Autumn Statement
Jack Dromey Excerpts(9 years, 11 months ago)
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Mr Osborne
I pay tribute to my hon. Friend. I have been to Ipswich and seen what he has done to attract businesses and jobs, and to champion big infrastructure improvements, such as in relation to the A14 and the Ipswich in 60 campaign. Those things would be under threat under a Labour Government. The Labour party’s rail franchising policy would prevent the improvement in train services to East Anglia. Big infrastructure projects that never happened under a previous Labour Government would almost certainly never happen under a future Labour Government.
Jack Dromey (Birmingham, Erdington) (Lab)
After another broken promise made in 2010 that front-line policing would be protected, 16,000 police officers have gone, including 8,000 from the front line. The Association of Chief Police Officers has said that, based on the Chancellor’s plans for the future, at least another 16,000 police officers will go, the majority from the front line, threatening its ability to discharge its statutory duties and protect the vulnerable. Is ACPO right?
Mr Osborne
Because of the hard work of the police and the reform that has been undertaken, crime is down and there is more policing on the front line. That shows that savings can be made to the Home Office budget while achieving reform. The hon. Gentleman’s question again reveals the default position of the Labour party. The shadow Chancellor attempts to say that it has newly converted to fiscal discipline and that it would take the difficult decisions. Every single Labour MP then gets up and complains about future spending and welfare decisions. That just shows that they are totally unreformed and unreconstructed.
Oral Answers to Questions
Jack Dromey Excerpts(10 years, 5 months ago)
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Mr Osborne
Youth unemployment is down 100,000 over the last year, and in the hon. Gentleman’s constituency the claimant count is down by 30%. I would have thought he would be welcoming that.
Jack Dromey (Birmingham, Erdington) (Lab)
When a proud Kingstanding dad of a newborn baby son tells me he has been on zero-hours contracts for two years and cannot plan from one week to the next, and says “Do them up there”—the Government—“get what life is like down here?”, and when a proud Stockland Green mother caring for her disabled son says, “My husband’s been made redundant twice in the last three years, with each new job less secure and on a lower rate of pay,” and adds, “What planet does the Chancellor live on?”, what does the Chancellor have to say to them?
Mr Osborne
I would say that through our long-term economic plan we are creating jobs in the hon. Gentleman’s constituency, with the economic security that that brings. We are legislating to deal with the abuse of zero-hours contracts, which for 13 years the Labour party did nothing about, and we have discovered in the last couple of weeks that the shadow Chancellor, who from the Opposition Dispatch Box has criticised zero-hours contracts again and again, uses them in his own office.
The Economy and Living Standards
Jack Dromey Excerpts(10 years, 5 months ago)
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Jack Dromey (Birmingham, Erdington) (Lab)
“What planet does the Chancellor live on?”, said the Stockland Green mother. “Does he begin to understand people like me? My husband has been made redundant three times, and each time the new job is on a lower rate of pay. Do they know, up there, what life is like for us down here?”
That goes to the heart of what the shadow Chancellor said earlier about an era of discontent and disconnection. There is discontent because life is hard for most of my constituents. Living standards are squeezed and people are worried about their kids and concerned about vested interests—energy companies, for example—taking advantage of them. They say to me time and again, “Jack, it just ain’t fair.” The disconnection is because there is mistrust of politics and politicians, and incredulity when people are told that recovery is under way. Time and again I hear, “Recovery—what recovery?” My constituents say to me that this Government simply do not understand their lives, because for too many of them, life is hard and there is insecurity in the world of work. I meet constituents on zero-hours contracts and those in the building industry who complain about being undercut. One said, “Jack, they are exploiting the migrants and undercutting us.”
Debbie Abrahams
Is not the increase in the number of people on zero-hours contracts an absolute shame? The Chancellor was not even able to provide a figure for that number.
Jack Dromey
My hon. Friend is absolutely right. One of the people I met was a young lad of 22. He said, “Jack, I’ve just had a baby. We are trying to bring up our kid as best we can but I cannot plan from one week to the next because of my zero-hours contract.” A woman, Rachel, poured out her heart to the Leader of the Opposition on the Castle Vale estate about what life is like trying to bring up a young child on the minimum wage. There is insecurity at home. One in two people in Stockland Green in my constituency live in the private rented sector and most cannot plan from one year to the next where they send their kids to school or manage their households budgets, because like Cathleen they have contracts that last six months at a time.
