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Baroness Scott of Needham Market: My Lords, I thank the Minister for repeating the Statement, with its bewildering level of statistics and initiatives. If there was any doubt as to the proximity of an election, it becomes less all the time.
The Government have been very up front about the fact that the number of households has been rising faster than the supply of new housing, but it is wrong to assume that simply building more houses will deal with the problem. It is not only a question of there being too few houses but that too many of them are in the wrong place, at the wrong price and in the wrong condition. This is because many years of poorly implemented and thought out regional strategies have resulted in the kind of imbalances that we currently see and the overheating of the economy in London and the south east.
Given that house prices have risen, as we have heard, from 3.5 per cent of an annual salary to six times that over the past 10 years, have the Government any evidence to suggest that building large numbers of houses in London and the south east will have any real effect in dampening down the costand certainly enough to create access for first-time buyers who are increasingly struggling to get into the housing market? This problem will get worse with an emerging generation of people trying to start off in the housing market with huge debts accumulated from university.
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Since the late 1950s, between 150,000 and 200,000 new houses have been built each year for sale. Last year, however, only 21,000 social housing units were built. That is against a backdrop of a loss of 1.7 million council houses which were sold and 100,000 housing association properties. It is the shortfall in this sector which requires urgent action, a fact which has been brought to the attention of the Government by the Rowntree Foundation and the CPRE among others. It is against that backdrop that the announcement today of 75,000 houses over the next three years does not represent enough of an increase to make a difference.
It is, however, a significant improvement on the proposals from the Conservative Benches, which would not only see the level of funding available for housing cutas we saw in their spending proposals last weekbut their policy of bringing in the unfettered right to buy for housing association tenants would deplete the stock of social housing down to almost zero.
The report makes much of the fact that something like 90 per cent of people say they would like to buy their own homes, but I caution the Government to be careful about how they interpret that figure. Many of those people are not necessarily expressing a wish or aspiration for the joys of home ownership; rather it is a reflection of the alternatives available to them. Social housing is very difficult to get into and the private sector is expensive, insecure and often affords very poor conditions.
The reason I say that is because moving from the current level of 70 per cent homeowners to, say, 90 per centif that is the figure at which the Government are lookingcould only be achieved at a significant cost to the public purse through subsidies and discounts. That may or may not be right, but I would ask the Government at least to consider whether the cost of moving the level of home ownership up from 70 per cent would not be money better spent on providing rented accommodation in the social sector in the first place.
Unlike the noble Baroness, Lady Hanham, we on these Benches welcome the fact that the Government have pulled back from bringing in the right to buy for housing association tenants. In fact, we have serious doubts about whether it would be legal to extend the right to buy to housing associations if they were to be forced by government. Given their charitable status and the role of private financial institutions in their funding, we are not convinced that it would be legal for a government to do that. There is also the question of undermining the confidence of private and charitable investors in housing associations if they believe that their assets are going to be sold on.
I note from the accompanying document which was published today that the Government's home buy proposals will allow housing associations voluntarily to agree to the right to buy. I want to put on record at this stage that we would like that choice to be real and truly voluntary. We shall be looking out for ways in which the Government might actually force the hands of housing associations in this.
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I also note that there is a chapter in the document which refers to cutting red tape on renovations. It is a pity that the Government have not dealt with the real issuethat is, the cost of renovating and restoring old properties, of which there are many in parts of the country. At the moment, the 17.5 per cent VAT on renovating existing properties is a nonsense.
Finally, the report is very bullish on the question of infrastructure but my region, the east of England, has told the Government that it cannot sustain the levels of housing numbers required unless there is more investment in transport infrastructure. Perhaps the Government will concentrate on that.
I apologise for all the statistics and the rate at which I read the Statement. I was watching the clock and thought that it would take a long time if I used my normal drawl. I probably read it a little too quickly.
I agree with some of the points; others I take exception to. As shown by the recent figures to which the noble Baroness, Lady Hanham, referred, homelessness has increased if one measures it by those living in temporary accommodation. However, in the past five quarters the numbers have gone down. What has not gone down is the number of people leaving temporary accommodation to secure settled tenancies. There is a block on the conveyor belt, which we need to address. That is why we are quite confident of making the commitment in the document to halve the numbers in temporary accommodation by 2010. We have already tackled the flow into homelessness through our other strategies, which I shall not detail here. For the past five quarters, the numbers going in have gone down, but people have got stuck in temporary accommodation.
Some of the noble Baroness's points are quite right. I cannot say anything about stamp duty; it is a matter for the Chancellor, and is not covered in today's document. I think that there was a general consensus about the abolition of mortgage tax relief which, as far as I understood, took place under the previous administration. I do not depart from that, because there was a general consensus, so it is not really relevant to raise it now.
Both noble Baronesses referred to housing association tenants. This is a voluntary schemeit is not the right to buy. It will be for the housing
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associations to make the decision, charitable or not, if they are not already involved in the right to acquire. Most of the charitable ones are not, because the legislation did not pass this House in 1984 or 1985, I understand. These arrangements are not hard and fast; a consultation paper will be issued before Easter. We want to consult on the way in which the discounts are financed and recycled for the provision of social housing. We think that we can make this a genuinely voluntary scheme, which will be embraced by the housing association movement in providing social rented housing. Several good and positive comments have been made today.
I take very much what the noble Baroness, Lady Scott, said. There is a fantastic amount of ignorance and it spreads around Whitehall. There is some £24 billion of private sector investment in the housing association movement. Speaking off the cuff, giving knee-jerk reactions or considering policies that have not properly taken that into account could be highly damaging to private-sector investment in the housing association movement. Anyone who wanted to propose a policy of wholesale selling without taking account of that is on very dangerous ground when it comes to the financial markets and homes for our fellow citizens. We have taken that on board in respect of the way in which the policy has been enunciated, so we do not envisage any difficulties. If there is a good policy floating around, like other political parties, we will want to steal it. I do not say that with reference to any particular policy; all policies should be considered by mature adults in a democracy, and if they are good they should be adopted.
