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Address in Reply to Her Majesty's Most Gracious Speech

My Lords, I welcome the Minister to her new job; I am sure that she will bring her customary good humour, diligence and consensual style to the business before us. As we have heard, this gracious Speech does not include any legislation for the ODPM. I shed no tears about that. The Government have a touching faith in legislation—it is as though somehow, having passed a Bill, the problem is solved. Nevertheless, we will have a crowded agenda, and we have heard some of the issues raised today. I am pleased that my noble friend Lady Hamwee will stay alongside me offering her expertise in these matters. I am also very pleased to be joined by my noble friend Lady Falkner, who is to take the portfolio for local government and sustainable communities. She is referring to that as the "Ministry for Respect"; this is the point at which we have to reclaim the word from Mr Galloway. A decent affordable home is certainly a fundamental human right, and the noble Baroness is right to put that first on her list of important issues that face us. Like many people, I have been struck by the announcement in recent days of the extension of shared equity schemes. I am sure that we all welcome any measures that make homes more affordable to more people. We await with interest details of exactly how the scheme will work, who will be eligible, how that will be decided and, equally, how the Government intend to bring the proposals forward in a way that does not fuel what is, in some areas, already an overheated housing market. The noble Baroness referred to the fact that there is a problem in London and the south-east, but it is much wider than that. There are property hotspots in many areas. I have a friend who works for the council on the Isles of Scilly. He will probably have to leave because it is impossible for him to find accommodation. That is an area where house prices are at Chelsea levels, but wages are at Cornwall levels. It means that all sorts of people simply cannot afford accommodation. The key worker scheme is simply not wide enough. That brings me to the point that the key worker scheme never could be wide enough. There will always be times when, for some people in some places, the answer is in the rented sector rather than the home purchase sector. I question whether the Government are giving enough attention to the rented sector, because people on the whole would much rather be in the socially rented sector—it is regulated, the rents are controlled and the landlords are regulated—than be at the mercy of the private rented sector. However, I do not get a sense that socially rented accommodation is high on the Government's agenda any more. They need to consider that moving levels of home ownership much beyond 73, 74 or 75 per cent will require increasing investment of taxpayers' money for relatively small gain. The same money could be used to improve the socially rented sector. I would like to understand a little more in time how the Government think on that. In parts of the country, the problem is oversupply, as we have heard. Most people, intellectually and with their hearts, find the idea of property demolition on a massive scale difficult to swallow in a time when there are housing shortages in other places. I wonder whether it would not be possible for the Government to rethink issues around renovation of such properties. For example, it is nonsense that VAT has to be paid on the materials for renovating derelict homes, whereas building new homes carries no rate of VAT at all. The empty homes initiative has pointed out that it is very difficult for people to get loans to do up such semi-derelict properties. There are people who would like to do it, but they simply cannot get mortgages to do so. The few that are available are eaten up, because demand far exceeds supply. Would the Government not consider that that might be a form for investment of taxpayers' money, as well as the shared equity schemes about which we have heard? Finally on housing, for rural housing the answer is very much on a small scale. That is where the Government need to allow local authorities and housing associations to work much more closely together on small-scale housing developments. In those, the planning system can be used to release land that would not otherwise be used for development, to provide socially rented accommodation by housing associations for people with local connections, and that would remain in perpetuity with those rural communities. We have heard some mention of transport. We now have one of the most flexible job markets in the world. Along with that job flexibility, we have high levels of home ownership—a fixed asset in a country with big regional variations. People now change their jobs roughly every two and a half years. It is not possible always to move house for a number of reasons, so that means that people now travel much further distances than we would ever have thought possible a few years ago. Therefore, whatever the Government's plans for future housing, it is essential that the transport infrastructure is built in, because we cannot assume that people will always live close to where they work. The world is simply not like that any more. High house prices in some areas, demolition in others, and huge transport problems all demonstrate that regional disparities are alive and well. I remember a debate in the previous Parliament when my noble friend Lord Rodgers talked about his first entry into regional government in the 1960s. Here we are, all these decades later, still having the same debates. The creation of regional offices by the Conservative government, followed by the RDAs in 1997, has led to increasing regionalisation by a host of organisations. The demise of directly elected regional assemblies has left a legacy of regional quangos, which have no democratic accountability. I hope that the Government will give some attention to that. In the short term at least, they should be brought under the direct scrutiny of the indirectly elected regional assemblies—in other words, the local councillors who form the regional assemblies. They do not have a regional mandate but they are at least elected by someone, as opposed to the groups that currently form policy. Turning to local government, there are three ways in which central government can help. First, I refer to local government reform. We have heard something about that with regard to elected mayors. Can the Minister say whether the Government have plans for wider local government reform, especially in the two-tier shire areas? I hope that if there are such proposals, they will be aired quickly and debated openly, as that is a better approach. Much of the local government improvement agenda—particularly delivering the savings of the Gershon review—requires partnership across the tiers of government and across neighbouring boundaries. Doing all that against a backdrop of rumour and innuendo about local government review is simply not the way to foster those sorts of partnerships. The second area is regulation. Local government, like so much of the public sector, is subject to massive quantities of regulation and inspection from a host of bodies—from Ofsted to the Audit Commission. I visited a unit dealing with brain injured adolescents which is regulated by 23 different public bodies. That is nonsense and takes focus away from the work that the unit should be doing. Regulation is expensive and it stifles local initiative and innovation. As we know from the health sector, meeting targets becomes an end in itself. I hope that the Government will continue the process begun by the Audit Commission, which is one of risk-based, strategic regulation, and which leaves most authorities to get on with the job with emphasis being placed on high-risk authorities. The most important question facing local government is that of finance. There is widespread agreement that the current system of local government finance and the way in which council tax sits within that is unsustainable. The Government's proposed revaluation in England will add to the inequalities that currently exist. Even the Conservatives—outside the election hothouse—have admitted in another place that property taxes always require revaluation and all that follows from that. Can the Minister tell us something about the Lyons review? What work will be undertaken and when will it report? Will it include an element of local income tax? That happens in many other countries and is recommended by the Local Government Association. David Miliband is on record as saying that we have weak local government in this country. One of the reasons is that central government have made it so. Successive governments have strangled local government through the finance system, regulation and their refusal to give a power of general competence. Why are the Government thinking of giving wider powers to elected mayors and not to local authorities which have a track record of delivering in their areas? The sustainable communities vision is one which I am sure we all share. Local government is an essential prerequisite of that.