my hon. Friend aware that he has an ally in the new Minister for Housing on the regulation of the private sector? In 2007, he tried to introduce a clause into a Bill that would have regulated private letting agents.
Jack Dromey
I agree with my hon. Friend. It is welcome that the new Minister for Housing has taken that position. Perhaps he will follow that through in government.
Investment in the private rented sector should be encouraged. Many of the measures in the Montague report—for instance, those on the use of public land, on attracting investment and on standards in the private rented sector—are welcome. However, we strongly oppose the proposal to further water down the affordable housing requirements that councils place on developers. Those requirements enable communities and local authorities to insist on affordable homes in mixed communities. Developers simply should not be allowed to build for the well-off only.
The Government should cut VAT on home improvements, repairs and maintenance to 5% to help home owners and small businesses, and to create jobs in construction and building supplies, from glass and bricks to cement. They should also implement a one-year national insurance tax break for every small firm, including building firms, that takes on extra workers.
The Government have continued with Labour’s drive to free up public land for house building, but they must go further. Innovative deals are being done, but we believe that it is appropriate for the Government to consider schemes to provide public land to housing associations and other developers free at the point of use, with payback over time. Such schemes would overcome the problem of the initial cost of land and get affordable house building going.
I referred earlier to the way in which the Government tore up the planning system. They are now returning to fundamental reform of the planning system. It was ludicrous to blame the planning system before they reformed it. It is laughable to blame it afterwards. The Government cannot seem to make up their mind. The Chancellor said on “The Andrew Marr Show” on Sunday that the city of Cambridge was a good example of how the new planning framework that they introduced earlier in the year is working. Later, on “The World This Weekend” the Business Secretary used the same example to suggest that house building is being held back by the current rules. We warned of chaos and confusion on planning—that seems to have spread to the Government.
Mark Pawsey
The hon. Gentleman persists in criticising the national planning policy framework. If it is not working, how does he account for the 13% increase in housing approvals over the past six months, compared with the previous six months?
Jack Dromey
I will come on to those interesting statistics. Under the planning system that the Government inherited, applications were overwhelmingly granted speedily and there was development land for in excess of 300,000 homes. The most recent data from the month following the NPPF’s introduction show that planning approvals fell by 37%.
The fact that homes are not being built is not the fault of the planning system. The principal problem is the failed economic and housing policies of the Government. To get Britain building again, we need to address the root cause of that failure—their failed economic plan, which has caused a lack of liquidity in the finance market, a shortage of mortgages for struggling first-time buyers, and the biggest squeeze on living standards in a generation.
Whether it is the economy or house building, the Government will always find somebody else to blame. The Chancellor blames the weather, weddings and bank holidays, and the last Housing Minister blamed the planning system and affordable housing. The truth is that the reason for the collapse in house building, the contraction in the construction industry and the double-dip recession is a failed deficit reduction plan that cut too fast.
We urge action in the motion that we have tabled. The Government’s failures in respect of housing are not just those of policy, gross though those are, but fundamental failures of leadership on an issue that is vital for the future of our country. If the Government really meant what they said about getting Britain building, they would have put housing at centre stage in their economic recovery plan and invested in it. They would have invested to build the homes that millions of families desperately need and to support those struggling to pay rent in the private rented sector. They would have invested in the future of our young people, helping them to achieve their dream of home ownership. They should be leading a real revolution in housing, building the foundations for Britain’s recovery. That is why we ask the House to vote today for real action to build Britain out of recession.
Jack Dromey
I am glad to answer: Labour is the party of aspiration. We support the right to buy, but the Government’s approach is fundamentally flawed, first because local authorities will not be able to retain all the receipts, and secondly because thus far it is inexplicable—perhaps the Minister can help—how the one-for-one promise will be delivered. Thirdly, there is absolutely no guarantee that if a home is sold in my constituency of Erdington, where there is a long waiting list, a new home will be built in Erdington. There are fundamental question marks about the Government’s approach.