Housebuilders

Lord Green of Deddington Excerpts

Thursday 11th January 2018 Lords Chamber

[Lord Green of Deddington (CB)]

My Lords, my purpose in speaking in this debate is to point out that the supply of housing is only half the story, albeit admirably described by my noble friend Lord Best. The other half is of course demand. A major factor in demand is—noble Lords may have guessed—immigration. The Government are in denial on that central issue of this most important debate.

The Secretary of State in the other place said on 7 February last year, in reply to a question:

“Two thirds of housing demand has nothing to do with immigration; it is to do with natural population growth”.—[Official Report, Commons, 7/2/17; col. 248.]


That is simply untrue; indeed, it is even misleading. The starting point is DCLG’s most recent principal projection for England over the 25-year period to 2039, which shows an average increase of 210,000 households a year. Of this, it says that 63% will be down to “natural change”—note that term—and 37% will be due to future net migration. Note the word “future”. This was presumably the basis of the Secretary of State’s statement, but I wonder whether he really understands the basis on which these numbers were drawn up. For a start, immigration has been running at 40,000 or 50,000 higher than the Government’s assumption. Indeed, it has been close to the high-migration scenario, which would mean, if it came about, that we would have to build a new home every five minutes, day and night, throughout the period, just for new migrants.

The really misleading aspect, however, is that DCLG excluded the impact of previous migration on future demand. Instead, it buried it in “natural change”, attributing it to the existing population, rather than addressing it separately. Separate examination would of course boost the figure and the proportion substantially, especially as, under the population projections on the high-migration scenario—which we are close to— 85% of our future population will be due to immigration.

If anyone should doubt that the impact of immigration on housing demand has been played down, they could take a quick look at the past. ONS data from 2005 to 2014 show that of the additional households created in England in that 10 years, the proportion of foreign-born heads of household was 90%. I trust it is now obvious to noble Lords that claims that two-thirds of housing demand has nothing to do with immigration are simply ludicrous.

The only relatively good news in this sad saga is that the ONS is now to take over the preparation of household projections. Furthermore, we have a new and highly competent Minister of State in the renamed department. I hope he will insist on a proper analysis of the true impact of immigration on future housing demand and recognise, in doing so, that demand is a major aspect of the entire housing crisis. We should get this right and we should get the sources of it right.