Some people are struggling to buy a home, such as the young family who came to see me and said, “We’re desperate to buy a home, Jack, but we simply cannot afford it. It costs six or seven times what we earn combined to buy a home in this area.” Others struggle to maintain their living standards. One family said, “We’re worse off now than we were in 2009, and for us, holidays are a thing of the past.” Barbara and Jim Brown are struggling, and they are typical of so many of my constituents who can no longer afford to pay their energy bills. Local businesses are struggling to get loans from banks. One civil engineering company said, “Jack, it would be easier to break into my bank than get a loan from it”.
Mums and dads are anxious about their sons and daughters, such as the wonderful woman in the Castle Vale area who said, “I love my son, Jack. He’s got learning difficulties and he has never worked. He is desperately frustrated and I want to see him get on.” Now, at last he is getting on. Why? Because Birmingham city council’s youth jobs fund has funded a job for him in the upcycle project. You should see the smile on his face, Madam Deputy Speaker.
The council has also driven an apprenticeship programme with 1,500 apprentices thus far. The biggest builder of homes in Birmingham is tackling some of the problems in the private rented sector and driving the living wage to transform the city into a living wage city. However, faced with the biggest cuts in local government history, what can be done by local government is important but limited.
In conclusion, the message from this debate is this: if people want an economy that works, decent wages that reward hard work, a higher minimum wage, a living wage and an end to undercutting; if they want security in their home or the security of knowing they will be able to buy a home, and if they want the next generation to get on, including building a new generation of badly needed homes, creating jobs and apprenticeships—the kind of wonderful young apprentices I see at Willmott Dixon in my constituency; if they want to be confident that they can heat their home, and to have an honest Government who will not promise the moon but will move mountains on their behalf, stand up for them and be on their side; and if they want a Government who are fair, without the grotesque contrast between the tax cut for millionaires and the bedroom tax being introduced on the same day; if they want a Government who will reverse that and put the burden on the broadest shoulders and abolish the bedroom tax, and if they want a strong economy and fair society, they want a Labour Government.
Autumn Statement
Jack Dromey Excerpts(10 years, 11 months ago)
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Mr Osborne
My hon. Friend is right that the help for the high street announced today is significant—£1,000 off for shops, pubs, restaurants and cafés. For many shops that will be a lot better than a freeze and will wipe out their rates bill for a couple of years and help them in this difficult time. I know my hon. Friend has campaigned passionately on forces’ houses, and a lot of money is now going to military charities from the LIBOR fines. I know some of the bids being considered specifically involve forces’ housing, so that is one route through which we can ensure they get a better deal.
Jack Dromey (Birmingham, Erdington) (Lab)
What does the Chancellor have to say to the hard-working, aspirational Erdington family with whom I spoke this morning? The dad has lost his job twice in the past three years, with each new job on a yet lower rate of pay. The mum is a full-time carer for their disabled son. They are increasingly struggling to pay their mortgage and energy bills. They say to me, “Like all our friends, Jack, we don’t recognise the Chancellor’s recovery. Does he understand people like us?”, and in particular they ask, “What planet does the Chancellor live on?”. What does the Chancellor have to say?
Mr Osborne
I would say to his constituents, and anyone else, that times have been incredibly difficult for this country because we had the deepest recession in this country’s modern history. We had a 7% fall in GDP, which makes the country poorer. I argue that the best way to help that family, and many other families, is by keeping mortgage rates low and ensuring that more and better jobs are created in the economy, and that people can work longer hours if they want to. All those things are happening because we are standing behind our businesses and have control of our public finances. We are now investing in the next generation to ensure that that family can have a brighter future.
Living Standards
Jack Dromey Excerpts(11 years, 2 months ago)
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Greg Clark
The hon. Member for Leeds West did not give way to Members who had already intervened once. Given the number of Members who want to speak, I think I will do the same thing. However, I will give way to my friend the hon. Member for Birmingham, Erdington (Jack Dromey) before I make some progress.
Jack Dromey (Birmingham, Erdington) (Lab)
I am grateful to the right hon. Gentleman. May I first correct the figures that he gave earlier? Under the Labour Government there were 2 million new homes; it was under the current Government that house building fell to its lowest level since the 1920s.
This is “Yes to Homes” week, and housing organisations all over Britain have predicted that without fresh measures by way of investment in housing supply, rents will rise by 46% by 2020 and the price of buying a house by 42%. Why not heed the advice of the International Monetary Fund, which has said that if we want a serious, sustainable economic recovery, £10 billion should be invested in our economy? Why not invest that in building 400,000 affordable homes and creating 600,000 jobs and apprenticeships?
Greg Clark
I have enjoyed debates with the hon. Gentleman over the years, and he will know that no one in the Government is more committed than I am to increasing the number of homes. He knows that our reforms to planning—I have heard some recent statements suggesting that the Labour party may wish to resile from them—are increasing the number of planning permissions given for new homes. I would have thought that he would welcome that.
