Housing

Lord Beecham Excerpts

Thursday 19th January 2012 Lords Chamber

[Lord Beecham]

My Lords, I join all other Members of your Lordships' House who have congratulated the noble Lord, Lord Stoneham, on initiating this debate and on introducing it so fully and admirably. This is the second debate on housing—one was initiated by the noble Baroness, Lady Hollis, some months ago—which is an indication of the importance of this subject, so it is good that the House has had an opportunity to debate it.

A century ago, your Lordships' House was described as “Mr Balfour’s poodle”. I do not know whether Mr Pickles has a poodle, but in the shape of the Housing Minister, Mr Grant Shapps, he certainly has a Jack Russell who is very lively and busy. Mr Shapps announced, shortly after being appointed, that it was,

“easy for a housing minister to catch your eye with a headline, but much harder to deliver more homes”.

He spoke whereof he knew, because there have been 127 announcements on housing since Mr Shapp’s appointment—an average of about six a month. However, in the new-start figures for 2010-11, there was a reduction of 7 per cent. All this has of course been accompanied by, as we heard from my noble friend Lord Whitty, a 60 per cent cut in the provision for affordable homes. There will be more announcements to come, but most of the action plan to which the noble Baroness, Lady Maddock, referred consists of announcements, consultations and reports, rather than any actual building to take place.

The document we are debating is interesting but there are other documents that I also commend to the House, particularly to the noble Baroness the Minister— notably a series from the IPPR dealing with a whole range of housing issues. One of them looks particularly at the demand question. It calculates that the need for new homes will be in the region of 206,000 to 280,000 per annum over the next 15 years. The report also points out that in the past two decades the average has been only 160,000. It emphasises that social housing is already under enormous pressure and that waiting lists now run at between 6 per cent and 12 per cent across housing authorities. The difficulty is compounded by a halving of the capital budget, with the obvious consequences of supply being squeezed. The target of building 150,000 affordable new homes a year, assuming it was going to be met, will simply not bridge the gap—especially in the social rented sector.

The report we are debating has some interesting ideas, but there are some gaps. The noble Baroness, Lady Gardner, referred to one—what are we actually building? What standards are we building to? There was much to be said for Parker Morris standards in the social sector but also more generally. We do not see those standards being applied now. Members of your Lordships' House will recall that last year surveys demonstrated that the size of new-build properties was smaller in this country than occurs anywhere else in Europe. That is also a matter for concern.

The noble Lord, Lord Stoneham, referred to how the needs of the elderly should be reflected. There is a passing mention of that issue in the report, but it needs amplifying and needs to look beyond just the role of the Department for Communities and Local Government. Extra care housing is an initiative that has begun to prove its worth in a number of authorities. It needs to bring together the interests of adult services and the health service in looking at the kind of provision that will allow people to stay in the same place but with a range of different facilities available to them. That is worth developing.

Another singular omission in the report that has an indirect impact on the supply side is the question of student housing. In many places—the noble Lord, Lord Shipley, and I are well aware that this certainly applies to Newcastle, but it will also apply elsewhere—student housing tends to crowd out family accommodation. Just as we would seek to encourage and facilitate elderly people to vacate houses that are too big for them and move to smaller accommodation, it would be desirable to find a way of housing students in accommodation that would otherwise become available to families.

Another interesting IPPR report that I strongly commend to the Minister, who may not have come across it, deals with the extensive criticism of the development industry. The report states:

“The long-term record of UK housebuilders’ levels of output tells a story of consistent underdelivery … The value of land has risen faster than that of almost any other commodity over recent decades, so the development industry has come to prioritise trading land over building homes”.

The industry has,

“bought up large land banks at high prices during the boom”,

but is not sufficiently building. The report continues, stating that the,

“new Housing Strategy does not demand the reform that is needed. Instead, it offers the major housebuilders public land, money and guarantees without articulating a serious quid pro quo”.

These matters are certainly worth exploring, although I would not necessarily jump to any conclusions.

We also have to bear in mind the actions that the Government have taken in addition to their thoughts about what should happen in future. Their first announcement was effectively to scrap the regional spatial strategies, against which there had been a substantial outcry—particularly in the south-east counties, which perhaps had no wish to accommodate people moving out from overdeveloped London. The result of that was that 220,000 planned homes will no longer be built and, far from delighting the development industry, the Government were immediately taken to court by a number of developers who found that their plans and agreements with local authorities were not able to go ahead.

However, there are many other matters. As we have heard from the noble Lord, Lord Best, cuts have been made in grants to registered social landlords. I happened to be in conversation with the chair of a very active housing association that is bringing together three or four associations into one. He was saying that its programme has been substantially reduced as a result of the grant cut. The association was simply not going to be able to build anything like the number of houses that it had wanted and planned to build.

