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3.7 pm

Michael Gove (Surrey Heath) (Con): May I begin by thanking the hon. Member for Chesterfield (Paul Holmes) for his speech? When the right hon. Tony Benn stood down as Member for that constituency, many of us felt that something would be missing from the House, but I am delighted that the spirit of Bennism is alive and well in Chesterfield. As the hon. Gentleman was speaking, I was looking at the hon. Member for Yeovil (Mr. Laws), the standard-bearer of economic liberalism in his party, and saw a frown pass across his features—I can quite understand why.

I thank the hon. Member for Milton Keynes, South-West (Dr. Starkey) for the masterly way in which she summed up the views of her Select Committee. She chairs it with grace, and the degree of work that she has put into the subject and the attention she gives it reflect her lifelong commitment to dealing with questions of local government and housing. Conservative Members do not share all her analysis or all her prescriptions, but we are grateful to her and her Committee for their work.

The high standard of the hon. Lady’s speech was reflected in almost all the contributions on both sides of the House. The hon. Members for North Swindon (Mr. Wills), for Regent's Park and Kensington, North (Ms Buck) and for Birmingham, Northfield (Richard Burden), the right hon. Member for Oxford, East (Mr. Smith) and the hon. Member for Stroud (Mr. Drew) each drew attention in their remarks to the problems faced by their constituents. They did so with eloquence and passion. No less eloquence and passion was displayed by my hon. Friends the Members for Ludlow (Mr. Dunne) and for Hammersmith and Fulham (Mr. Hands), who also pointed out the vital importance of increasing housing supply, in particular to deal with the needs of the vulnerable.

Sometimes, Labour Members have allowed their Olympian objectivity to lapse and have sought to caricature the Conservative party as restrictionist on housing supply. Any fair-minded observer who had heard the contributions made by my hon. Friends would be in no doubt that we are the party of increasing housing supply and helping the vulnerable.

Mr. Khan: On that point, will the hon. Gentleman explain why, in the past Session, he signed early-day motion 519, which opposed new homes in Surrey?

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Michael Gove: The hon. Gentleman once again shows his attachment to the parliamentary Labour party brief—he would be lost without it. I am proud of the early-day motions that I have signed. That particular early-day motion expressed concern about the insensitivity of development.

I have had a meeting with the Minister for Housing and Planning to draw attention to the lack of development in my constituency. I asked her to take action to deal with the problem caused by the way in which Natural England—formerly English Nature—has instituted a moratorium on all residential development in my constituency. I want a bipartisan consensus on lifting that moratorium. When the Minister makes her speech, perhaps she will turn her attention to what the Government are doing to jolly along Natural England, which is one of their quangos, to ensure that there is more house building in my constituency. In a Westminster Hall debate—sadly, the hon. Member for Tooting (Mr. Khan) could not be present—I called on the Under-Secretary of State for Communities and Local Government, the hon. Member for Sheffield, Heeley (Meg Munn), to press the Minister for Housing and Planning to find out what could be done to ensure that there was more house building in my constituency and neighbouring constituencies. I await the Minister’s comments with interest.

As the debate has demonstrated, there is a widespread consensus in the House that we need to increase housing supply, not least because projected future household growth outstrips the growth in new housing completions. That is a problem both for those who want to own and those who want to rent, whether that is in the private or the social sector. For those who want to own, the price of the average house is such that both partners in any relationship would need to earn more than the national average wage of £24,000 to have even a chance of getting on the housing ladder anywhere in the country.

As many hon. Members have acknowledged, we have a problem with social housing. The Chancellor has indicated that when it comes to the comprehensive spending review, he might turn from the clunking fist into Father Christmas. However, as several hon. Members have pointed out, the Government should not be over-proud of their record on social housing. Some 94,000 people are in temporary accommodation today, but the figure was half that—only 41,000—in 1997. The Chancellor has a target of halving the number the people in temporary accommodation. That is an admirable goal, but if it is met, we will only be back to where we were when this Government took over.