The Government are relentless in driving up employment and the quality of skills, which are the foundations of high living standards. However, we must also act to reduce the costs that people have to pay, where the Government can influence those costs. A credible plan for reducing the deficit has kept interest rates low, as the IMF has acknowledged. We must not underestimate the importance of those low interest rates to the monthly budgets of thousands of families. Indeed, as I said, if mortgage interest rates were to rise by just 1%, average mortgage bills would increase by about £90 each month.
We have enabled local authorities to freeze council tax for five years, meaning that the average person pays £200 less each year than they would under the Opposition’s plans. We are increasing the tax-free personal allowance to £10,000 from next year, meaning that the average person will pay nearly £500 less each year than they would under the Opposition’s plans. We have frozen fuel duty, meaning that the average person pays nearly £170 less each year than they would under the Opposition’s plans.
On top of that, we have capped rail fares, extended free nursery care, taken action to reduce energy costs and cut the tax paid on a pint of beer. Under the Opposition’s plans, it would cost more to drive a car, more to take a train, more to heat a home and more to drink a pint. In fact, if we add it all up, someone with a car to run, a mortgage to pay and a home to heat would be about £2,000 worse off every year under the Labour party, yet it has the audacity to claim that things are getting worse for millions of working families.
The combination of rising employment and the increase in the personal allowance meant that last year, real household disposable income rose by 1.4%. However, there is more to do, and as the recovery continues we want to see living standards rise. The people of Britain know that there is no shortcut to higher standards of living and no magic money tree. They know that the only way is for us to live within our means; invest in education and training; spend prudently, not profligately; and exercise the same values in government as people do in their own lives. That is what this Government are doing, that is the path to prosperity for all, and that is why a good future awaits the people of this country.
Finance Bill
Jack Dromey Excerpts(11 years, 4 months ago)
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Cathy Jamieson
I suspect that the hon. Gentleman wants to stray into the territory where Mr Deputy Speaker has suggested we do not go. Suffice it to say that my hon. Friend the Member for Hyndburn (Graham Jones) makes yet another suggestion that the Minister would do well to consider as part of the wider review. I look forward to hearing his response.
Jack Dromey (Birmingham, Erdington) (Lab)
My hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), in her powerful speech, pointed to the biggest housing crisis in a generation that is gripping our country. House building is down to the lowest level since the 1920s. Homelessness is up by 30% since the general election, after it fell by 70% under the Labour Government. We have a mortgage market in which millions struggle to get mortgages and a private rented sector with 8.6 million tenants, or 1.1 million families. There are many good landlords, but many bad ones too. There are chronic problems of security, stability, affordability and quality. One in three homes in the private rented sector does not meet the decent homes standard.
Like my hon. Friend, my interest in housing goes back a long way. When I was a lay trade union activist, I was also secretary of the Tenants and Residents Federation. I was a founding member of the Housing Action campaign. For older Members of the House who remember the occupation of Centre Point, I was proud to be one of those who organised what was an effective demonstration against office block speculation, against the background of rapidly rising homelessness and bad housing. I never thought that we would be back here 30 years later debating a crisis worse than that one.
Jack Dromey
There was an office block speculator called Harry Hyams. Those were the days when people could build office blocks and not pay rent on them, and they would appreciate two or three times in value every year. That happened against the background of a chronic housing crisis. We rightly protested against that and the incoming Labour Government rightly changed the law for—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We are trying to deal with an amendment. Going down memory lane is all very well, Centre Point is very interesting and Mr Mann will always have a response, but I know that Members are desperate to get back to the amendment.
Jack Dromey
You are right, of course, Mr Deputy Speaker.
We are here to stand up for the people we represent, and we all see the impact of the housing crisis in our constituencies. I see the impact in the shortage of homes being built in Erdington—56 certified by the National House-Building Council in 2012—and the building worker, one of 79,000, who lost his job, a big man who burst into tears on his front doorstep in Marsh lane and said, “I’ve lost my job three times; I am desperate to provide for my family. I simply can’t cope any longer.” I also see the impact on the homeless families who come to my surgery—on one occasion, they had just been evicted—desperate for a decent home, and the young people in the Orchard project run by the YMCA in my constituency, where numbers of young homeless people double every year.
Mr Newmark
Is the hon. Gentleman aware that homelessness today is at its lowest for the past 30 years? It has been lower in only three of the past 27 years. It has been bad, but homelessness today is the lowest it has been for 27 out of 30 years.
Jack Dromey
I prefer to rely on statistics from the hon. Gentleman’s Government: homelessness has risen by 30% since the general election.
