Housing

Karen Buck Excerpts

Wednesday 5th September 2012 Commons Chamber

[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?