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Mr. Archie Norman (Tunbridge Wells) (Con): I am delighted to have a second bite of the cherry on this issue, having had a chance last week to speak in a constructive debate on housing in Westminster Hall. I am particularly delighted because it will also give the Minister a second bite of the cherry. In doing so, I hope that she will apply her razor-sharp intellect to the serious critique that has been advanced by hon. Members on both sides of the House, both of the Barker report and of current Government housing policy. That need not be a partisan or party issue, as many of the points that have been made are not party political or ideological. I hope that she will improve on the contribution of the Minister of State, which was jocular and peppered with facts designed to support the Government's record. In his levity, however, he obscured, to put it politely, any depth of meaning. That contrasted sharply with the serious and substantial contribution from the hon. Member for Ludlow (Matthew Green), in which he advanced constructive ideas and much with which I could agree.
First, this debate is about whether there is an overall housing shortage—the central contention of the Barker report, which, incidentally, was hardly mentioned in the Minister of State's opening remarks. That has also been the underpinning idea of the Government's policy, which is that centrally driven housing targets should cascade down through the regions. Secondly, if there is a housing shortage, what is the nature of the shortage, where does it arise and what is its local context? Thirdly, what are the implications for Government policy?
I shall first address the overall shortage, which is absolutely central to the Barker report. Kate Barker's thesis was that insufficient houses are being built, that the desirable objective of Government policy is to depress the rate of increase in house prices and that, to achieve that, more houses need to be built. Clearly, her contention is that we can build our way out of house price inflation. That is not critically examined in the report, and it is a highly contentious assertion with which few academic economists would agree.
My hon. Friend the Member for Meriden (Mrs. Spelman) and the hon. Member for Ludlow made the point that building our way out of house price inflation
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is difficult, not least because only 1 per cent. of the total housing stock is built every year. It is clear that parts of the country with housing surpluses also experience high house price inflation, which suggests that other forces drive the rate of inflation. We all know that those forces are more likely to be interest rates, because housing has become a financial asset, the rate of increase in real wages and the level of unemployment. Those facts determine the rate of increase in house prices, not the number of new houses built nationally.
A further important point is that the objective of Government policy should not be to depress the price of houses or house price inflation; it should be to reduce the volatility of house prices. The Minister of State referred to the period of negative equity, to which other Members also referred. If we had built more houses at that time, we would simply have created more negative equity and more volatility in house prices, not less. The idea that, with a long time lag, we can somehow build our way out of this problem is complete nonsense and a serious mistake in Government thinking.
It is important to look at the data on which the Barker projections are based—the household survey and projections that were completed in 1996. The critique of that survey is, first, that the 2001 census showed that approximately 900,000 fewer people were in the country than had been anticipated in the projections, and that there were many fewer households, which at a stroke undermined the integrity of the future household projections and determination of housing demand; and, secondly, that a study conducted by Europe Economics, which was included in the Campaign to Protect Rural England's submissions to Barker, demonstrated that we have a surplus of houses in Britain, taken in aggregate, not a deficit. That is not to say that there are not scarcities locally—of course there are in certain types of houses. It is important to recognise, however, that, in the country as a whole, we have 3.4 per cent. more houses than households, and that the figure has increased from 2.4 per cent. 10 years ago. Therefore, it is not a national problem, capable of being treated, as the hon. Member for Ludlow said, with national solutions, but a local problem, and it is related particularly to the character of demand and the changing demographics of Britain.
When discussing this subject, people tend to take the household projections as gospel. If we examine the figures from the Office of the Deputy Prime Minister on future housing demand, we see that the growth in the number of households in Britain is driven not by a rising population, although there is some net increase because of immigration, but by the changing nature of that demand. The biggest single force in the changing nature of that demand is the growth of single person households. Most of that growth is accounted for not by young people who want to live alone, although they account for some of it, or by single parent families, although they too account for some of it—curiously, household projections suggest that there will be no increase in the number of single parent families—but by elderly people living on their own. According to the projections, the driving need in this country over the next 10 years is to adapt our housing stock to the requirements of elderly people.