A teacher and a firefighter in their 20s came up to me on Erdington high street and poured their hearts out about how they are desperate to buy their own home but simply cannot get a mortgage. Evidence from Shelter has shown that typically, couples in their 20s will have to save for 11, 12, 13 or 15 years to afford a deposit. Extraordinary statistics show that the number of people between 25 and 34 who own their own home has fallen from 2 million to 1.3 million, and census figures showed that for the first time since the 1950s home ownership has fallen in our country.
I have seen the problems in the private rented sector in my constituency, such as the lady in Streetly road who had to be rescued by the council’s private tenancy team from a premises for which she was being charged a fortune in rent, but which was deeply dangerous because of faulty electrical wiring.
Ian Mearns (Gateshead) (Lab)
My hon. Friend makes a powerful point. One sad thing that I reflect on is that a lot of property in the private rented sector is in grossly bad condition, yet the rent is paid by the taxpayer through housing benefit. I do not for the life of me see why we do not have better regulation of the private rented sector when a vast amount of public money goes into that market through housing benefit.
Jack Dromey
My hon. Friend is right. We call it protection for good tenants and landlords alike; the Government call it red tape and have rejected every move since 2010 to regulate the private rented sector more effectively. No Government have done enough in our lifetime, but my hon. Friend the Member for Kilmarnock and Loudoun was right: I will compare favourably anytime the record of our Government to the current Government.
Mr Newmark
I hate to throw facts at the hon. Gentleman, but 421,000 social homes were lost under the previous Labour Government. This Government are building 170,000 homes by 2015. This Government’s record is far better than that of the past 13 years under the previous Government.
Jack Dromey
Let me spell out the facts: 2 million new homes; 1 million more mortgage holders; half a million more affordable homes; and 1.6 million social homes brought up to a decent homes standard after our Government inherited a £19 billion backlog in housing repairs. In the 1980s, the hon. Gentleman’s Government stood back and allowed a tidal wave of mortgage repossessions. In 2008, we took action to keep people in their homes and, through the kick-start programme, sustained the building industry against collapse and got Britain building again. I will compare that record favourably anytime to the miserable track record of failure of the hon. Gentleman’s Government.
Sheila Gilmore
Does my hon. Friend share my perplexity about the figure for the amount of homes lost that Government Members have come up with in recent debates on housing? If social homes are lost, they are lost through the right to buy. The Government have decided to increase the size of discounts and further encourage the right to buy, so they will probably lose more social homes than they build. We cannot compare net figures with gross figures.
Jack Dromey
Indeed, when the former Housing Minister, the right hon. Member for Welwyn Hatfield (Grant Shapps)—a man who gives hubris a bad name—launched the new enhanced right-to-buy campaign, he said that there would be one-for-one replacement. One for nine is what is happening. In addition, as freedom of information requests have just shown, Labour councils are building council homes at twice the rate of Conservative and Liberal Democrat councils.
Ian Mearns
Another explanation for the loss of units under the previous Government is that, because they were investing in upgrading homes through the decent homes standard, some homes, particularly in high-rise blocks, were too expensive on a unit cost basis to improve. It was costly, but they had to be demolished. We lost units because we were trying to improve the overall stock.
Jack Dromey
My hon. Friend is right: tough decisions had to be made. All of us in our constituencies have seen the benefits of that decision to invest in the decent homes programme: it has transformed the lives of millions of tenants.
Why have the Government made these mistakes? They started with the catastrophic error of judgment of cutting £4 billion in affordable housing investment in 2010, which led to a 68% collapse in affordable house building. What we have had subsequently are a succession of false dawns: four “get Britain building” launches, 300 separate initiatives and thousands of press statements. I once said of the former Housing Minister that if we had a home for every press statement that he issued we would not have a housing crisis.
My hon. Friend the Member for Kilmarnock and Loudoun looked at the track record: NewBuy was to produce 100,000 homes, but thus far there have been 2,500. When the Minister comes to respond on NewBuy, he might care to refer to the recent Help to Buy announcement, when the Prime Minister ruled out, from the Dispatch Box, any question of its being used to buy second homes. I tabled a written question:
“To Mr Chancellor of the Exchequer…with which organisations or companies (a) he and (b) other Ministers in his Department have met to discuss the mechanism that will be put in place to stop people using the Help to Buy Mortgage Guarantee Scheme to purchase a second home.”
In answer, I was told that
“Treasury Ministers have met with a number of companies in the mortgage industry to discuss a wide number of issues, such as the Help to Buy mortgage guarantee scheme, including through the Home Finance Forum.”—[Official Report, 1 July 2013; Vol. 565, c. 408W.]
