Finance (No. 2) Bill

Debate between Jack Dromey and Alison Seabeck

Wednesday 17th April 2013 Commons Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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”?

Regional Pay

Debate between Jack Dromey and Alison Seabeck

Wednesday 20th June 2012 Commons Chamber

[Alison Seabeck]

No, I am afraid that I cannot. Perhaps one of the hon. Gentleman’s colleagues will allow him to intervene on them later.

In his autumn statement, the Chancellor talked about private sector pay being set in accordance with local labour markets. That is not true. As my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) has just pointed out, some of the most successful companies in the country, including large retailers, banks and telecoms companies, use similar national pay structures.

There is genuine concern among businesses in my constituency that any decision to cap or lower public sector pay will lead to problems for them, in that there will be less demand for their goods and services as families pull in their horns.

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

Will my hon. Friend give way?

[Alison Seabeck]

I am afraid not; my hon. Friend has only just arrived in the Chamber.

A representative of one business has commented to me:

“As I see it, the lot in power have proved that they don’t get reality.”

Because the south-west is very beautiful, we have a large number of second homes. They push the cost of housing up to levels on a par with those in the south-east, but our salaries are lower and so the mortgage multiplier for our potential homeowners is astronomical. That can be crippling for people desperate for a home; the effect is felt not only in Plymouth but in the rural south-west. That point was well made by my right hon. Friend the Member for Exeter (Mr Bradshaw).

In the South Hams, the house price to income ratio is around 17:1. In the Cotswolds, it is even higher, at closer to 19:1, and those figures were taken at the depth of the recession in 2010. We should remember that many of the public sector workers who work in Plymouth and Exeter live in areas such as the South Hams. They might have struggled to get a mortgage on their dream home in better times, and they will be disproportionately hit by this Government’s proposals on regional pay. The housing market will not allow them to sell their home and move—I am sure that my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) was going to make this point— particularly when new affordable homes are not being built. What are those people to do, when their pay is either cut or frozen and meeting their mortgage payments becomes increasingly difficult? They will stop spending in local shops, hotels and pubs, and on entertainment. That will provide a direct hit on the local economy.

This was a complex matter for the NHS to consider all those years ago, and I urge the Government to be aware of the complexity of boundaries and of the additional costs involved in the work required to ensure that the proposal is consistent and does not lead to poaching or leapfrogging. They are on a hiding to nothing on this one; it will create anomalies and provide yet another example of their incompetence. Every time this happens, however, it is not the Chancellor or the Paymaster General and his mates who are affected, but low-paid working people such as teachers, nurses and midwives.