Construction Industry

Lord Young of Norwood Green Excerpts

Thursday 23rd October 2014 Lords Chamber

[Lord Young of Norwood Green (Lab)]

My Lords, I, too, congratulate my noble friend Lord O’Neill on bringing this debate to the House today. It has been a fascinating debate. I cannot possibly hope to respond to all the various aspects that have been raised. I wish the Minister luck in trying to deal with them.

This debate has exposed an issue that is vital for the economy of the country and the social well-being of our communities. When I listened to my noble friend Lord Prescott talking about what he tried to do, I could not help reflecting that he did not mention refurbishment—if he did, I did not hear him. Of course, we put a lot of capital, time and effort into ensuring that properties that had been neglected for tens of years were brought up to a reasonable standard. It did not solve the problem of ensuring that affordable housing was available not just for those in desperate need but for a wide range of people across the country.

An issue that has been raised that is dear to my heart is the question of skills in the industry. It is one of the key challenges if we are to try to deliver. If we form the next Government, we intend to adopt the recommendations of the Lyons housing review on renewing skills. Once again, we had a good briefing pack from the Library. The comment on people and skills—because of the shortage of time, I shall refer only to a bit of it—states:

“Global and domestic opportunities in construction mean that a skilled and flexible workforce will be vital to the UK construction sector’s future performance and competitiveness. Evidence on qualifications is positive, showing increasing proportions of individuals with higher level qualifications”.

That is the good news.

“However, there has been a substantial fall in apprenticeship completions in construction related industries in the last three years while completions in other sectors have continued to grow”.

That point was made by several contributors to the debate today. My noble friends Lady Dean and Lord Macdonald of Tradeston mentioned the fact that we face not only the low number of completions but the demographic challenge of about 400,000 people retiring. It is a huge challenge to ensure that we get those skills.

There is still a job of work to do in trying to encourage young people to understand that not all of them need to go to university to get a good career and that there is real potential in engineering and construction out there to provide them with valuable careers and a lifetime of valuable work. When I go into schools and speak to 16 year-olds, I see little or no awareness of apprenticeship schemes, and little or no awareness of jobs like engineering and construction. There is a huge job of work to do in convincing not only young people but, I suspect, parents and teachers as well. Teachers are still too focused on thinking that the solution to all our problems is to send all young people to university, regardless of whether it will suit them. That is a key part of solving this problem.

It is perhaps right that there has been such a lot of focus on planning in this debate. I always enjoy hearing my noble friend Lord Rooker remind us in his robust manner about the reality of what we mean by green belt, and about how much of that land probably should not be described as green belt and ought to be available to be built on. Of course we need to set it in the right planning context, but what we have at the moment simply will not enable us to produce the number of houses required.

We face the biggest housing crisis in a generation. Levels of housebuilding have dropped under this Government to the lowest in peacetime since the 1920s. For many years there has been a systematic failure to build the homes that our country needs. We need to tackle the deep and underlying causes of this crisis. We have a housing market that is not working, insufficient land coming forward, a decline in housebuilding capacity and communities feeling that they have no influence over where new homes will go.

Labour has endorsed the comprehensive plans set out today by Sir Michael Lyons’ housing review—an independent review, the first of its kind in a generation. My noble friend Lord Morris called it a modest start. Well, it may be modest, but if we can achieve just some of the recommendations then we will have made real progress. It sets out how Labour will meet its commitment of building 200,000 homes a year by 2020. One noble Lord said that it ought to be 300,000. Well, if we can hit the 200,000 it will be a significant achievement. It sets a course for doubling the number of first time buyers by 2025. We believe that only Labour has a plan to tackle the housing crisis.

Today, Labour is announcing three key policies. These will make sure that local communities have the power to build the homes that are needed in the places that people want to live; that local councils produce a plan for home building in their area and allocate sufficient land for development to meet the needs of people in the area—there are still too many local authorities that have not produced the development plans; and that first-time buyers from the area can get priority access rights when these new homes go on sale. We know that in many cases that just does not happen.

Other major recommendations include powers for groups of local authorities to collaborate and form Olympics-style new homes corporations to build on our designated land at pace. The Olympics was mentioned. It is a good example to quote for a number of reasons. My noble friend Lady Donaghy pointed out how safe a construction site that was, with not even one fatality. One other point about the Olympic site has been mentioned as regards the technology employed, the comprehensive analysis made of the site and the fact that we insisted that apprenticeships ought to be part of that process. Three hundred apprentices were employed. We have been telling the Government again and again, “If you are going to have large public procurement contracts, training and apprenticeships ought to be part of that contract”. I await a positive response on that but I am not holding my breath.

Other recommendations include measures to drive competition in the housebuilding industry and increase capacity, thereby expanding the number of small firms rather than the depletion that we are seeing at the moment. A number of noble Lords mentioned the very real problem of late payment, and I think it was my noble friend Lady Donaghy who reminded us about the unfortunate fact that there are still too many examples of bogus self-employment in the construction industry.

Other recommendations include a help to build scheme to underwrite loans to small builders to get them building again, fast-track planning on small sites and financial incentives to local authorities so that they deliver a programme of new garden cities and garden suburbs to help unlock 500,000 homes.

Those are ambitious targets. My noble friend Lord Haskel talked about a crusade. The word is not a piece of hyperbole—he is right: we need a crusade. We need to do something about the situation where young people are beginning to feel that, no matter how hard they save, no matter how they strive, they will not be able to get a foot on the housing ladder. We have a situation where, as my noble friend Lady Dean reminded us, more and more young people are still living with their parents and their dream of owning a home of their own is fast disappearing.

Building more homes will not simply revive our stagnating construction industry; it will also change the lives of families across the country. At the moment, because of the pressure on housing supply, rents are impossibly high. When you add to this the rising utility bills that households are experiencing, it is easy to see why many across the country are struggling. I shall pick out just one example. The latest figures reveal that the south London borough of Croydon has been worst affected. Croydon has seen the highest increase in working families who are having to claim housing benefit because they cannot afford the higher rents. Before Labour took control of the council in May, the number of claimants had increased from 1,050 to an astonishing 12,500. It is not just a London problem, it is happening across the UK. Take Fareham in the south-east, for example, where the number of working families claiming housing benefit has increased from 113 to 1,111, or Pendle in the north-west, where the number increased from 134 to 1,175. What does the Minister have to say to the 12,500 people in Croydon, and the thousands of other households across the UK, who are being forced to claim housing benefit on top of their wages to pay the rent? Does he really think that this is an economy that is working for everyone?