Has a mechanism been agreed?
Graham Jones
My hon. Friend makes a valid point regarding going from First Buy to homebuy to Help to Buy. When the Government talk about affordable housing, is there any explanation of why the upper limit in the previous schemes of £280,000 was increased to £600,000 in the current scheme? How does that qualify as affordable housing, and how does it help people who are struggling? That is surely redirecting money at people who could afford a more modest property.
Jack Dromey
Those of us on the Opposition Benches stand for homes for all; the Government stand for homes for the better-off.
Another example of hype was what the £10 billion guarantee scheme would deliver, including in investment in the private rented sector. However, the Government have failed to get anyone to run the scheme for them. Another example—there are endless examples—is self-build. The former Housing Minister said in opposition that the Conservatives would oversee a housing “revolution” led by self-build. He said they would have an action plan in government to double self-build homes. He introduced that action plan in 2010. He then tried to conceal whether it had worked, but ultimately the Information Commissioner forced his hand. We now know that self-build has fallen under this Government, not increased.
Jack Dromey
We have been strong supporters of self-build. The Government have promised a great deal on self-build, but done pitifully little. The figures speak for themselves: a decline in self-build under a Conservative-led Government, compared with what happened under a Labour Government.
The simple reality is that we have seen catastrophic mistakes, a succession of false dawns and, to be frank, downright cheek—the point has already been made that sometimes the Government have claimed the figure is 170,000, when 70,000 of those homes were commissioned by a Labour Government. The comprehensive spending review last week was a missed opportunity. There are indications of a moderate uptake in house building; what we needed was a major investment programme—I will say more about that in a moment. It was a missed opportunity at the worst possible time, and we now run the risk of seeing five wasted years for housing under this Government.
Let me make some brief points about the announcement made last week. It represents a cut in investment in affordable house building, instead of the necessary ambition of approach. I would simply contrast two figures. In the final comprehensive spending review under a Labour Government, £8.4 billion was committed for the three-year period from 2008 to 2011. For the three-year period from 2015 to 2018, this Government propose to invest but £3.3 billion—less than half of what Labour proposed to invest in affordable house building.
In addition, we are seeing an approach on the part of the Government that will mean the slow death of social housing—the mistakes made in 2010, with the cuts in investment; the progressive reigning back of councils’ ability to use section 106 to insist on affordable and social housing; and, now, the Housing Minister talking about the need to convert to the affordable rent model, which is unaffordable for many people and will push up housing benefit bills. We also see the Government once again restating their determination finally to crack the problem of bringing public land to market. We have heard it all before. They have promised a great deal and delivered pitifully little.
It is little wonder that the National Housing Federation was critical of the statement, despite the Government saying that the role of housing associations would be central. The federation attacked it as representing a cut in investment. It is also little wonder that the Chartered Institute of Housing said that the statement lacked the necessary ambition. Just when the country needed a sense of urgency and ambition, the Government let the country down. That is why our amendment argues for a serious approach, designed to get Britain building. First, we have to tackle the biggest housing crisis in a generation. There should be decent homes for all, to rent or buy, at prices people can afford. Secondly, history tells us that there has never been a recovery from a depression, such as that in the 1930s, from a war or from any recession since the war without a major public and private housing programme.
That is why the shadow Chancellor has said that the Government should heed the advice of the International Monetary Fund. Were they to invest that £10 billion in a house building programme, 400,000 homes would be built, and 600,000 jobs and 100,000 apprenticeships would be created. The Government need to invest now, rather than looking beyond 2015. They need to build now, in order to get people back into work now and to bring the cost of failure and the housing benefit bill down. It cannot be right that 95p in every £1 spent on housing investment goes on housing benefit. We need to get that money shifted into bricks. Such investment would ultimately bring down borrowing as well.
Ian Mearns
My hon. Friend is making a powerful speech. I have to criticise the Government for the fact that if every one of their announcements on this matter had been a house, we probably would not have a housing crisis now. They have talked an awful lot about house building but, brick upon brick, it is not happening in very many places in this country.
Jack Dromey
I agree absolutely with my hon. Friend. As I said earlier, if we had a house for every press statement issued by the Government, we would not have a housing crisis.
Jonathan Edwards
The hon. Gentleman is making some powerful points, and I entirely agree with him on the need for a house building programme. Would not the advantage of such a programme be that there would be a ready revenue stream in the form of rental repayments?
