Lord Jenkin of Roding
Main Page: Lord Jenkin of Roding (Conservative - Life peer)Growth and Infrastructure Bill
Lord Jenkin of Roding Excerpts
Lord Judd
My Lords, one might ask why I am moving the amendment in the light of the good exchanges we have been having in our deliberations so far. I go back to the basic issue: why is this clause in the Bill at all? If we have had to have this tremendous amount of discussion, this avalanche of reassurances from the Minister, meetings at which reassurances have been given and all the rest of it, why have the clause in the Bill?
That means that it is necessary to look at the motivation for the clause. I suggest that the motivation is not what we have been talking about. It is not about preserving the unique role and position of the parks and areas of outstanding natural beauty. There is a feeling that this could become an obstacle to other priorities in government administration and that, therefore, we need to look again at this absolute commitment and qualify it, whatever reassurances are given.
Like my noble friend, I read with great interest the note on the meeting with the English National Park Authorities Association. Again, it was far from clear to me after reading that why the clause was being proposed unless it was for the reason that I have put to the House. I therefore suggest that, at this stage, we need to hear from the Minister why it is essential to have it in the Bill, with all the qualifications that have now been made. I am sure that, as a reasonable person, the Minister will agree with me that those qualifications are all based on her word. They are not reinforced by the legislation. They are her interpretation, her good will, her undertakings and her reassurances, with a bevy of officials around her to add dignity and, I am sure, a good deal of intellectual input to the occasion.
The clause and its purposes, and why it is there in opposition to the priority we have all had in the past, are the real issue. I seek from the Minister some kind of convincing argument as to why the clause is necessary. I beg to move.
Lord Jenkin of Roding
My Lords, I have not tried to get into the discussion on Report so far. I made my view clear in Committee that this clause was a good thing. I, too, warmly commend my noble friend on the Front Bench for the amount of care and trouble that she has taken. I particularly valued the meeting that she arranged with the representatives of BT. I found it extremely informative, both as to their attitude to all this and as to some of the technology, of which I confess I was not wholly aware. For instance, one does not need a continuous line to take superfast broadband across the country. If you have the right equipment in a cabinet, you can, I think, go up to a kilometre by wireless transmission. That may well be a way in which one can protect a particularly sensitive area from the need for lines.
The other thing that was made absolutely clear, and which we have heard all along from my noble friend, is that for overhead lines we are not talking about anything other than poles. This is not the kind of thing one has for mobile telephones; they are straightforward wooden poles with the wires on top. I recognise what has been said about the need to site these sensitively, because one is talking about sensitive areas.
I totally admire the sincerity of the noble Lord, Lord Judd, on this. He feels very strongly about it. The noble Lord, Lord Adonis, read a bit of a passage from the conclusions of the meeting with the national parks and others, which was held under my noble friend’s chairmanship on 1 March. He quoted the first sentence of the paragraph headed:
“Working together on the deployment of superfast broadband”.
It states:
“Ed Vaizey emphasised that the clause is not about stigmatising National Parks and AONBs as obstacles”.
That is absolutely right. He then went on to the next paragraph, but it is worth reading the words that come between because I think that to some extent they answer the question of the noble Lord, Lord Judd, as to why we have the clause at all. It states that Mr Vaizey said:
“Government recognises the important work that they”—
the national parks—
“already do in encouraging broadband deployment. However, we need to find a way forward to encourage investment in broadband and provide the certainty we need that will ensure the public money being used to support Broadband is not tied up with bureaucracy”.
Lord Judd
I wonder whether the noble Lord, who is a good friend of many years’ standing, might just reconsider the impression he is giving that it is a question of the practical needs of the nation against bureaucracy. I do not believe that that is the situation at all. Of course there are practical needs of the nation, and in this sense I declare an interest, as I have done before in our deliberations: I live in a national park and I want good broadband—of course that is true. Having said that, what we have had in the past is the paramount consideration of the unique role of the past. Regarding what is taking up time—and I again come back to the point which my noble friend has so convincingly made ever since we started deliberation on this Bill—it is precious difficult to find any evidence that there has ever been unnecessary delay or a hold-up of the kind described. In fact, I would suggest that there is no evidence that this is out of kilter with what happens anywhere else.
