Housing and Homes

Richard Bacon Excerpts

Tuesday 15th May 2018 Commons Chamber

[John Healey]

I have less concern than the hon. Gentleman about that. I recommend that he read the Green Paper. The point of Labour’s proposal is to create almost a parallel market that is permanently affordable to local people who are in work and on ordinary incomes—the very people the Government are currently failing and to whom the housing market is closed. [Interruption.] I give way to the hon. Member for South Norfolk (Mr Bacon). No? I beg your pardon, Madam Deputy Speaker. Labour’s policy on home ownership is about first-buy homes, first dibs for local people in all new developments and tightly targeted Help to Buy. That is the real hope that first-time buyers need.

I promised to come back to the hon. Member for Hertford and Stortford (Mr Prisk) on private renters. Since 2010, the number of households renting privately has gone up by more than a third, and there are now 5 million households renting privately throughout the country. The one thing that we cannot do is see a further slide back to those bad old days around the time of the second world war, when we had private rented housing that was unregulated, overpriced and badly maintained, and it was the only default housing for people earning ordinary incomes. What is needed is very clear: it is Labour’s plan for legal minimum standards, longer tenancies, a cap on rent rises and local licensing to drive out the rogue landlords. They are similar consumer rights that we all expect and all have in other markets, but not in housing.

Finally, the tragedy and unforgiveable scandal of the rising levels of homelessness in this country, particularly of those sleeping rough in the streets, is that we know what works because we have done it before. We did it before when the country was faced with rising homelessness in the early 2000s. Our action as a Government then led the independent Crisis and Joseph Rowntree Foundation homelessness monitor to declare that, by 2009, we had in this country seen what it called an unprecedented decline in homelessness. We back the new Homelessness Reduction Act 2017—we pay tribute to the hon. Member for Harrow East (Bob Blackman) for steering it through—but we cannot help the homeless without more homes. I say to the Minister: go beyond the Housing First pilot; consider requiring housing associations to set aside, let us say, 8,000 of their homes across the country so that those with a history of rough sleeping have a low-cost, secure home in which to rebuild their lives; and then help to fund a replacement, like for like, of those homes.

[Mr Richard Bacon (South Norfolk) (Con)]

rose—

[John Healey]

I gave the hon. Gentleman the chance to speak earlier. I will conclude now, because many Members wish to speak.

In conclusion, this has been a disappointing first debate with the Secretary of State, who seems—[Interruption.] I listened very carefully, but saw no evidence that he is willing to challenge his own Government’s thinking or to make the radical changes required to fix the housing crisis. This is the test for the Secretary of State and for the Government. It is a big challenge to political thinking, not just to policy decisions. When the evident answer to the housing crisis lies in a bigger role for councils, stronger regulation of private markets, greater investment by Government in new low-cost homes, higher legal standards on everything from energy efficiency to safety, and tougher conditions on public contracts and public funding, it is clear that Conservative ideology, not just Conservative policy, must change. I say to the House that it is also clear from the Secretary of State’s speech this afternoon that the country will only see this change—the change that millions of people need and want—with Labour in government.

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[John Penrose]

The hon. Gentleman leads me to my next point.

The current situation is the wrong way around. It should not be easier to buy land, do nothing, aim to get planning permission and then flip for a profit than it is to build houses. From a moral and an economic standpoint, design and construction should be the things that add value to land, not hope or speculation. Planning permission is a huge and value-creating decision. The decision is taken by each local community, so they should see some of the value that is created. We need a tax on the speculators’ profits, paid straight to local councils on the day that planning permission is given or changed, in order to fund the local services that turn dormitories into communities.

[Mr Bacon]

It is great to hear a radical speech. I hope that those on the Government Front Bench are listening carefully. Will my hon. Friend come to the next Right to Build expo, which is run by the Right to Build Task Force, and speak about lowering the barriers to entry so that more new players can come in? For example, governors of high schools or NHS trusts wanting to use housing as a recruitment and retention device should be able to get involved in this space.

[John Penrose]

I would be delighted to accept my hon. Friend’s invitation.

Fortunately we do not need a new tax, which the hon. Member for Stroud (Dr Drew) mentioned, to achieve this value acquisition. Here’s one we prepared earlier—the community infrastructure levy. The levy nearly does what we need and could easily be tweaked so that it does what we need by making it simpler and broader with fewer exemptions. It would be simpler, faster, cheaper and more predictable for developers, planners and landowners alike. Best of all, the revised community infrastructure levy would completely replace the hideously overcomplicated section 106 agreements, with all their uncertainty, unpredictability and lawyer-friendly viability assessments.

Finally, in order to get developers building faster, councils should be able to charge business rates and council tax starting from the day that planning permission is granted, rather than when developers finally get round to start building. We could give big developers a few months’ grace to get their crews on site, but then the meter would start running. They would have a huge incentive to build and sell promptly, rather than to take their time.

