Budget Statement

Lord Best Excerpts

Wednesday 25th March 2015 Lords Chamber

[Lord Best (CB)]

My Lords, I think that I am going to make myself popular, being speaker number 25 and being able to say that the words of wisdom that I have carefully crafted have already been spoken by one or other of your Lordships this evening, particularly perhaps by the last speaker, the noble Lord, Lord McKenzie of Luton. He is an expert on housing matters, and it is housing that I was intending to address. Perhaps I may give some extracts from my speech that will give its flavour.

The headline in last week’s Inside Housing, the award-winning magazine for those in the world of housing, read:

“Sector dismay after Budget ignores supply”.

The Budget came less than two days after a huge rally at Westminster Central Hall, which called for “homes for Britain” and the ending of the housing crisis within a generation. The anxiety now is that the Budget’s principal measure for housing, the Help to Buy ISA scheme, will promote demand, with a grant of £3,000 for first-time buyers who save £12,000, but there are no measures in the Budget to increase the supply of new homes.

The Budget’s small print has some positive messages for housing: an increase in the number of growth areas, where development of brownfield land gets a boost, although there are no new funds for these areas; a London land commission to map sites and more powers to the London mayor; a feasibility study on progressing large-scale projects promoted by local authority partnerships; consultation on more effective use of compulsory purchase powers, which are such an essential tool in securing sites; and a feasibility study on boosting self-build and custom housebuilding. That is all good stuff but declarations, maps, consultations and feasibility studies do not in themselves build houses.

Two realistic options exist to crank up housebuilding to a level approaching that of times past: reviving council housebuilding and expanding housing association output. Many local authorities are raring to go, with the capacity to borrow and the willingness to work collaboratively with partners. Their borrowing, even though it can be safely and prudentially repaid from rents and sales, currently counts against the deficit in the UK. It would not do so if accounting practices used in other EU countries, and by the OECD and the IMF, were adopted here. Government must be braver in going for a change in the definition of public spending that would allow councils that are willing and able to do so to use their huge assets to get back into some serious building programmes.

Then there are the housing associations. The Chancellor found the £2 billion in the Budget for Help to Buy ISAs. That same level of investment, as spelt out by David Orr, the chief executive of the National Housing Federation, would enable housing associations to build 69,000 new affordable homes. Doubling that investment—enough to create around 140,000 extra affordable homes—would be a real response to the crisis in housing supply hitting our children and grandchildren. Can we hope for this in the next spending review?