It seems to me that we want to ensure that, notwithstanding this need to take seriously the issue of broadband for the sake of a strong economy, we do not push to one side this paramount concern that we have had in the past. I do not believe that it is impossible to reconcile the two, but I think that it has to be argued very hard, and on occasion it will need a lot of serious deliberation. I do not think that it is just a straightforward administrative point. From this standpoint, it is not just a bureaucratic delay but a battle of priorities.
Lord Jenkin of Roding
I was happy to give way to the noble Lord and he has confirmed what I have always regarded as one of the most heartening aspects of this whole question: the universal desire to make sure that broadband reaches even the most remote rural areas so that they can participate in the modern economy. That is hugely important. It is absolutely right that it is a function of Parliament, and perhaps of this House in particular, to ensure that there are proper safeguards and controls and that AONBs are properly protected. The noble Lord, Lord Judd, talked about the unique value of these national parks. It is a question of finding a balance between those two.
I believe that this clause is right, and it would be a pity if the noble Lord were to press his amendment—I am not sure whether he will—and if it were carried. We have had a good discussion. The amount of care that my noble friend has taken and the number of meetings that she has convened and chaired herself have been extremely helpful in getting people to understand what is involved in this—and that certainly applies to me. I hope that we will resist the amendment of the noble Lord, Lord Judd, while at the same time recognising his passion for defending his beloved national parks.
Lord Adonis
My Lords, I agree with the very last words of the noble Lord, Lord Jenkin. I have huge admiration for my noble friend Lord Judd, but even he would accept that they are not his national parks but the nation’s parks. That is why the concerns that have been raised this afternoon are so significant. They are held in trust for the nation, and we want to see that their beauty is preserved and enhanced for subsequent generations so that all the good work done by my noble friend is not wasted in the years ahead.
Lord Shipley
My Lords, the amendment would help to solve three problems: the urgent need for more social housing; the lack of growth in the economy; and the need to boost the construction industry. It is supported by a number of organisations: the Local Government Association, of which I declare my vice-presidency, Shelter, the Home Builders Federation, the Federation of Master Builders, the Chartered Institute of Housing, the National Housing Federation, London Councils and, crucially, the National Federation of Arms-Length Management Organisations, ALMOs. All urge a relaxation on borrowing by local authorities to enable them to build up to 60,000 more homes over five years.
Last year saw the lowest house completion rate since 1923. The Government urgently need to get more social homes built and there should be absolutely no reluctance to build them. The shortage is now being exacerbated by the underoccupancy or bedroom tax. Many people on low incomes want to move to a council home with fewer bedrooms but too many are unable to do so because the homes do not exist. The numbers on housing waiting lists, the rising demand for temporary accommodation and high rents in the private sector all point to the social and economic benefit of building more homes at below-market levels. This amendment would help to build the homes that people want to move into.
The question is whether it is affordable for local government. Councils have the capacity to build more homes, given that council housing is now self-financing. They could raise £7 billion. This could be done if the Government removed the borrowing cap on housing revenue accounts, relying instead on a prudential borrowing code to guarantee that only sustainable investment gets the go ahead. Many councils have successfully used prudential borrowing and have shown that they can manage such borrowing without risk. The Local Government Act 2003 already empowers the Secretary of State to cap any local authority which undertakes risky borrowing.
I understand the need for the Government to be careful about public borrowing levels. However, relaxing the housing borrowing cap need not be counted as public sector borrowing any longer. The UK uses a much wider measure of public debt than other countries. Council housing is a trading activity and international regulations already permit this to be discounted from government borrowing levels, although unfortunately the UK does not currently adopt such an approach and I remain puzzled as to why it does not. Council housing has been self-financing since April last year, and that is welcomed. The average debt on a home is just over £17,000. There is clearly scope for additional borrowing against the asset represented by the existing housing stock.