Equally important, the same forces would apply to the hedge funds that own derelict brownfield land in town and city centres. These sites already have old, unused permissions, so the clock would start ticking immediately. Just think of the enormous shot in the arm—the jolt of adrenaline—that we would give to urban regeneration projects everywhere, right across the country, if the owners could no longer sit on them for years waiting for something to turn up.

As the Government’s housing White Paper says, the only way to make homes more affordable to rent or buy is to build a whole lot more of them. I agree. There is no time to waste, otherwise house prices will continue to spiral and we will lock another generation out of the dream of a place of their own.

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[Sir Robert Syms (Poole) (Con)]

We all know the importance of housing because we all hold surgeries and have families coming to see us, telling us their personal stories about the impact that the current housing market has on them. We need to build more homes. When I talk to people who develop and build homes, they still complain about the length of time it takes to go through the planning process. The Government really need to look at that.

We need to incentivise those who get planning permission to develop. I am not sure whether I would wholly agree with a penal tax system, but some kind of stick and carrot is needed to give people an incentive to get on and develop. When I drive around Poole, I see sites that have been sitting there for several years. One would think that if there were tax advantages to developing or tax penalties, at a modest level, that might just tip those sites into being developed.

We need to be more ambitious with our plans for helping young people to buy. The Help to Buy scheme is not ambitious enough, nor is the help to buy ISA. Bearing in mind the billions that we poured into the banks, it is a moral, social issue to do our best to get more people buying their own home, if it is right for them and they can afford it. We also need to understand that building is not the only solution. Managing the housing stock is very important. Local authorities talk about voids—these are empty properties—and we ought to be doing rather more to assist local authorities in making sure that the housing stock is being fully and efficiently used.

[Mr Bacon]

My hon. Friend mentioned the delays in the planning system, which still exist. He might be interested to know that when I visited the Netherlands in January, I was shown projects for which, because there is much greater planning certainty, planning consent is often given within two weeks.

[Sir Robert Syms]

That might be too efficient for the British system, given that everybody has to have their say. Nevertheless, I think we could do a lot better than we are doing.

There are a number of other areas in which we can do better, including managing the housing stock. I think there are something like 2 million empty flats over shops that are not being used by families. We all know about the major, substantial and probably permanent changes to the high street. We are over-shopped—many areas will never have shops, partly because of the impact of the internet. Perhaps the Government ought to be a bit more ambitious in turning some of those shops into homes. That would have the added win of bringing people back into our town centres and making them nicer places to live.

Our probate system is inefficient. At any one time, about 1 million homes are hung up in the probate system and cannot be sold because they are going through those legal processes. Why can we not look at the probate system to see whether we can clear houses through it before probate is granted or to try to just speed up the whole process? It is expensive enough as it is, and many homes cannot be used during that time.

In some parts of the country we are still demolishing homes, which cannot be a good thing to do. It is bad environmentally. Why do we not encourage more homesteading and give homes to people if they are willing to take them and do them up? These things can be done and they would increase the housing stock.

My final point is to do with private renting, which we all know has taken the strain over the past 10 to 15 years. We also know that many leases are for only 12 months. For peripatetic, young, single professionals, that is not a problem, but if people are married with two kids in a local school and they work locally, it is a problem, because first, there is the uncertainty each year about whether they can stay where they are; and secondly, quite often, for a variety of reasons—perhaps because the landlord wishes to sell or to put the rent up—families are forced to move. We should not forget that when families move, there is a very high cost. That includes the removal van and sometimes the cost of getting new bits and pieces, and so on. If a family with a child doing GCSEs has to move three or four times, it is not good for that child always to be moving into different homes.

If we are going to give security to people, it is right that we should give security to people who can buy. The social housing sector generally gives security to people, and of course we need to build more council homes, but we also need to give more security to those in the private rented sector. Somehow the Government, perhaps through tax incentives or capital gains incentives, ought to try to ensure that leases of three years or five years are available to families. That would take some of the pressure off families with children, who would feel much more content with their lot. Many of the 1.9 million people renting in London cannot afford to buy, so this is a big market, and a politically sensitive market: if people do not feel they have a stake in the country, and if they feel unsettled, they may well take it out on the party in government at the ballot box.

We need to be more creative and forceful in building homes, we need a better planning system, we need to manage our housing stock better and we need to address the glitches in the market so that we can increase the number of homes available. Ultimately, however, we also need to remember those who can only rent and have no choice but to go to the private rented sector. They need rather more help from the Government than they are getting at the moment.