Jack Dromey
The hon. Gentleman is absolutely right. All the benefits that I have referred to, plus others, would result from such a programme. If we were to invest in retrofitting as well as in new build, we could tackle some of the chronic problems that are costing the national health service £2.5 billion a year. We could also tackle the problem of a whole generation of young people being held back at school because their overcrowded homes impact on their ability to do their homework. That impacts on their exam results, which in turn impact on their lifelong earnings potential. If the Government were to invest in housing as we would do, they could also reflect the demands of an ageing population. They would be able to help people of all tenures to downsize, rather than using the obscene weapon of the bedroom tax, which has no place in a civilised society.
Graham Jones
My hon. Friend has made a powerful point. The Government’s policy is totally focused on an under-supply of housing, but he makes the valid point that the Treasury should be looking at the other part of the problem, which is the over-supply of housing and its consequences. The Treasury needs to take this matter on board. In constituencies such as mine, people suffer chronic ill health as a result of poor housing.
Jack Dromey
My hon. Friend makes a good point. This is not just about new build, where appropriate; it is also about retrofitting, about regeneration and about bringing empty homes back into use. It is also about recognising that the housing market and the problems associated with housing should not simply be seen through the prism of London and the south-east. Housing markets vary considerably nationwide.
Bob Stewart (Beckenham) (Con)
I have listened very carefully and I understand the logic of what the hon. Gentleman has said. My only worry and concern is where we are going to get the money to invest in housing—investment in housing is a good thing. The hon. Gentleman suggested that we would get the money back, but we will not get it back quickly.
Jack Dromey
What is happening for certain is that the country is paying the price of failure, with £245 billion more being borrowed because of it. Ultimately, it comes down to this: it is a choice between paying for the costs of failure and investing for success. All the evidence shows in transmission times that investing in house building is the quickest way to get a sluggish economy moving. It would build badly needed homes for people to rent or buy; it would put building workers back to work; it would create apprenticeships and hope for the nearly 1 million young people out of work; it would progressively bring down the cost of housing benefit; and, ultimately, reduce borrowing rather than increase it. That is the choice that the Government and the country now face: do we invest public money for failure or invest it to build for success?
Graham Stringer (Blackley and Broughton) (Lab)
My hon. Friend is making a very powerful speech. Is it not the case that the £25 billion that goes into housing benefit supports rentier capitalism and not entrepreneurial capitalism? Would not that money be better invested in bricks and mortar? One of the solutions that the left and the Labour party have for this problem is to bring in rent controls. Does my hon. Friend agree that rent controls would help to bring down the housing benefit budget?
Jack Dromey
I would make two points in response. First, the single biggest factor that would make a difference is, of course, significantly increasing supply. What is so wrong about the Government’s approach is that it has been too much focused on demand and not sufficiently focused on supply. On the issue of demand, we have heard criticisms from the IMF, the Treasury Select Committee and others about the impact of Help to Buy on pushing up house prices, without necessarily seeing a significant increase in supply.
Secondly, we definitely need to look at a very different type of private rented sector for the future, where quality standards will be raised and where there will be longer-term tenancies and flexibility for those who wish it and security for those who need it. Index-linked rents, for example, could see people having predictable and more affordable rents. If we look at existing evidence of such longer-term tenancies with the indexation of rents, we find that tenants pay significantly less and landlords have a reliable income stream, so it works for good landlords and tenants alike. The time has come for a very different private rented sector in the future. Sometimes we refer to “the continental model” of security, affordability and higher quality, where people enjoy a higher status in a sector of choice—not what we have at the moment.
Millions of people will have waited for last week’s comprehensive spending review with hope, but their hopes have been dashed. What we had was hyperbole from the Chief Secretary to the Treasury. I have to say that I sat gobsmacked at his contribution. When it comes to writing the history of hyperbole, he will deserve a chapter of his own, as we have heard it all before. The simple reality is that this Government’s housing policies, like their economic policies, have failed and will continue to fail. Whether it be “First Buy”, “NewBuy” or “Help to Buy”, the British people know from experience that getting a decent home at a price they can afford and getting Britain building once again will ultimately mean sending this message to this Government at the next general election—“goodbye”.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
Let me begin by drawing attention to my interests as declared in the Register of Members’ Financial Interests.
I am very pleased to follow my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who made a powerful and persuasive speech about the importance of expanded investment in housing, and my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), who presented a masterful overview of the whole range of housing expenditure.
Investing in Britain’s Future
Jack Dromey Excerpts(11 years, 5 months ago)
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Danny Alexander
Those representations certainly will be heard as the Department for Transport and the Highways Agency develop their plans for that important route.
