Lord McKenzie of Luton
Main Page: Lord McKenzie of Luton (Labour - Life peer)
Lord McKenzie of Luton
My Lords, I congratulate my noble friend Lady Ford on securing this important and timely debate. She has brought a wealth of experience but, most of all, an abundance of passion to this subject. Several noble Lords, including my noble friends Lord Sawyer and Lady Wilkins, have said that this agenda does not have the prominence that it should. I hope we can put that right in the future. My noble friend has prompted a knowledgeable debate, typical of your Lordships’ House. I add my congratulations on the excellent maiden speeches of my noble friend Lord Touhig and the noble Lord, Lord Gardiner of Kimble. They have brought perhaps a differing knowledge but a shared passion to our deliberations—a passion which my noble friend Lord Graham presses on the Minister.
My noble friend Lady Ford set out the vision for housing and why it—or the lack of it—plays such a prominent part in the lives of our fellow citizens; why the provision of decent housing is central to tackling disadvantage in our country; and an acknowledgement that areas of deprivation are inevitably characterised by a perverse collection of worklessness, educational underachievement, poor housing, health inequalities and being victims of crime. The availability of housing, especially affordable housing, is not just about having somewhere decent to live. It is integral to tackling poverty and promoting well-being, in the words of my noble friend Lady Wilkins, or life chances in the words of my noble friend Lord Haskel. Where and how it is provided influences the shape, cohesion and sustainability of our communities—a point we heard from the right reverend Prelate the Bishop of Gloucester, particularly in relation to rural areas, and my noble friend Lord Morris.
As my noble friend Lady Wilkins pointed out, the projections show that, largely because of population growth, increasing longevity and the development of more single households, there will be an additional 6 million households in the UK by 2030. This implies the need for some 250,000 affordable and market-based new homes to be built per year. This represents a considerable challenge in funding, land availability, infrastructure and the capacity of the construction sector. The noble Baroness, Lady Scott, reminded us that this is not just about new housing, but the state of the existing stock. Before being hit by the global recession, housebuilding in 2007 reached 207,500 new homes—a 30-year high.
During the recession we did keep faith. We increased public investment in housing by an extra £1.5 billion to help offset some of the contraction in private housebuilding. Planned investment of £7.5 billion over the two years would have built 112,000 affordable homes for low-cost rent or first-time buyers. As private housebuilding was declining by a half, public sector activity was to increase by about 20 per cent. This was intended not only to provide more affordable homes but to safeguard some 160,000 jobs in the housebuilding industry. This underlines the importance of the public sector and the fragility of the mortgage market, to which a number of noble Lords referred, including the noble Lord, Lord Teverson, and the noble Baroness, Lady Scott. For the first of these years, we now know that the Homes and Communities Agency exceeded its targets for both completions and starts for houses for social rent and for low-cost ownership. However, the HCA is now faced with cuts in the current year, with who knows what to follow. In addition to the £230 million cut already announced, we learnt on Monday that a further £220 million is to be cut this year from the HCA’s funding. Like my noble friend, I ask the Minister to tell us what this half a billion pounds cut means in terms of reduced provision of affordable housing.
As my noble friend Lady Ford made clear, affordable housing for rent is not only about RSLs and local authorities. There are 8 million private renters in the UK, so the challenge is also about providing decent private rented housing. This is a growing phenomenon exacerbated by the affordability gap—an issue raised by a number of noble Lords. However, measures announced by the coalition Government in the past few weeks will significantly roll back the steps that we were taking to protect private tenants. The national register of landlords would have allowed tenants to make basic checks on landlords and would have made enforcement of letting rules simpler. Regulation of letting and managing agents was designed to tackle rogue landlords. The requirement for compulsory written tenancy agreements was intended to ensure that tenants and landlords were clear about their rights and responsibilities. However, each of these is to be swept away, together—so we understand—with the Tenant Services Authority, thus rebalancing the scene in favour of landlords and away from tenants; not the direction advised by my noble friend Lord Touhig.
