British House Building Industry

Debate between Siobhain McDonagh and Justin Madders

Thursday 5th September 2019 Commons Chamber

[Siobhain McDonagh]

I absolutely agree with the hon. Gentleman and would love an opportunity to have a debate about planning law, building on the green belt and other matters. I could speak at great length about them, but I will not because I want to allow other people to get in.

I would like Members to focus their attention on pay. Some of the figures are staggering. Let me be clear: I am new Labour to the core. I have no problem with successful business people earning a lot of money, but what happens in this sector goes beyond earning a fair day’s money. I was furious to see that, almost exclusively on the back of the British taxpayer through Help to Buy, Persimmon awarded its former chief executive Jeff Fairburn a staggering £75 million bonus, despite an appalling record of utterly substandard homes. How can that be right or fair?

[Justin Madders (Ellesmere Port and Neston) (Lab)]

That is a truly staggering pay packet. Does my hon. Friend agree that, given that Persimmon has recently given back the freeholds in Cardiff that it mis-sold to a number of homeowners, it should do that for everyone to whom it has mis-sold in the whole country?

[Siobhain McDonagh]

I completely agree with my hon. Friend and congratulate him on all the work he has been doing. Without the attention he has given the issue, much would not have happened.

Let us be clear: the money does not flow through the companies. Thanks to excellent new research from the High Pay Centre, I can reveal the quite extraordinary pay packets of the 10 FTSE 350 house building companies. In the heart of our country’s housing crisis, the four FTSE 100 house building companies spent an eye-watering £53.2 million on their CEO pay. David Thomas at Barratt earned £2.811 million; Peter Redfern of Taylor Wimpey earned £3.152 million; Tony Pidgley at Berkeley reached £8.256 million; and Mr Fairburn, formerly of Persimmon, got a whopping £38.9 million.

Social Housing

Debate between Siobhain McDonagh and Justin Madders

Thursday 13th June 2019 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

First, let me congratulate my hon. Friend the Member for Warwick and Leamington (Matt Western) on securing this debate and on his excellent introduction. He is right that social housing is absolutely central to what we, as politicians, are here to do. It is damning to see the empty Benches opposite—it really does send out a very poor message to the rest of the country about where our priorities are at the moment.

As most Members have already said, week in, week out, housing problems are a No.1 issue in my constituency surgeries—whether it is to do with a lack of affordable housing, poor living conditions, homelessness, or landlords simply not rectifying problems in properties. We can talk about house numbers in the hundreds of thousands, but we should not forget that at the heart of this matter are real people facing real difficulties because we have had nine years of failure. Sadly, it is no exaggeration to say that this Government have failed across the board when it comes to housing. They have failed buyers and renters alike. They have allowed the leasehold scandal to emerge, and they have failed to tackle the root cause of the problems that the sector is facing.

I am pleased that today’s debate is focusing on social housing. It is no coincidence that the steep decline that we have seen in social house building has coincided with an increase in homelessness and soaring private rents. Since this Government came to power, rents have become increasingly unaffordable, with private renters spending, on average, 41% of their household income on rent. In those circumstances, it is no wonder that more than half of private renters say that they struggle to meet their housing costs. Worse still, Shelter reports that a third of low-income renters are struggling to the extent that they have to borrow money just to keep a roof over their head. That means that putting money aside to save for a deposit so that they can eventually own their own home is completely unrealistic. A lack of social housing has put enormous pressure on the private sector, which means that a quarter of private renters, equating to more than 1 million households, rely on some element of housing benefit or universal credit to keep a roof over their head.

We have already discussed the Supreme Court judgment yesterday on the local housing allowance, which demonstrates the current injustices in the system. I know that in Neston, in my constituency, rental costs for a property are at least £150 a month more than the local housing allowance provides for. That is a totally indefensible and unsustainable situation, but what choice do people have? The decline in social housing stock has left more than 1.1 million people trapped waiting for social housing, with many of those families facing greater instability with rising rents in the private sector. At the same time, the number of homeless families living in temporary accommodation has increased to 74% since 2010. Let us just think about that. These are young people who may be forced to move out of area, potentially affecting their schools, their family connections and their jobs. Temporary accommodation really does strike at the heart of what we are trying to build with families in this country.

Welfare reforms have made private sector landlords increasingly reluctant to let to tenants who rely on housing benefit. As we know, many landlords simply refuse to accept any tenants who are in receipt of benefits. This is a discriminatory practice, and I pay tribute to Shelter for its campaign on that. Sadly, though, it is a fact that someone who is facing homelessness is not going to look to bring a court case for discrimination; they will simply look elsewhere—if there is anywhere else to look. The reality is that landlords’ behaviour will carry on in this way, while local authorities, in an ineffective attempt to discharge their statutory duties, will continue to hand out lists of private sector landlords to those facing homelessness, but those landlords will never actually rent their properties to those people because they are in receipt of benefits.

