Housing

Lord Palmer of Childs Hill Excerpts

Thursday 6th June 2013 Lords Chamber

[Lord Palmer of Childs Hill]

My Lords, I thank the noble Lord, Lord Dubs, and all the speakers who have preceded me, because many of us are covering the same ground and have similar statistics—if I repeat any, please forgive me. However, all of us who are speaking care about this issue, otherwise we would not be speaking here today. I also declare an interest as a long-term councillor on the London Borough of Barnet. Unlike my noble friend Lord Tope, who has been a councillor since 1974, I am a much more recent addition, having been a councillor for only 27 years.

I will talk first about the supply of council housing. Council housing demand was outstripping supply towards the end of the 1990s. Even the hardest to let high-rise properties were taken by families in desperate circumstances. The national figures bear this out. By 1997 the number of families on housing waiting lists had reached just over 1 million. Sadly, in the years of the previous Labour Government—which the noble Lord, Lord Dubs, referred to as the next Labour Government—the waiting lists rose to around 1.8 million while the number of affordable homes fell by some 420,000.

A big help towards solving this will be the housing investment programme promised by the coalition Government. Over the lifetime of this Parliament, the coalition Government are investing to build some 170,000 affordable homes—a much needed increase that will benefit those most in need. Overall, if this is met—and I believe it will be—this will be the first Government in more than 30 years to deliver a net increase in social housing stock.

With regard to investment in social housing, investment in the condition of stock was linked arbitrarily by the Labour Government to ownership and management models instead of need. Decent Homes funding was restricted to boroughs able to persuade their tenants to transfer out of direct council ownership and management, either to other stock transfer or to an arm’s-length management organisation, or ALMO. I was a founder member of Barnet Homes and for many years a director of that company. Barnet Council took the money and improved the property under the Decent Homes schedule. Many other local authorities did not want to do this and kept their housing, so by the end of the Decent Homes programme, more than a quarter of national council housing had not been improved to meet government standards.

Large transfers of council housing to housing associations, together with a programme of mergers, have led to much larger housing associations in recent years. The best of them have developed their governance to engage and involve their tenants and residents, and this good practice must be spread across the whole sector. Many of us perhaps come across housing associations where the governance is not as good as that. When I, as a local councillor, seek to speak to someone in some of these local housing associations, the staff have all changed from top to bottom, and I cannot use the contacts I used when just talking to the borough housing department.

One of the biggest problems faced at the end of the 2000s was the grinding to a halt of the housing market and the building of new homes. Some estimates say that there has been an annual shortfall of more than 100,000 properties being built despite the growing number of households in Britain. Turning around the mortgage market has been a challenge to reversing this crisis. This was referred to by other noble Lords. The Government have been innovative in promoting schemes to kick-start mortgage lending. However, I worry about this policy. It will increase the prices of homes because the money will be chasing fewer properties, and this will mean that the properties are more expensive in London—more expensive than anyone at the lower end of the scale can afford. It will also mean that if the housing market does not keep rising, the owners of those properties will have negative equity and find it difficult to sell them. If there is a shortfall—of 20%, or the 120% referred to by noble Lords—that risk will be covered by the Government rather than by the banks, because that part of the loan has been financed by the Government. That is not a sensible policy, and I ask the Minister to comment on how we can ensure that this boost to mortgages does not mean a big rise to existing properties without any security if there is a downturn in the housing market.

I turn to what is called a bedroom tax, which seems to be what we have to call it nowadays, although it is the extra bedroom in people’s properties. While there are understandable concerns from tenants—which I have heard from tenants in my own ward who are affected by the changes in housing benefit—the debate about subsidies for spare rooms might be improved, or better understood, if we were prepared to accept that the Labour Government first introduced this measure for private sector tenants claiming housing benefit as far back as 2007. You got the benefit for only the number of rooms that you needed, so that concept was there before. They did not make any exceptions to that policy, for example for disability, carers, military families and so on, which are at least in the present policy. However, that policy is not quite right and, in particular, while it is all very well to introduce the policy, it is completely wrong to say, as my Government did, that it should all come in on 1 April, which it did, when there are no one-bedroom properties for those people to transfer into. Such a policy should have been graded in and we should try to make some exceptions for people who would be willing to live in a one-bedroom property, if only there was such a property to which they should be transferred.

On the impact of universal credit, it is understandable that people, while welcoming the principles behind universal credit, are nervous about some aspects of the detail. However, I think I speak for many people who support the aim of making work pay and making the transition from benefit to work manageable. Converting benefits to a monthly payment from which we will ask people to budget sensibly would seem to be a necessary conclusion. However, if housing landlords cannot continue to collect housing benefit directly from the Government, we will see that some tenants, strangely, will decide that their priorities are buying food and other things rather than paying their rent, and we will get back to a stage where there are large underpayments of rent because the money is being paid directly to tenants.

As I said, we are building 100,000 fewer homes than we need each year. Over the next 10 years, approximately 230,000 more households a year will need properties, and we are not meeting demand. As my noble friend Lord Tope said, there is a housing crisis—but it is not new. There has been a crisis for a long time, and we have to build our way out of it. All noble Lords have said this in one way or another. However, the proposed reforms to planning law to permit sizeable extensions without planning restrictions are a recipe for neighbour strife. The idea that you can build over the larger part of your garden and not have to go through the normal planning regulations, and that your neighbour will have only a certain amount of time to object, is a recipe for disaster. Under the present planning system, in my borough the majority of planning decisions for houses—we are not talking about big developments—are delegated to officers, so the resident who needs an extension is already dealt with pretty swiftly. Very few applications come to the housing committee.

I have not found a record of a single new development of more than 13,500 homes in the UK since the 1970s. In the latter part of last year, the Deputy Prime Minister said that we should re-examine garden cities. I was somewhat pre-empted earlier today by the Question about garden cities that was asked, but I will develop the subject a bit more than one can do in a Question and Answer. Letchworth was the first garden city in 1903. Then came Welwyn, and in 1946 the New Towns Act was passed. As a very young chartered accountant, I decided on my own initiative to go and audit Basildon new town development. It was a rude shock to the developers and contractors when the young accountant came up and said that he was from the external auditors. I thought that they were going to die on the spot. They fed me very well as they gave me a tour. This massive Basildon development was built during my professional career. It was not that long ago.

Do we continue to try to satisfy housing need by building higher and denser, and by permitting haphazard urban sprawl? Apparently we already build the smallest homes in western Europe. My noble friend Lord Tope talked about the 32 standards in London. In my early involvement in housing, we talked always about the Parker Morris standards. We should have a uniform system of housing so that everybody knows the minimum—not the maximum—standards. That system has long been forgotten. We should ask where the next Milton Keynes will be. People there do not just live in the city but commute into it, which is a sign of its success.

Other noble Lords talked about acquiring more land for building, both from local authorities and from government, but the big issue is how developers hold land banks because they increase in value. There should be a penalty system, however one describes it, so that if you hold land for a longish period and do not develop it, you should be taxed in some way on the holding of that land, to encourage you to build properties that people can live in. The Government should promote or encourage this way forward, which will take longer to achieve but will be needed to tackle the deficit in housing.

We need to pursue the proposal for further garden cities. I hope that the Minister will say how this will proceed in a proper, organised manner—not piecemeal, by looking at one possibility and then perhaps taking a long time over it—with a national plan so that we can decide where the new towns and cities will be. Without large-scale development we will not satisfy the deficit in housing from which this country suffers.