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[Bob Blackman (Harrow East) (Con)]

It is a pleasure to follow the hon. Member for Oxford East (Anneliese Dodds), who made a considered contribution to the debate. I thank Members from across the House for their appreciation for my Homelessness Reduction Act 2017, which has as its centre the aim of reducing the number of people becoming homeless in the first place. Prevention is clearly better than cure, but we have to face up to the fact that, although we can attempt to intervene and to prevent people from becoming homeless, we have to build more homes across the piece that are affordable for people to rent and to buy. That means we have to be radical in our thoughts. The Secretary of State set out a range of things that can be done, but we know that some things need to be done straightaway. He rightly mentioned the Housing First pilots, which I strongly support. However, there are only three pilots, in three parts of the country, whereas this is a nationwide problem. So when my hon. Friend the Minister for Housing answers this debate, I look forward to hearing him say how quickly we will roll out the lessons from the pilots right across the country, so that rough sleepers in other parts of the country can gain the benefit of Housing First, because that is key.

One challenge we face is the unaffordability of housing. One point I lobbied strongly for in the last Budget, and which, I am pleased to say, the Chancellor acceded to, was funding for a national rental deposit scheme and help-to-rent projects. We are yet to hear from the Department as to the various different options that will be rolled out on that. Helping people to rent and providing the deposit would enable 30,000 families to secure their own home, because the one thing they cannot do is raise the deposit to start paying the rent and have a home of their own. We need to be in a position whereby we encourage that process.

Across the piece we are paying out £1.7 billion a year to fund temporary accommodation in this country, and people are in temporary accommodation literally for years—that cannot be acceptable.

We see the price of housing to buy escalating and rents escalating, too. We have to be radical in our thought processes as to how we deal with that. One of the biggest issues is the price of land in the first place. The cheapest land is agricultural land. Speculators move in and get options on that land. When planning permission is granted for alternative uses, the price of that land suddenly escalates. Those people then sell the land on and make money on those options. That cannot be acceptable. We see other challenges in retail or commercial land being transferred to the housing usage class, and there suddenly being a dramatic increase in the land value.

We have to take the land value out of the price of housing in the first place, to reduce the cost of people owning their own homes or, indeed, renting a home. At the same time, we force local authorities to sell their land to the highest bidder, and when they do so, the price of the housing built on that land comes back in the form of a huge housing benefit bill when people rent that housing. We have to close the gap and take the value of the land out of the equation completely.

Older people are now going to be renting well into their retirement—

[Mr Bacon]

Given that housing benefit, which my hon. Friend just mentioned, takes up 3% of public expenditure and costs some £26 billion every year—it has cost £363 billion, more than a third of trillion, in the past 20 years—would he like to see more of that money going into the creation of new dwellings for ordinary people at prices they can afford, rather than enriching more private landlords?

[Bob Blackman]

Yes; my hon. Friend anticipates where I was going. We should tell local authorities, and all other public sector bodies, to gain planning permission for homes to be built on their properties. Instead of paying out huge amounts of housing benefit, we should compensate the public bodies directly from the Treasury for the value of that land, which can then be used for public services. We should then ensure that the rents and prices in the properties built are commensurate with the cost of building those properties, over an extended period of time. Once people have been tenants for 10 years, we should give them the right to buy those properties at the price they were 10 years prior, and then reinvest that money into further new housing. I am a great supporter of the right to buy, but one challenge that we face with it is that we need to invest its proceeds in building new housing.

Those are some of the radical solutions; I cannot do them justice in four minutes, but I hope that we can get some answers from my hon. Friend the Minister for Housing. Finally, may I draw the House’s attention to my entry in the Register of Members’ Financial Interests?

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

It is a delight to follow the hon. Member for Harrow East (Bob Blackman), who had many very good ideas, but we have to talk about the green belt in London. There is enough land to build a million homes that are 10 minutes from tube and train stations and an hour’s journey away.

What is the green belt? What is the land that I am talking about? Is it nice, pleasant and green—somewhere we would wish to spend the day with our families? No. I spent my bank holiday going around and looking at some of these sites. I started over in Hillingdon, where I saw an illegal waste tip and stood on 20 feet of rubble that could be land on which we could build 3,500 new homes. I went along the A40 to Ealing, where I saw, close to a mosque, two schools and a train station, a site covered with building rubble and surrounded by chain-link fencing. I then went to the pièce de résistance: a tyre-changing shop and car-valeting service at Tottenham Hale, where a housing association had had its application for housing turned down because it was green belt.

At some point, we have to stop being frightened of the title and inspect what land makes up this designation. I do not want to build on a park that children use, or on rolling green fields that people enjoy on their bank holidays, but I do want to build on scrappy bits of land that nobody in their right mind would choose to regard as green belt.

[Mr Bacon]

Well said. Carry on.

[Siobhain McDonagh]

I would love to, but I do not want to stop anyone from speaking.

I ask hon. Members from all parties to support my early-day motion on this issue and to support the contribution that we have made to the consultation on the national planning policy framework, which has Members from both sides of this House, academics, housing associations and businesses saying, “Yes, stop it. Please look at the green belt.” We cannot keep talking about building more homes unless we have the means and the land to provide them, and we do, if only we all got a backbone and started looking at what we call the green belt.