Jack Dromey (Birmingham, Erdington) (Lab)
The £3 billion investment in affordable house building will not make up for the cuts in 2010 that led to a 29% collapse last year, will do nothing for affordable house building this year or next, and therefore mean five wasted years under this Government. May I ask the Chief Secretary this question: is it true that the amount announced today is less than in the last two comprehensive spending reviews?
Danny Alexander
As I said in my statement, and the hon. Gentleman should welcome this, we will through this announcement be building more homes on average every year than in any year but one under the previous Government. Frankly, he should be ashamed of the fact that the number of affordable homes in this country fell by 420,000 during his party’s time in office—a total disgrace.
Spending Review
Jack Dromey Excerpts(11 years, 5 months ago)
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Mr Osborne
There is a specific issue around borrowing powers and the M4 corridor through Newport. That has to be done in partnership with the Government in London, but we are very aware of the benefits of that scheme. The Welsh Assembly and the people of Wales will welcome what we are proposing to do on the devolution of further tax and borrowing powers. We will set that out shortly.
Jack Dromey (Birmingham, Erdington) (Lab)
With the Government’s own figures showing that, despite all the promises, house building is down, construction is down, homelessness is up, rents are up, and housing waiting lists are at a record level, does the Chancellor accept that it is the legacy of his actions, including the catastrophic decision to cut £4 billion in affordable housing investment in 2010, that brings him to the Chamber today, and that he is responsible for three wasted years?
Mr Osborne
No, I do not accept that at all. The last Labour Government had a shocking record on house building, especially affordable house building. If the hon. Gentleman turns up in the Chamber tomorrow, he will hear some positive announcements about affordable house building.
Economic Growth
Jack Dromey Excerpts(11 years, 6 months ago)
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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.
Finance (No. 2) Bill
Jack Dromey Excerpts(11 years, 7 months ago)
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Chris Leslie
You are of course entirely correct, Mr Hoyle, as we are debating new clauses 1 and 5. New clause 1, however, talks about the Government’s approach to the housing market more broadly and, in the context of taxpayer support for the housing market, it would be remiss of any hon. Member not to recognise the volatility created by consequential changes in other areas of departmental policy, particularly those of the Department for Work and Pensions, as they affect the availability of housing supply. After all, in most of our constituencies and particularly the least well-off ones across the country, there is a sense of foreboding about the potential displacement of many constituents who are being told that they should look for other housing market options when it is, in fact, quite clear that there are no suitable social housing options to fit the circumstances of nine out of 10 of them. You are completely correct, Mr Hoyle, about the nature of new clause 1.
Jack Dromey (Birmingham, Erdington) (Lab)
On that point and before my hon. Friend moves on, does he agree that the impact of the totality of the welfare changes, including universal credit and the factoring in of housing associations’ bad debts, will have a very serious impact on housing supply—including with respect to the recent profoundly disturbing calculation by the G15 group of housing associations in London that as a consequence of the Government’s welfare reforms, they will build 1,200 fewer badly needed affordable homes next year?
Chris Leslie
The economic background is absolutely key. If we had seen a continuation of the recovery that was beginning to get under way back in 2010, we might have been in a different position. But no, the Government pulled the rug from under the confidence felt by consumers or businesses and in the housing market, too. We have seen a series of consequences as a result. Let us face it: the main problem, particularly for first-time home buyers, is the supply of housing and its cost.
Jack Dromey
On that point, was it not folly for the Government to cut £4 billion from affordable housing investment in 2010, leading to a 68% collapse in affordable house building? Would it not be more prudent now to endorse the shadow Chancellor’s proposal that the 4G moneys should be spent on building 100,000 affordable homes as much the quickest way of getting the housing market moving and, in turn, of getting our economy moving?
Chris Leslie
It is absolutely true. We have to face facts. We have to put direct support into housing supply. These rather opaque and indirect attempts to manipulate the public accounts with complicated and convoluted guarantees and underwriting arrangements do not communicate to the wider public who might be consumers of housing—looking to buy their first home or to rent differently. The Government must be far more direct about this approach.
It is clear that the Government’s ideological aversion to supporting the construction of affordable housing still inhibits recovery of the broader housing market. That is why housing starts fell 11% over the last year to 98,000 and why the number of private and local authority home starts was down, and the number of housing association home starts, at just over 19,000, was the lowest for eight years. There are 136,000 fewer home owners than when the Government came to power, and of course the youngest are hardest hit. Apparently, the average age of a first-time buyer is now 37.
We have doubts and questions about whether this Help to Buy scheme will work. Have the Government thought it through sufficiently? There are plenty of organisations focusing on housing policy. The first-time buyers pressure group PricedOut said that the Government should assist construction of more houses where there are chronic shortages. That is absolutely true. However, there is a point about whether help should no longer be targeted at lower and middle-income families, with the cap of £60,000, and used to support first-time buyers. We need from Ministers a thorough analysis of what is happening, particularly how many higher rate, or additional rate taxpayers will be taking advantage of the new scheme. What analysis have they made of that?
