Housebuilders

Lord Kennedy of Southwark Excerpts

Thursday 11th January 2018 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I make my usual declarations of interest as a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.

Like other noble Lords who have spoken in this debate, I wish to put on record my thanks to the noble Lord, Lord Best, for securing this important debate today. We often talk about housing, but the noble Lord, in changing the focus to the performance of the UK’s major housebuilders, has shone a welcome spotlight on what has been happening with them. As the noble Lord said, they have struggled to either achieve the quantity or the quality of the new homes the nation needs.

The number of homes being built has increased and, while that is welcome, we are still not building enough to meet the demand. That, in itself, has huge consequences for families, on rent levels, affordability of housing, house prices, standards and homelessness. My noble friend Lord McKenzie of Luton referred to the scandal of homelessness. The Labour Government had virtually eliminated the scourge of rough sleeping by the time they left office. It is shameful that walking to your Lordships’ House from any of the nearby mainline stations, we are confronted by people sleeping in doorways or in Westminster tube station. I agreed entirely with the contribution of the noble Lord, Lord Turnbull, about young people struggling to get on to the housing ladder and the whole question of the rising costs they have to endure.

The number of homes we have been building has been in decline for many years under successive Governments of all colours. Even with the welcome increase that we have seen more recently, we still built 200,000 fewer homes in 2016-17 than in 1969-70. Those figures are quite stark and highlight the problem we face as a nation. There is also the issue of building the homes that people actually want, where communities need them and the type of housing that communities need. The right reverend Prelate the Bishop of Newcastle made very important points about building homes and communities, and again made it clear that even more social housing is needed and a distortion has been created in recent years by the failure to deliver that.

To address that issue, there has to be a bigger role for local authorities, as many noble Lords have said, and for housing associations. The model favoured by the Government at present will not deliver the increase that we need, or to which the Government have committed themselves. I agree with the noble Lord, Lord Kerslake, that the major housebuilders will not solve the problem on their own in this housing crisis. As we have heard today, other models need to be developed and used.

As we have heard, the major housebuilders buy land, often competing with each other, which puts up the cost of the land. They then, rightly, want to maximise their return on their investment, often moving towards a model that drives down the element of affordable housing in the developments that they deliver. That is often to the dismay of the local authority, which can have very little power to do much about it. I do not blame or criticise businesses—and housebuilders are businesses with shareholders, seeking to maximise their return. They are not the Government; they are not looking at housing policy and solutions; it is the Government’s job to do that. I agree with the noble Lord, Lord True, that the focus needs to be not just on numbers but on quality; we need to build quality homes.

Like the noble Lord, I have lived in a variety of places. I grew up on a council estate in Southwark, the Aylesbury Estate, and lived there for many years with my family. I then rented in Coventry and Nottingham, in the private sector, and now I am a homeowner living in Lewisham in south London—but still paying my mortgage, unfortunately. These things happen and life goes on; many people move through the same things and move forward. But it is frustrating that the Government are not using all the public policy levers at their disposal to fix, as they term it, the broken housing market.

I sit on a planning committee in Lewisham Council and I have often seen, with much regret, that when we consider planning applications—I have considered hundreds in my time—the affordable element has been squeezed down. The noble Lord, Lord Hunt of Wirral, made reference to the decline of smaller housebuilders and the problems that that has caused—and I agree on those points. However, I do not agree about red tape in the planning process. I have sat on a planning committee for many years, as I said, and have approved hundreds of applications, and I just do not believe that the problem is the red tape with the planning departments. What frustrates me is that the committee often agrees the application and then, weeks, months and years later, nothing much has happened. A sign has gone up that says, “Land available to build 20 houses with full planning permission”, but nothing actually happens—not a brick is laid. That is the issue. It is not the planning department holding things up; it is things not getting built.