[Siobhain McDonagh]

Both of my parents came to Britain from Ireland at the end of the 1940s, when there were postcards in the windows that said, “No Irish, no blacks, no dogs”. Does my hon. Friend agree that if there were such postcards today, they would just say, “No benefits”?

[Justin Madders]

I thank my hon. Friend for her intervention. Yes, we were familiar with the sign, “No DSS”—the one that used to apply. Letting agents, lenders and landlords all need to get the message that they are operating a potentially discriminatory policy. This really does go to the root of the difficulties we have when people are making homelessness applications. If they get a section 21 notice, that does not seem to have much effect on priority. It is almost as though there is a waiting game. Court costs, eviction notices, stress and uncertainty all have to come before any real priority is applied to people who are facing homelessness. The system is not working; it is under tremendous pressure and supply is nowhere near meeting demand.

Why do we still have the bedroom tax? Six years on, the same injustices carry on. I regularly see constituents who are still paying it and have been paying it for six years now. It is absolutely causing havoc with their finances. They are getting into debt and struggling to pay their day-to-day costs—and for what? To pay this unfair tax with money they do not have. If we have a new Prime Minister who genuinely wants to show that they are different from what has gone before, the first thing they should do is abolish the bedroom tax.

Of course, it is no coincidence that at the same time as we are facing this crisis in social housing, home ownership is also declining. Just a quarter of people born in the late 1980s own their own home by the age of 27, compared with 33% of those who were born five years earlier, and 43% of those born earlier than that, in the late 1970s. There is a clear trend here. There is a danger that an entire generation will be locked out of home ownership, because there is no sign of the situation improving. A major part of the reason for this collapse is that house prices have grown far faster than incomes, leaving young people struggling to meet the affordability tests set by lenders. Even if they are able to save the tens of thousands of pounds needed for a deposit in the first place, it is still a struggle, because the average home in England now costs eight times more to buy than the average pay packet. There are 900,000 fewer homeowners under the age of 45 than there were in 2010. The trend is going backwards, and that is why there is so much need for more social housing.

We must build new social homes and affordable homes, both to rent and to buy, for all those who need them—yes, for the most vulnerable, but also for those in work and on ordinary incomes, for young people, for families locked out of home ownership, and for older people reaching retirement who are facing old age in insecure, unaffordable, unsuitable properties. All those people are being failed by current housing policy. We are facing a situation where, for the first time, children can expect to earn less than their parents. After decades of the number of houses being built failing to keep up with demand, we are at a crunch point where home ownership looks out of reach to an entire generation.

I am pleased to say that my local authority is taking the lead on this. Cheshire West and Chester Council has now built in Ellesmere Port the first council housing we have seen in 40 years, as part of a mixed development. I was absolutely delighted to welcome the shadow Secretary of State, my right hon. Friend the Member for Wentworth and Dearne (John Healey), to this new development only last month. I am very proud that after 40 years, we are starting that development, but due to the huge increase in right-to-buy applications, we are not even standing still. Of course I support people’s aspiration to own their own home, but the right-to-buy policy is incredibly short-sighted, because the reality is that far from there being one-for-one replacement, there is probably about one property being replaced for every four sold. I agree with the Local Government Association that this situation is completely unsustainable. The loss of social rented housing pushes more families into the private rented sector, further pushing up rents and exacerbating the housing crisis. In addition, as we have heard, some of these houses end up in the private rented sector, which again pushes up rents.

It is a gargantuan task to replenish this country’s depleted housing stock. I am pleased that after many years of stagnation, we are seeing quite a lot of house building going on in my constituency, particularly on brownfield sites, but very few of these developments have any affordable housing. That is because the permissions were all granted some time ago, and the developers used rules brought in under the coalition Government to plead poverty and tell us that they could not build affordable houses because they could not maintain their 20% profit margins. As a result, all these new houses are being built, but on just about every private development in our constituencies hardly any affordable housing is being built. Most developers sought release from those obligations four or five years ago but have only started building in the past couple of years. It is therefore quite clear that the affordable housing was not the problem; it was about what they wanted to do to maximise their profits—it was greed. If we are going to build ourselves out of this housing crisis, we cannot continue to rely on the same avaricious developers who have got us into this mess in the first place. A cursory look at the leasehold scandal tells us everything we need to know about the priorities of some developers.

There is a massive job ahead of us, and things need to change. Enough is enough. My Front-Bench colleagues have set out a very ambitious plan about how we can achieve this. Yes, we need to build 1 million more genuinely affordable homes; yes, we need to target Help to Buy on first-time buyers on ordinary incomes; and, yes, we need to give councils the freedom to build and retain council homes for local people. But we need to get on with it now. This Parliament is broken. We look around and absolutely nothing is happening. The Government are incapable of making decisions. Every day they spend arguing among themselves is another day further away from tackling this urgent and very real crisis. This country deserves so much better.