The number of social housing completions has been consistently lower under this Government than it was under the last. I admit that housing policy was never perfect under previous Administrations. However, even in the 1990s, the number of social housing completions under all Conservative housing Ministers ran at between 23,000 and 30,000. The figure has never reached that level under this Government; it has ranged between 18,000 and 13,000.

Mr. Raynsford: As part of the hon. Gentleman’s review of housing policy, will he reflect on the legacy that the Conservative Government left behind in the form of a £19 billion backlog of disrepair in the
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existing social housing stock? Does he seriously think that it would have been responsible for the incoming Government to build new, rather than repairing the derelict properties that we inherited from his party?

Michael Gove: The right hon. Gentleman is a former Minister for Housing and Planning, and I pay respect to the thoughtful way in which he has dealt with the subject. The decent homes standard has played a significant part in improving stock across the board. However, increasing supply is one of the key things that the Chancellor and the current Minister for Housing and Planning have put at the heart of their policy. I regret that the focus on improving housing standards was at the expense of increasing supply. It is only now that the Government are playing catch-up with the estimable record of the Conservative Government.

Mr. Slaughter rose—

Michael Gove: I must try to make progress, given the time constraints that we face.

As well as discussing social housing, it is appropriate to acknowledge that the Government have put a great deal of emphasis on low-cost home ownership schemes. We heard an entertaining exchange between the hon. Member for Ealing, Acton and Shepherd’s Bush (Mr. Slaughter) and my hon. Friend the Member for Hammersmith and Fulham about low-cost home ownership and some of the strikingly high-cost schemes that sail under that banner.

The Government’s record on low-cost home ownership schemes is disappointing. Yesterday, the Chancellor announced with a fanfare that he wished to double the number of those taking advantage of shared ownership to 160,000. I do not know where he got those figures from, but it was clearly not the Department for Communities and Local Government, because according to answers from the Department, the number of homes sold under the Minister for Housing and Planning’s own social homebuy scheme in September was just one. By November, that had increased dramatically to five. I congratulate the Minister on that 500 per cent. increase. I am concerned, however, because the Housing Corporation allocated £15 million of public money to the scheme. Never in the field of house building has so much been spent so badly to provide ownership for so few. The Government’s failure, both in respect of that scheme and in so many other areas, is no accident, nor is it the consequence of neglect.

Mr. Slaughter: The hon. Gentleman, whose attitude is always refreshing, seems to be in favour of meeting housing need, and he rather casts aspersions on home ownership. He talked about people on waiting lists, overcrowding and people in need, but does he accept that most of those people will need social rented housing? I ask him the same question that I put to the hon. Member for Hazel Grove (Andrew Stunell): does he agree with the Mayor of London’s target of 50 per cent. affordable housing, 70 per cent. of which should be affordable social rented housing? Will the hon. Member for Surrey Heath (Michael Gove) disassociate himself from Tory councils such as Hammersmith and Fulham, which say exactly the opposite—that wherever there is an opportunity, housing should be for sale, not for rent?

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Michael Gove: Invited to choose between the Mayor of London and Conservative-run Hammersmith and Fulham council, I shall side with Hammersmith and Fulham, not just because its mandate is fresher and more resounding, but because one reason for the failure at the heart of Government policy is their over-reliance on targets. I mentioned that the Government’s failure was no accident, and was not the result of conscious and amoral neglect, but springs from a philosophical and ideological problem: the Government centralise and micromanage, and they have too much of a statist approach to every aspect of policy. The same clumsy clunking fist that is responsible for failure in other areas is responsible for the failure in housing.

Mr. Andrew Pelling (Croydon, Central) (Con): Does my hon. Friend note the fact that the Mayor of London does not set 50 per cent. targets across London, as he recognises that there should be a degree of flexibility? It is the lack of flexibility in the Government’s approach of setting national targets, and targets for units in areas of social housing, that has resulted in a huge shortage—a crisis—in the supply of family housing.