Alison Seabeck
In speaking to new clause 1, I wish to pursue issues that have been touched on by my hon. Friend the Member for Nottingham East (Chris Leslie) and other Opposition Members and to highlight my concern that the Help to Buy scheme might well become a second home subsidy, rather than a scheme, as was intended, to help many first and second-time buyers on to the housing ladder.
In housing, as in so many other areas of policy, the Government have been found badly wanting. I remember the chutzpah the right hon. Member for Welwyn Hatfield (Grant Shapps) displayed on entering government, saying repeatedly that he would outperform the previous Labour Government when it came to house building and getting first-time buyers into the market. As Housing Minister, he failed rather magnificently. He seemed to ignore the fact that Labour built 210,000 new homes before the market crashed. We started to see an increase in the number of homes being built in the run-up to the 2010 general election as a direct result of measures taken by the Labour Government. Indeed, some of the homes that this Government have taken credit for building in 2011 are in fact the hangover from Labour’s new-build programme. We are now seeing a slump in house building.
Jack Dromey
The former Housing Minister claimed that the Government would build 170,000 affordable homes. The National Audit Office then produced a report stating that 70,000 of those homes had been commissioned and paid for by the previous Labour Government.
Alison Seabeck
My hon. Friend is right. I think we have to take the figures offered by the Government with a huge pinch of salt. Although I support any measure, as I am sure he would, to kick-start the housing market and enable young people, such as my daughter, to get on the housing ladder, I, like my Front-Bench colleagues, have serious concerns about the scheme.
Jack Dromey
Is my hon. Friend aware of anything in the Bill that would prevent Russian billionaires, Greek tax exiles or dubious Australian spin doctors from buying homes on the back of the scheme?
Alison Seabeck
That was wonderfully well put, as usual. No, I am aware of no such thing, and that bothers me hugely. It ought to worry Ministers; it will be interesting to hear what they have to say on the matter.
My constituents are struggling under the pressure of the spare room subsidy. They rightly want to know why it is fair for the Government potentially to offer a spare house subsidy of up to £600,000 to people who already have a home. That sum would buy a mansion in Plymouth.
Alison Seabeck
My hon. Friend is right. He reinforces a point I made about not only the potential for price volatility but the inability of certain people to access the housing that is so desperately needed, and the clear need to build more homes, which this Government are singularly failing to do.
Jack Dromey
Does my hon. Friend agree with the hon. Member for Spelthorne (Kwasi Kwarteng), who said in a recent interview, commenting on the Government’s proposed scheme, that
“giving mortgages without increasing the supply will lead to asset price inflation”?
Stephen Williams
My argument is straightforward: I do not know what the Labour party’s variant of the mansion tax would be. Moreover, the Labour party does not seem to know, either; otherwise, why on earth would it frame new clause 5 in a way that asks the Treasury to explain how it might work? We are in an extraordinary position. I know what my party’s policy is and am about to tell the hon. Gentleman exactly how a mansion tax would work, but I had hoped to hear from him a little more detail on how his version would work, so that the clever people at the Treasury could produce the study that he wants.
Jack Dromey
I want to ask the hon. Gentleman about something that he did vote for. In a week when the International Monetary Fund has said that the politics of austerity, of which his party is a strong supporter, are clearly not working, does he now regret voting in 2010 for a £4 billion cut in affordable housing investment, which led to a 68% collapse in affordable house-building and threw tens of thousands of building workers out of a job?
Stephen Williams
To answer the hon. Gentleman directly, when the coalition Government came to office they had to make some quick decisions about what was essentially an economic emergency. We were left with a situation in which the last Government were borrowing £1 for every £4 that they were spending. We simply could not go on in that way, so we had to put forward an emergency Budget to gain the confidence of the markets so that people would continue to lend us enough money, on the triple A rating that we had at the time, to keep all Government programmes going. It has been acknowledged by the Chief Secretary to the Treasury and, I think, by the Deputy Prime Minister that some of the cuts in capital expenditure that the coalition implemented in its first two years in office perhaps should not have been made, in hindsight. But those cuts in the capital programme were in the last Budget of the last Government and were seen through by this Government. The Government have had the wisdom to say that investment in capital expenditure is a good way of getting growth going in the economy, and that is why we have had the wealth of initiatives that the shadow Minister mentioned earlier, and that is why we have had the new package of proposals to help the housing market.