Economic Growth

Jack Dromey Excerpts

Wednesday 15th May 2013 Commons Chamber

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

This is a Queen’s Speech that does not begin to rise to the challenges facing our country, that lacks ambition and that is so thin in content it could have been written on the back of a fag packet, had the Prime Minister not given in and shelved plans for plain packaging of cigarettes. It was vetted by a dubious Australian spin doctor, who deleted any reference to a measure on curbing the activities of lobbyists.

This is a Queen’s Speech from a failing Government presiding over the toxic combination of a flatlining economy and the biggest housing crisis in a generation. House building is down and housing completions are at their lowest since the 1920s. Homelessness is up; it fell 70% under Labour and has risen 30% under this Government. We have a mortgage market in which young couples in particular struggle to get mortgages, and a rapidly growing private rented sector characterised by insecurity over quality and ever-soaring rents.

I see first hand in my constituency the consequences of the Government’s failure, including the lengthening queues at my surgery of couples desperate to get mortgages and couples desperate to keep a roof over their heads. A building worker in Kingstanding burst into tears when he said he was desperate to get back to work, but could not do so—80,000 building workers like him have lost their jobs under this Government.

[Mr Douglas Carswell (Clacton) (Con)]

Does the hon. Gentleman think that the answer to this problem might be even more cheap credit—perhaps a British version of Fannie Mae and Freddie Mac? What does he think we should do to sort out the lack of availability of mortgages?

[Jack Dromey]

No, I do not believe that we should take the same approach as Fannie Mae and Freddie Mac in Britain. I will come in a moment to our proposal.

Three admirable young people in Castle Vale in my constituency told me recently that they were desperate to do an apprenticeship in the construction industry, as their dads and uncles had done, but they could not get one. R&C Williams, an excellent local building company, is surviving despite the problems in the construction sector. Nevertheless, its managing director told me that the previously successful companies run by his two best friends have now gone out of business.

I also see in my constituency the working poor—people on minimum wages and whose wages are being held down and sometimes cut—who end up having to claim housing benefit as their rents go up. It is a startling statistic that 10,000 households a month now go on to housing benefit, because struggling families cannot afford to pay their rent. Such things are pushing up the benefits bill, as is rising unemployment in the west midlands. The number of people unemployed rose in the last quarter by 16,000 to 253,000, which is up by 26,000 over the past year.

That is why Labour proposes urgent action now. The building of 100,000 homes would put 80,000 building workers back to work, create apprenticeships for young people who desperately want a future, lead to wealth in the supply chain—all those who manufacture bricks, glass and cement—and add 1% to GDP. The lesson of history is that our country has never had sustainable economic recovery after events such as the depression, the war and every recession since the war other than when there has been a major programme of public and private house building, and that is why Labour’s amendment proposes action to do precisely that.

[Andrew Gwynne]

Is not the set of measures mentioned by my hon. Friend in stark contrast to the Government’s own NewBuy scheme? We were promised that 100,000 families would have access to cheap mortgages, but only 1,500 families were able to take up that initiative.

[Jack Dromey]

My hon. Friend is right. The Government have a miserable track record of promising the moon and failing to deliver. I will say more about that in a moment.

There is growing demand for urgent action to stimulate the building of affordable housing from organisations ranging from the National Housing Federation to the CBI. There is a chronic lack of confidence not only in the economy, but in the Government’s housing policies. There have been four “Get Britain Building” launches and 300 separate initiatives, and yet the sorry saga of failure continues.

We now have Help to Buy. We are in favour of helping people to realise the dream of buying their own home. However, a powerful report by the Treasury Committee described the scheme as “unconvincing” and said that it was likely to push property prices up and unlikely to produce the significant lift in the supply of new homes that is badly needed. There is also the bitter irony that Help to Buy will help millionaires, fresh from their tax cut, to buy a second home worth up to £600,000—an absurd anomaly that stands to this day. There is one law for the rich and one room for the poor because of the bedroom tax.

That leads me to my concluding remarks. The Chancellor spoke earlier about the need to get benefits down, ignoring the reality that it is soaring rents and unemployment that are pushing benefits up. He has engaged in the most disgraceful debate that divides our country between shirkers and strivers. Only yesterday, Lord Freud said in a speech that people affected by the bedroom tax should—I kid thee not—get a job or sleep on a sofa. What would he say to the severely disabled couple who came to see me who can no longer sleep in the same room, but whose son has moved out? Because they have a “spare room”, they have to pay the bedroom tax. It is an immoral tax that will cost the taxpayer more because there will be a higher housing benefit bill as people are pushed out into the private sector and disabled people will be forced to move from adapted homes to unadapted homes that will then have to be adapted by local authorities and housing associations.

Instead of doing what they should be doing, the Government are seeking to divide the nation. They are driving more and more people into the trough of despair. The essential difference between them and us is this: they divide the nation, we will build one nation.