This is an opportune time for the Government, with the support and input of partners such as CIPFA and the Local Government Association, to produce a new, additional, prudential borrowing code, focused on borrowing undertaken specifically through the housing revenue account. The prudential code framework is a successful model that has worked well and supported councils to manage their borrowing sensibly. A similar model alongside strong backstop provisions already in legislation—the 2003 Act—would be an effective safeguard on borrowing through the housing revenue account.
I spoke on this matter in Committee and this new clause differs slightly from that tabled in Committee to emphasise that local authorities must have regard to government guidance such as a new prudential borrowing code. Ministers raised concerns in Committee that removing the housing borrowing cap could jeopardise the Government’s deficit reduction programme. This amended new clause, alongside a new, tailored prudential borrowing code, discussed by providers and authorised by HM Treasury, would offer a compromise approach to the Government that could address the concerns of Ministers.
Advice has been received that there would be no adverse reaction from the capital markets. This is because the increase in borrowing would be comparatively low and, in any case, the sums involved fall well below the size of the OBR’s forecasting errors on local government debt. This amendment offers a major opportunity to build more homes, to cut waiting lists, to get builders building and to drive growth. I beg to move.
Lord Jenkin of Roding
My Lords, I support the amendment moved by the noble Lord, Lord Shipley, to which I have added my name. I imagine that my noble friend on the Front Bench will have seen the letter published in the Financial Times this morning under the heading, “Give councils freedom to build homes”. In addition to the list of organisations which the noble Lord, Lord Shipley, quoted at the beginning of his speech, this letter is signed by 13 separate organisations, which one might say cover the whole field of housing all the way from the Home Builders Federation to Shelter, and including, as just mentioned by the noble Lord, Lord Shipley, the National Federation of ALMOs—arm’s-length management organisations. They make this important point in the letter:
“Investing in housing not only helps tackle the housing crisis, which requires us to double the number of national homes and build 249,000 homes in London alone by 2020, but also stimulates economic growth and creates jobs. Building 60,000 homes would add 0.6 per cent to gross domestic product and create 19,200 jobs. For every £1 invested by the public sector in construction, 56p returns to the exchequer”.
I find the arguments in favour of modifying and lifting the housing cap really quite overwhelming. I recognise that my noble friend on the Front Bench has very little option but to defend the existing policy and I do not blame her for that—she is a loyal member of the coalition and that is exactly what one would expect. I therefore address my remarks to the Chancellor of the Exchequer. It will rest with him, in his Budget in a few days’ time, to convince the country that he really has a strategy for growth as well as a strategy for cutting the deficit and, eventually, reducing the debt. I cannot think of any better way for him to convince the country, and large numbers of people who are currently looking for housing of various sorts—not just affordable housing but housing they wish they could find if only it was available—that this strategy actually does mean benefits for the country. It would be something that would considerably lift the spirits of all those who are deeply concerned, as I am, about the level pattern of GDP under the present circumstances. It is a very uncomfortable position for a developed country to be in. One can understand why we have got here but, as well as reducing the deficit, we must attain a proper strategy for growth. I am convinced that my right honourable friend the Chancellor of the Exchequer accepts that.
Many policies—I will not weary the House with reciting them all—have been introduced with the objective of trying to restore growth to the economy, but here is one which evidence shows, really conclusively, could have a really quite dramatic effect on what is a hugely important area of our national life, namely the provision of houses. The building of houses has declined substantially over recent years. Although, as my noble friend has pointed out, council housing is now self-financing, the fact of the matter is that councils have huge resources but are not entitled to borrow against them, even though they would of course be subject to the general restrictions on borrowing that apply to all of the public sector—this is a special restriction that applies to local authorities and housing. I cannot see that it is justified and issue a plea to my right honourable friend at the other end of the Palace to please look at this extremely carefully. It would be a valuable addition to his armoury and would go quite a long way to convincing the country that he is genuine about searching for growth.
Lord Jenkin of Roding
My Lords, I added my name to these amendments. The noble Lord, Lord Berkeley, has dealt with them so comprehensively that all I need to say is that I support them.