As several noble Lords have commented, the issue of affordable housing cannot be divorced from the nature and levels of financial support given to tenants. Like others, I find it difficult to conjure words strong enough to express how much we deplore the proposed changes to housing benefit. I very much support the contribution of the noble Lords, Lord Best and Lord Haskel, and the noble Baroness, Lady Scott, on this issue. The proposals amount to a planned cut of some £1.7 billion a year by 2014-15—a cut to be borne, by definition, by some of the least well off in our society. As Shelter pointed out, the vast majority are pensioners, those with disabilities, people with caring responsibilities and hard-working people on low incomes. These cuts will mean that the majority of tenants will get less in support than they pay in rent, forcing many to move or even end up homeless. They will create ghettos of the poor in swathes of our towns and cities. It is wholly wrong to justify these awful measures by portraying a small minority of cases as typical of the vast majority of housing benefit claimants. What is the rationale for restricting local housing allowance rates to the 30th percentile rather than the median? What will this mean in terms of increased demand for social rented accommodation? Why on earth should anyone lose 10 per cent of their benefit just because they are unemployed for a year?
Alongside new social rented homes provided by RSLs and new affordable homes for first-time buyers, local councils are key providers of affordable homes. Thankfully, when we were in government, we saw the re-emergence of a programme when we launched the largest council housebuilding programme for almost two decades—I know that that gratified my noble friend Lord Graham—and announced plans in our manifesto for a new generation of council housebuilding alongside reforming council house finance to replace the housing revenue account; and this at a time when considerable investment of billions of pounds was being put into the decent homes programmes, transforming hundreds of thousands of council properties. Will the Minister tell us about the proposed review of the housing revenue account? What is its remit? Given the Government's determination to devolve powers and freedoms to local government, will these include the freedom to operate a robust programme of council house building? So far as concerns rents, the Minister will be aware of the convergence between council and RSL rents. Do the coalition Government have in mind any changes to this? Are they giving any consideration to convergence between social rents and private sector market rents?
Much of our discussion has been not only about the quantum of housing, but about its quality and sustainability. We do not need just more homes, but more quality homes that are built to a high standard and respond to the challenge of an ageing population, built to Lifetime Homes standards to facilitate, as my noble friend Lord Morris said, independent living.
We would welcome hearing more from the Government about how their changes to the planning system will improve opportunities for affordable housing. True to form, the Secretary of State has blundered into changes by originally announcing the scrapping of regional spatial strategies without any explanation of the consequences and without legal authority for the decision. A subsequent letter has thrown some light on the residual situation, but not before a good deal of confusion was created among planning authorities, with decisions being held in abeyance and schemes being deferred. This has done great damage, as well as a disservice, to the construction sector as it begins its recovery. The noble Lord, Lord Burnett, made a point about the confusion out there. I say to him that it is his Government who are scrapping the Infrastructure Planning Commission, which is all about expediting approvals for major investment.
We are told that the regional spatial strategies will be replaced by local spatial plans. There will be no central targets, but supposedly powerful incentives so that people will see the benefits of building. We have to await the details in the consultation later this year and reserve judgment, but our concern must be to ensure that the sum total of local planning reflects national as well as local needs, that affordable housing and mixed communities are not marginalised and that the system is fair to disadvantaged groups such as the Traveller community. With no national targets, it is difficult to see how the system would work without a penalty component, as some local authorities will just opt out. There are already signs that some councils, left to their own devices, simply will not support affordable housing in their area.
Section 106 agreements have provided a vital source of funding for affordable housing and infrastructure, and have helped ensure the growth of mixed rather than segregated communities. However, arrangements have not always worked well or consistently, as we heard from the noble Lord, Lord Teverson, particularly in times when land values are not increasing. We proposed some scaling down of Section 106, but alongside the introduction of the Community Infrastructure Levy, which the Government are now to scrap. What can the Minister tell us about the future of Section 106 and local incentives, and how this component of funding for affordable housing is to be secured for the future? Will the noble Baroness confirm that Section 106 arrangements are to endure; or, as my noble friend Lady Ford intimated, are they to be scrapped? Can we know more precisely what tax incentives are proposed for local authorities?
Despite the progress made in recent years, the prospect of a decent home is still a dream for too many people. In these difficult economic times, when judgments have to be made and priorities set, we need to protect and promote affordable housing. As my noble friend Lord Sawyer said, it is a matter of political will. This debate has been a valuable contribution to this endeavour, but we will have much to scrutinise in the coming months.