Michael Gove: My hon. Friend makes an excellent point. One of our key problems is the national criteria, which do not take account of specific local factors. There is a lack of family homes, and an over-supply of flats in comparison with family homes, not just in London but further afield. On previous occasions in the House my right hon. Friend the Member for Penrith and The Border (David Maclean), and the right hon. Member for Berwick-upon-Tweed (Mr. Beith), have pointed out that there is, effectively, a moratorium on development in their areas, because housing targets for their regions have been met, and the targets are treated as ceilings, not floors. One of the unfortunate consequences of the regional spatial strategies over which the Minister presided is that many communities that wish to expand and to build new housing, both market and affordable, in order to keep the community sustainable, are prevented from doing so. Essentially, national and regional policy has restricted growth in areas where it is genuinely popular.

I recognise that there is some resistance to house building in certain parts of the country, but I submit that the right thing to do is to operate by consensus rather than confrontation; that is always the right way to proceed. I notice that the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) is smiling. May I remind him of what he wrote in a recent article entitled “Decent Homes in a Sustainable Environment: Priorities for Labour Policy”—a title that clearly suggests that, under this Government, we have had neither decent homes nor a sustainable environment? He points out that

The right hon. Gentleman’s critique of his Government’s policy was prefigured by the comments of the Leader of the Opposition.

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Mr. Raynsford rose—

Michael Gove: The right hon. Gentleman is eager to speak. How can I resist?

Mr. Raynsford: If the hon. Gentleman did a little more research, he would discover that I was referring specifically to the house-building trends of the 1980s and early 1990s, following the policies adopted by the Conservative Government, who provided a free-for-all for indiscriminate greenfield development at very low density.

Michael Gove: I am afraid that the right hon. Gentleman’s words accurately describe the Government’s policy, because he rightly drew attention to increased resistance to development in some areas. Whatever measure of public opinion we use, resistance to new housing development has grown since the Conservatives were in office. As I pointed out, although there might have been flaws with past policy, they have increased and worsened under the Government. Much as he tries to do so, the right hon. Gentleman cannot rewrite history, or eat his own words. The cap fits the Ministers whom he is compelled, however reluctantly, to support.

If we are to build an enduring consensus on the housing supply, we must consider four factors that have increased resistance. People are concerned about the lack of infrastructure for new housing development; they are concerned, as the right hon. Gentleman pointed out, about the aesthetic quality of new development; they are concerned about the environmental impact of new development; and they are concerned, too, that new development will be accompanied by additional costs, but not additional benefits. On infrastructure, proposals have been introduced for a planning gain supplement. I hope that the Minister will enlighten us and explain how benefits from the PGS will be split. Will the PGS, as Kate Barker suggested, be an entirely hypothecated tax so that benefits will go to the communities where new developments are built? A simple yes or no will suffice, because local communities want a guarantee that they will receive the cash that they need.

I echo the words of the right hon. Member for Greenwich and Woolwich, and of the Prince of Wales, who pointed out we can overcome resistance with improved design and by working with communities. The Prince of Wales’s affordable rural housing initiative has resulted in successful housing developments of the highest quality that are not resisted but welcomed by communities. What is the Minister doing to improve design quality? As for the environment, yesterday the Chancellor discussed his proposal to exempt new carbon-zero homes from stamp duty, but on last night’s edition of “Newsnight” the Chief Secretary to the Treasury said that fewer than two dozen homes, on one development, meet that criterion. [ Interruption. ] The new incentive will be removed, the hon. Member for Eltham (Clive Efford) will be interested to know, after just three years. Will the Minister use her formidable skills of persuasion to bend Treasury Ministers to her will to ensure that we apply genuinely environmentally friendly taxation and regulation to new housing development?

Finally, on the question of incentivising house building and working with local communities to ensure
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that they welcome the house building that many enlightened civic leaders accept is necessary, I hope that the Minister will add her voice to those calling for publication of the much-delayed Lyons review, so that we can discover what appropriate local government finance incentives we can use to encourage house building. Sir Michael Lyons has laboured long in the vineyard, but yesterday, I am afraid, the Chancellor told us that we would have to wait another few months before his report was published. Why on earth the Government are scared of the subject of local government finance, I do not have the faintest idea, but I look forward to hearing from the Minister.

