Affordable Housing

Lord Horam Excerpts

Thursday 25th June 2015 Lords Chamber

[Lord Horam (Con)]

My Lords, I think that we are all extremely grateful to the noble Lord, Lord Whitty, for bringing this subject forward today. It is a serious and urgent subject, and I hope that he feels gratified by the quality of the debate which has taken place so far, with so much knowledge and experience readily on show.

The noble Lord said that he was critical of the last three Governments on housing policy; I would take it back 40 or 50 years. I think that the supply of housing has been a disaster for the past 40 or 50 years, and I am afraid that all parties in the UK, perhaps excepting the SNP, are complicit in what has happened. In 1968, we produced 425,000 houses per annum; last year, it was 140,000, when we know that we need roughly 250,000 houses per year to deal with the demand.

The result, as the noble Lord said, is that house prices have rocketed. The average price for a house in London nowadays is about £500,000; rents in London are now double what they are in other European cities; and it adds salt to the wounds when you find that, in 2012, 70% of the houses in central London were sold to foreign buyers—the noble Lord, Lord Haskel, made this point eloquently. John Kay, in an excellent column in the Financial Times the other day, said that all these trends,

“are … entirely explicable by reference to changes in public policy”.

Therefore, it is up to the Government and up to Parliament to rectify this appalling situation.

One proposal that will not improve matters is to extend the right to buy to housing associations, because it will make it more difficult for housing associations to add to the stock of new houses, which is what we need. I can see perfectly well as a politician how the proposal suddenly got into the Conservative manifesto during the heat of a hard-fought general election campaign, but I had hoped that wiser counsels would prevail in the cooler aftermath of victory. So far, that has not happened, but I hope that the wiser heads in government, in the Civil Service, in the wider housing community and in this House will prevail before we go much further—and I note what the noble Lord, Lord Best, said about the fate of a previous attempt to impose this on the country.

That is a bad idea; there are plenty of good ideas around. The Housing Minister has produced some good ideas about how to refurbish estates in London to a much higher density. Ken Shuttleworth, the architect, has produced ideas about densification, which are also very good. The noble Lord, Lord Adonis, who is not in his place today, has produced some excellent proposals for housing. The Government themselves have done a brilliant job in improving and simplifying the planning rules, which are fundamental to all this. So there is a lot of good thinking around, much of it evidenced in the debate today.

However, I sense—with the noble Lord, Lord Whitty—that such thinking needs to be pulled together into a big idea and given much higher priority by the Government. It also needs full-hearted support from the Chancellor of the Exchequer—that is crucial. The important point—here I speak as an economist and, like the noble Lord, Lord Haskel, I invite the noble Lord, Lord Desai, to agree—is that housing is capital expenditure. Capital expenditure has a return over many years; it is not current expenditure. It does not conflict in any way with the Government’s necessary desire to contain current expenditure if we spend the money in capital spending on renewing our housing stock. Nothing less will do.

It is a great pity that the Chancellor of the Exchequer is not here today to hear what is being said—I think that he might agree with a lot of it—but I implore him and the Government to take this extremely seriously. Nothing less will do.