Our current house building achievement, however, is a rapid increase in the number of houses being built for families, most of which, like it or not, are executive
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homes in the south-east for people who can afford to move out of the cities into the suburbs and countryside. In 2003, only 7 per cent. of the new homes built were one-bedroomed homes. By contrast, 63 per cent.—two thirds—were three or four-bedroomed homes. That represents a total mismatch between what we are building and the future needs of Britain, which is at the heart of the national housing problem. It illustrates the fact that repeating the dogma that we must construct more houses to build our way out of house price inflation and impose centrally driven housing targets on the regions of Britain is complete folly, and will not address the real problems raised by Members on both sides of the House in this debate and in last week's.
Andrew Selous (South-West Bedfordshire) (Con): I am fascinated by my hon. Friend's arguments. The biggest shortage facing my local housing authority is of larger properties: demand is very much at the family end. Does my hon. Friend find that in his area the demand tends to come from older people wanting one-bedroom properties?
Mr. Norman: Of course there is demand for larger homes and family homes in some parts of Britain. In others, there is demand for accommodation for elderly or young people. All demand is local. It needs to be locally defined, and local authorities should be obliged to meet local needs. This is a hard problem to solve nationally, and not one that is susceptible of national, global solutions imposed on regional authorities.
I want to say something about affordable and social housing. In all fairness, I should redress the balance following the speech by the Minister of State. The Government's record is encouraging in some areas but not in others. Given the partisan nature of the Minister's speech, we should have a few facts on the table.
First, although investment in poor-quality housing has increased in some areas—I generally welcome the pathfinder initiatives, for instance—there has been a 112 per cent. increase in the number of people in temporary accommodation under this Government. That is a serious problem for those people, which cannot necessarily be solved by the building of more houses. I know that some of it is caused by immigration and other factors.
Secondly, there are twice as many people in bed-and-breakfast accommodation as there were when the Government came to power. Of course we are pleased that families with children are now moved out of such accommodation, but this too is a serious problem, and Members in all parts of the House should acknowledge that it needs to be solved.
Thirdly, there has been a 46 per cent. decline in building by social landlords—not an increase, as the Minister implied. All Members are concerned about affordability, and the fact that we are building fewer affordable homes should not be trumpeted as a success—although the Minister suggested that it should—but should be recognised as an embarrassment.
A number of speakers have observed that this is a local issue. It is, in fact, most acutely present in the urban areas of Britain. If we can be said to have a
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problem relating to housing and lack of opportunity, it can generally be found in the urban centres of the midlands and north. We should all take that problem extremely seriously. It is in those areas that 51 per cent. of all crime and 72 per cent. of violent crime takes place. That is where we see really poor housing, where most council housing stock resides, and where failing schools are located. We need to recognise the link between a commitment to drive house building and the economic engine of Britain in the south-east and what happens in the regions of the north.
The hon. Member for Sheffield, Attercliffe (Mr. Betts) made a good point—that investing in infrastructure and housing in the south creates a conflict of interests with the needs of the urban centres of the north and the midlands. In the long sweep of history, part of the difficulty has been migration from the regional centres in those areas. Emigration from the centre of Leeds, Manchester or Newcastle—21 per cent. from Newcastle over 30 years, and 16 per cent. from Manchester—inevitably means that those left behind are those who could not afford to move, because they did not have the education and the economic opportunities possessed by others. As a consequence, the continued economic decline of those centres is guaranteed.
Last week the Under-Secretary asserted that there was no migration from north to south. It is true that it is hard to track the pattern of migration, but it is a fact that in most major urban centres in the midlands and north there has been a net decline in the population. Some migration has been to the suburbs, some to London, and then outwards to the south-east or to the south-west for retirement purposes. Continuing to build more houses in the south-east will make the problem worse, not better. It will create a cycle of decline in the north, and huge congestion problems in the south. As the hon. Member for Sheffield, Attercliffe pointed out, it will also create a competing demand for infrastructure investment in the south-east which, unless met, will cause an enormous crisis and a major drain of public expenditure.
Migration of populations from one area to another is extremely expensive. It is a great irony that the Labour party should be pursuing a pro-south-east, pro-investment—in the south-east and south-west—regional policy, with no apparent awareness of the consequences for the midlands and north. It is not that we do not applaud some of the regeneration initiatives; but they will be as nothing if we continue to drag the population away from those urban regional centres.
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