3.24 pm

The Minister for Housing and Planning (Yvette Cooper): May I congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) and her Select Committee on an extensive and weighty report that raises a series of important issues? It is testament to the significance of those issues that many Members have attended our debate.

Hon. Members will be aware that since 1997, we have had low mortgage rates compared with those of past decades, and greater economic stability, in contrast to earlier housing market crashes, which has made it possible for far more people to become and remain home owners, rather than face the repossessions that took place in the past.

The report also makes it clear that we face serious pressures from rising house prices across the country and that there is a serious underlying need to build more new homes for the future, so that the next generation can have homes as well.

Clive Efford (Eltham) (Lab): I commend to my hon. Friend the report published this week by Shelter, “Against the Odds”, which highlights the fact that 1.6 million children are living in bad housing. The consequences for those children are that they are twice as likely as other children not to have GCSEs when they leave school; they are twice as likely to be excluded; they are five times more likely to have nowhere to do homework; and they are three times more likely to experience poor health in their lifetimes. Those children pay with their lives for poor quality housing, and if we do not deal with the issue in the next comprehensive spending review, the problems will continue. Will the Minister urge my right hon. Friend the Chancellor to tackle that particular issue in the comprehensive spending review, because there is a growing crisis that we have failed to address in the past 10 years?

Yvette Cooper: My hon. Friend is right to draw attention to the extremely important Shelter report, which shows the significance of housing in people’s lives. We have lifted almost 1 million children out of bad housing as a result of the decent homes programme—many children used to live in unacceptably bad council housing—but he is right that we need to build more homes, which means more social housing, more private housing and more shared ownership homes, if we are to address the needs of young children, who need better housing for the future.

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Mr. Love: One of the issues raised in the report is the priority given to finance for affordable housing compared with finance for low-cost home ownership. Will my hon. Friend make a commitment that both matters will be accorded a similar priority in the comprehensive spending review?

Yvette Cooper: The Chancellor has said that social housing needs to be a priority in the comprehensive spending review. I think that we need more shared ownership housing, too. The shared equity task force report, which was published yesterday, sets out better ways in which to bring more private sector investment into shared ownership schemes, which will give us the opportunity to concentrate public sector investment increasingly around social housing.

That is an area of contrast between the parties, because, as my hon. Friend may be aware, the shadow Chancellor said in February that increased shared ownership should be funded from some of the Government money that is going into social housing. I disagree with that, because I think that we need more social housing and more shared ownership. We should not reduce social housing in order to deliver the shared ownership that we need.

Demand for housing has grown steadily, and the house building industry has failed to respond. Over the last 30 years of the 20th century, the number of households increased by 30 per cent., while the level of new house building fell by 50 per cent. The figures that we have set out for the future suggest that if we continue with the rate of house building over the past few years, the proportion of 30-year-old, two-earner households able to afford their own home on the basis of their earnings will drop from more than 50 per cent. today to nearer 30 per cent. in 20 years’ time, which is simply unsustainable. It would be unfair to deny future generations the opportunity of home ownership, which previous generations have had. In that circumstance, many of those people would still have the chance to get on to the housing ladder, but only because of gifts or inheritance from parents or grandparents, and it would be unfair if someone’s chance of becoming a home owner were to depend on whether their parents or grandparents were home owners before them. That is why the Select Committee report is so important.

It is interesting that many hon. Members on both sides of the House have discussed the need to build more homes, which is very new. I remember the debates on the issue 12 or 18 months ago on the Floor of the House and in Westminster Hall. We were arguing for far more houses, but Opposition Members told us that there was no need for new homes and that we did not need the Barker recommendations.

I think that we need to build more homes. We have already increased the level of house building from 130,000 new homes four years ago to nearly 170,000 new homes last year.

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