Housing: Affordability and the Underoccupancy Charge

Lord Sawyer Excerpts

Thursday 31st October 2013 Lords Chamber

[Lord Sawyer (Lab)]

My Lords, I thank the noble Baroness, Lady Quin, for initiating this debate, along with the noble Lord, Lord Whitty. I also congratulate the noble Baroness, Lady Bakewell of Hardington Mandeville, on her maiden speech, and offer congratulations on her 40th anniversary as well.

I am the last Back-Bench speaker; many people will be pleased about that. This has been a good debate and people really understand this issue about tax. I was going to speak about the tax. I now do not intend to do so because it has been said so well so many times. Instead, I will offer a few reflections on how the issue makes me feel and how it affects the life I live in the community in which I live and which I care about. My overriding feeling about the housing issue is depression. The noble Baroness, Lady Bakewell, said that her contribution was slightly in that vein. I think it is almost impossible to see it any other way. The statistics, the evidence and the experience of people who care about and need housing has been quite unsatisfactory for many years.

In a way, my generation has let our children down. The noble Baroness, Lady Turner, spoke about what happened after the war. My parents’ generation really rolled their sleeves up and did something about the housing shortage, about the bomb damage and the slum clearance; they really tackled it. For many reasons which we have heard this afternoon, we have not been able to do that. We have left our children with some awful housing problems to face.

I listen to what has been said and I hear people with vast experience speak about policy, a critique of a policy, a new policy and so on, and I do not think that is what we need. Policies are no longer enough. We have heard this afternoon about poor-quality housing, overcrowding, homelessness, soaring prices, the private rented sector boom, extortionate rents, the buy-to-let boom, brownfield sites, green-belt sites, high-rise versus low-rise and funding issues. Is that an agenda that needs another policy? I do not think so—it needs something bigger than that. It needs a much bigger vision, a strategy. It needs a strategy which cannot be brought forward by this Government because it is too short term. We really need to be looking at the contenders for the next general election and for the London Mayor and to ask them, “What is your vision? What is your strategy? What have you got to say about solving this housing crisis?”. It is that big, and that is the sort of thing that it needs.

Then I look around me at where I live and the people I care about. Part of my family is living in London now. I look at what is happening in London and at the developments which have taken place. I look at the Shard and the price of flats there, the Cheesegrater, the Walkie-Talkie, the development in Vauxhall, and I think, “My goodness me. This city is on a real roll. It is undergoing a commercial, economic and business boom the likes of which none of us has seen in our lifetime”. Then I think, “What is happening to us?”—that is, what is happening to me? What is happening to my family and to people who do not actually live or work in these places and cannot afford to live there? What is going to happen to us? That is where we get back to the bigger picture of the strategy for housing people in London.

I do not know whether noble Lords read Michael Goldfarb on London in the Observer a couple of weekends ago. I thought it was a really powerful article. He said that the property market in London is no longer about people making long-term investments and owning their own home, but a place for the world’s richest people to get a return of about 10% at an annualised rate by buying houses there. In 2012, an extraordinary £83 billion of flats were purchased in London without mortgages and no financing. He also said that with extra foreign and domestic millionaires and billionaires, it is not just the rate of return but the coalition’s tax regime. Britain has a corporate tax rate of 23%, due to come down to 20% in 2015. In Germany it is 29%. Again, while the majority of London citizens pay up to 40% or more of their incomes to maintain services in London, the rich pay taxes in small change. His answer was a mansion tax.

I can certainly indentify with this. I can see a rich person’s London which does not affect me, my family or my neighbours. That has to be addressed. There must be a way of making sure that the same attention is given to ordinary people and their housing needs as is given to big business, capital and commerce. There has to be a way of doing that. As the noble Lord, Lord Shipley, said, the responsibility to make that case rests at the door of the politicians. It will not be made by business people or commercial people; we have to make the case for as much attention for the people that we want to house as business and commerce manage to make for the people that they represent.

Those, therefore, are my thoughts on the debate. I am glad that the noble Lord, Lord True, is back in his place. He said that nobody has a right to live where they were born, and I think that that is probably accepted. However, people have a right to a home in the place where they live and work. We are not talking about everyone staying where they were born but about being able to find a job and have a home where they can easily and without too much difficulty travel to the place where they work. That is what the aim of the big picture strategy needs to be.

I was not going to speak about the bedroom tax, because it has already been covered. However, the noble Lord, Lord True, provoked me into saying that everyone calls it a bedroom tax because it feels like a tax. The amount is taken out of your benefit at source and you are left with a rent bill that is beyond your means. The Government cynically believe that the poor will find the money, but of course many cannot or they find it only because they deny themselves other basic things such as heating and food, and they may get some way forward by asking their families for help.

Data from the Notting Hill Housing Trust show that about half its affected customers pay the shortfall in full, and only one in 10 makes no effort to pay. In reality, of course, the Treasury has already banked their money, contributing millions to the Government’s cuts programme. The local authorities and housing associations have to try to get this money from the tenants on benefits, who are by definition the poorest people in Britain. It is not easy, but as has already been said today, the shortfall will be borne by social landlords and it will no longer be the Government’s problem.

It is pretty brutal for the people who are having their benefits cut. I am on their side and I have no doubt about that or problem with saying it. I am on the side of the poor, the needy and all the people who legally come to work in this country, whatever their nationality. Those people have a right to live and to eat in the same way that I have—I do not see any distinction. If I have a home and job and the wherewithal to have a decent standard of living, I expect it for everyone in this community, regardless of their origin or their birth.

Finally, I am now looking ahead, to the next Government and the next Mayor of London, to give us some hope for the future. I have been here for only 15 years—other noble Lords have been here longer than me—and I must have taken part in about 12 to 15 debates on housing, maybe more. They have not made the slightest bit of difference and none of the policies that have been tried by any Government or party has solved the problems. I therefore look to the future for something much more imaginative and engaging, which can get this nation fired up to do something about housing needs and the young people we are letting down so badly.