I realise that there is some difficulty in grasping the idea of building a new home for £60,000. When this was announced at the Labour Party conference by the Deputy Prime Minister, there were gasps. However, one can visit the Delivering Sustainable Communities Summit in Manchester next weekat a fee, but I understand that offers were made to Opposition parties for a discountand see such a dwelling constructed inside the GMEX centre. A competition for house builders to do this will be announced. We want to drive down the costs of construction without jeopardising environmental standards, quality or safety. We are fairly confident that that can be done.
I realise that the noble Baroness, Lady Hanham, was being tongue in cheek, but we are the first government ever to have a target for new homes to be built on brownfield sitessecond-hand land. We do not want to waste land. We are an island nation, and it is in short supply.
When we came into power, the number of homes built on brownfield sites, including conversions, was 56 per cent. There was no previous government target for this. We set a target of 60 per cent. We reached that target seven or eight years ahead of time; it is now 67 per cent, and growing. We do not want to increase the target; we want to keep the pressure on. The noble Baroness said that we cannot build ourselves out of housing policies, which leads me to believe that there is not much support for the step change in production. We know that it will be more difficult to keep meeting
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that target with a step change in housing production. It makes no sense to start jacking up the target. We think that building 67 per centtwo thirdsof all new houses on second-hand land is good, and we also think that we can do better.
Secondly, in 1997, the density of building in Englandthese are all English figureswas 25 dwellings per hectare. In 2003, it was 33 dwellings per hectare. That is quite a substantial increase. It is sufficient for us to be able to claim that the extra 200,000 homes under the communities plan over those which were already planned in the wider south-east930,000 were already planned to be built by 2016can be built on less land than was planned for the original 930,000, and the saving of land would be the size of Oxford. So we can build 200,000 extra houses, save land the size of Oxford, and have 1.1 million houses by using more brownfield sites and higher densities.
We are increasing the geographical spread of the density directive which currently applies only to the south-east and to London. We are including the east of England region, the south-west and the county of Northampton, so that all parts of the four growth areas are included in the density directive.
The new money announced todayalthough there were not many actual figuresflows from the spending review announced by the Chancellor in the summer. The figures have not been used before, and there is a lot more to come. We are working on the spending plans for 2006-07 and 2007-08. Announcements will be made this year, flowing from the Chancellor's announcement at the spending review in July. There are literally hundreds of millions of pounds to be disbursed, whether the money goes on neighbourhood renewal, the growth areas or the Thames Gateway. That money has not yet been announced; we are still working on it. The figures announced today are part of that money, so it is the first time they have been announced.
We are committed to the right to buy. For reasons of historical accuracy, the Labour Party abandoned its opposition to the right to buy in 1985. The noble Baroness, Lady Hanham, shakes her head, but I was the shadow Minister responsible and I proposed the document at the Labour Party conference in Bournemouth that year, which was approved. The fact that we went to the 1987 election and people still thought we were opposed was a complete and abject failure of communication by the Labour Party. Well, we have learnt our lesson since then. However, it is on record that our opposition was abandoned in 1985.
The householders development consent review is a hell of a mouthful. I could not find it in my notes because I looked under "planning reform". This will be a root-and-branch review of the regulations facing householders wanting to improve their homes. We will be looking for ways in which to streamline application processes and minimise bureaucracy while, of course, protecting neighbours' rights and the local environment. We will be examining the case for introducing new ideas such as involving neighbours at an earlier stage in the planning process so that we can resolve disagreements by mediation.
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The review expects to report in the second half of 2005, following which its proposals would then be subject to full consultation. Several items announced today require further processes, secondary legislation or proper consultation. It will not be done on the hoofit is a five-year plan, after all. There is a degree of strategy involved rather that just tactics.
The green belt direction will enable the Secretary of State to review proposals for inappropriate development in the green belt. It is basically an additional protection. I reject the noble Baroness's cheap jibe. The Deputy Prime Minister has provided more than 19,000 extra hectares of green belt land. It is statutorily protected. Before anybody says it, I accept that a lot of it is in Northumberland, but that is not the issue. The issue is that it is statutory green belt. There are 12,000 more hectares in the pipeline currently coming through the local authority process, so there will be up to 31,000 more hectares of green belt protection in this country than there were when this Government came to power in 1997. By the way, before it is introduced, the direction will be subject to consultation so there will be plenty of opportunities for comment.
One final point relates to moving forward on people's aspirations for home ownership to be greater than 70 per cent. We are not saying that we must get to 90 per cent. There may be an aspiration for that out there, but the noble Baroness is quite right. The issue must be carefully balanced. We are trying to balance it with a series of packages to improve social housing. It would not make sense simply to promote a large programme of social housing under the existing set of rules. With all the cost flaws we would still lose some stock with the crude application of the blunderbuss of right-to-buy. It does not make sense. We would lose housing stock for future generations. We are seeking to bring changes and possible nuances to the schemes that protect the stock for social renting or the stock for first-time buyers for future generations, so people can cascade out and staircase upto use the jargoninto the private sector.
The Statement is wonderful and excellent in terms of housing policy and I can tell the House that there is a lot more to come next week, when the five-year plan partner document for the rest of the ODPM's activities will be published, as will about 13 daughter documents on local governance, the quality of life in communities and other initiatives. It will be a wonderful week for announcements from the Office of the Deputy Prime Minister.
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