The use and cost of land is another issue, particularly in London, with the numerous planning applications being approved with no action being taken. That needs to be dealt with. Many noble Lords have mentioned the cost of public land and how public bodies can dispose of that public land for affordable and social housing, and be able to sell it for best value rather than the highest price. The noble Lord, Lord Horam, referred to that. When we considered the last planning Bill—I think that it was last year—I moved a number of amendments in this House which were supported by Transport for London, which wanted to dispose of some its land other than at the highest price. It wanted to be able to sell it at a lower price for best value to build social housing. We had discussions with the Government about that—the Mayor of London has ambitious targets for building more affordable housing and more social housing—but at the end of the day we just could not get the Government to agree, and it all fell by the wayside. It is very regrettable that we did not do that, and I hope that at some point the Government will look at it again. Disposing of that land at a more reasonable price would enable us to build the different tenancy homes that we need.

The briefing from Shelter talks about using public land more intelligently, which is what we are talking about here, to solve the problem and fix our broken housing market by helping to meet the Government’s own housing targets and actually building homes that people and communities want and need. Building homes that people want and need is of paramount importance. All too often we see the same types of housing built, with the same designs, not taking into account the locality or what the real need is in an area, or seeking to address that need, because it might not fit into the model that the housebuilder wants to supply. So we need to do more, build more and be more ambitious about what we want to build and what can be achieved. Housing associations have a good track record in building homes that people want and meeting community need, but they need to do more—and, actually, they want to do more, as a number of noble Lords have said. I would like the Government to give more focus to the co-operative sector, and to look at offsite manufactured housing with more energy, as the noble Baroness, Lady Maddock, said.

I asked a Question recently on offsite manufactured housing and made reference to the report by the GLA committee chaired by Nicky Gavron about what was being done. Community land trusts and custom housing building projects, as the noble Lord, Lord Best, said, equally have important roles to play in these small developments. I have also recently asked a number of Written Questions about Ebbsfleet and the development corporation, which the noble Lord, Lord Bourne, has kindly answered. On looking at the Answers that I have got, it seems to me that progress is a bit slow there in getting housing built and reaching the growth that the Government were expecting. Perhaps the noble Lord could comment further on that.

We certainly need to do much more to support the small housebuilders. Their market share has been shrinking over a number of years, but they in particular can work on the smaller and more bespoke schemes that are needed, which are more reflective of local communities.

Skills is another big area where more action is needed, as my noble friend Lord Whitty said. Much more needs to be done to get young people in the UK equipped with the skills to become the bricklayers, carpenters, electricians, plumbers and roofers of the future. We have all come across the very skilled workers who have come to work here from abroad, and we are very lucky to have their contribution, but it is a matter of regret that we have not done much more to train our own young people to have a greater share of these new jobs. Major housebuilders need to do more by taking on apprentices on leaving school and giving them the skills. I agree with the comments of the noble Baroness, Lady Wolf of Dulwich, that we have a serious crisis that needs to be addressed.

I also think that local authorities in England need to be able to borrow to build. As the noble Lord, Lord Best, said, their being able to use 100% of their receipts from council house sales to build more homes is long overdue.

I would like to look at the figures that the noble Lord, Lord Naseby, gave us. However, I certainly agree with him that the Labour Government should have built more council housing. But it would be worth looking at the money spent by that Government on the Decent Homes Programme, renovating social housing and making homes warmer, safer and drier. That programme improved our social housing stock with better roofing, windows and heating, making much-needed upgrades throughout social housing.

I agree with the noble Baroness, Lady Brown of Cambridge, on the desirability of building more low-carbon housing using the most energy-efficient standards. That was an issue that the noble Lord, Lord Krebs, from the Cross Benches, as well as the noble Baroness, Lady Parminter, and others raised time and again during the passing of the now infamous Housing and Planning Act 2016. We were unable to persuade the noble Baroness, Lady Williams of Trafford, or the noble Viscount, Lord Younger, of the desirability to do that then. Very small sums of money were required to do it when houses were being built; as the noble Baroness said, it costs many more thousands of pounds more to retrofit houses at a later date. It seems crazy that we are not doing it now.

I do not doubt the sincerity of the noble Lord, Lord Bourne, or the Government, in tackling our broken housing market, but it is very frustrating that some very obvious policy decisions are staring them right in the face and are not taken up. I hope that the noble Lord can look at them now.