The right to buy has been reintroduced for reasons that escape me. The substantial discount has been described in this debate as a free gift to people who are already adequately housed and makes no economic sense. Your Lordships will recall that during the passage of the Localism Bill, an amendment supported by this side of the House, moved by the noble Lord, Lord Best, to allow 100 per cent of right-to-buy receipts to be reinvested in housing was rejected by the Government and their supporters in this Chamber. Those are serious matters.

There is also the impact of housing benefit and other changes which are likely to generate increased housing demand. In response, we have the new homes bonus, which the noble Lord, Lord Best, implicitly described as an example of nudge theory. I have the greatest respect and admiration for the noble Lord, but on the matter of the new homes bonus I profoundly disagree with him. I am sure that that will not cause him to lose any sleep, but there are serious aspects to this. The new homes bonus involves some government money—money taken from the departmental budget for some years—and other funding which does not come out of the general pot but is a reallocation of money within local government. It is deducted from the formula grant. It is doubtful whether the scheme will achieve its objectives. The Select Committee in the House of Commons stated that it was,

“a bold experiment; but not one which, on the evidence … we can have any confidence will be successful”—

rather short of a warm endorsement of the policy.

In addition to the question about whether the nudge will work—one must be sceptical about that—there is a huge distribution issue. The process will divert resources from the north to the south. It is interesting that the speakers in this debate have been roughly equally divided between those of us who come from the north and those of us who live in the south. The north-east, north-west and Yorkshire and Humberside will lose £104 million, while the south-east, the south-west and the east of England will gain £280 million. Tandridge in Surrey gains £20 a head; Knowsley in Merseyside loses £25 a head, Newcastle loses £5 million and Gateshead loses £4 million. That is money effectively deducted from the grant that those authorities would have received. All that to achieve the princely total of 14,000 new homes.

The scepticism that I refer to is shared not merely by Labour politicians or even the Select Committee but by the national Home Builders Federation. We have this purported remedy at a time when waiting lists are soaring and rents spiralling in the private and public sector. Shelter reports that rents are now unaffordable for working families—working families—in 55 per cent of local authorities.

The Government’s record on other aspects has also been lamentable. The decent homes programme was savagely cut. In my view, the Labour Government did not do enough to secure new building, but they did an enormous amount to improve the condition of existing stock. Those programmes have effectively been uprooted. I have wearied the House in the past with references to Newcastle, so I shall confine my observations to Gateshead today, just across the River Tyne from us. Gateshead has had a significant cut—in fact, it was cut off completely. It lost several million pounds from the decent homes programme and had a 15-year programme for housing renewal halted halfway through, with significant consequences for the local economy and housing needs of that area.

Another policy that the Government have introduced, on which we will see the extent to which it proves deleterious, is flexible tenancies—something which the Conservatives, at least, had pledged in their manifesto not to introduce. They said that they would not interfere with tenure.

The condition of the private rented sector is a matter of concern. There are significant problems in dealing with repair, some of which were touched on in passing in the debate on housing matters under the legal aid Bill last night. Instead of strengthening councils’ powers in relation to empty dwelling managing orders, the Government have made it more difficult. Properties have to be vacant for a longer period and to constitute a nuisance—hardly a term that is readily interpreted—before any action can be taken. We need stronger powers to promote licensing schemes and to intervene to take over the management of poorly managed properties. They are not the majority, but they are present in significant numbers, not just in core urban areas but throughout the country. There is very little in the document about the condition of the private rented sector.

Some interesting observations have been made today about how new forms of financing and new forms of building—self-build and community build—may take place. They should certainly be developed, but we continue to have a significant imbalance between the sectors and geographically. Incidentally, while we are thinking about geography, the growing places fund, which has been referred to, underlines the inequity of the present system. The growing places programme is supposed to provide infrastructure for new housing development and the like. It was striking that Northumberland, Durham and Tyne & Wear received exactly the same funding under that scheme as the Oxford City region and Berkshire—not areas, one might have thought, of pressing social housing need and with a significantly smaller population than that major part of the north-east. The issue of equity is completely omitted from the document.

The foundations may have been laid, but I must conclude that they are fairly shaky. I hope that the Government will listen to the evidence, consider the issues of fairness and respond more constructively to the real needs of the many people who are in poor housing, who are desperate to move into better accommodation and who want communities that are mixed—as several noble Lords have commented—but in which the quality of housing, especially new housing, is better than has been provided, certainly in the private sector, for many years. We must move away from a fixation with owner occupation and look to a multiplicity of forms of tenure which will suit people at different stages in their lives.

I again congratulate the noble Lord on introducing the debate. I have no doubt that we shall be returning to the issues in the months and years ahead.