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House-building Programme

My Lords, I declare my interests as a vice-president of the National Housing Federation, president of the National Housing Forum and a vice-president of the National Home Improvement Council. It is eight years since I became a Member of this House, shortly after the new Labour Government came in. I had been the Liberal Democrat spokesperson for housing in another place and I had very high hopes for increased investment in housing and real efforts to improve the quality and quantity of our housing stock. Noble Lords have set out many of the statistics showing how disappointingly slow progress has been, and I am sure that others will do so also. In the short time that I have today, I want to emphasise how important we believe it is not only to increase the supply of new houses but not to neglect the important role of repair to existing housing stock. My noble friend mentioned it in her opening speech. Maintenance and modernisation of the present stock is needed and its energy efficiency must be improved. The Government are trying to introduce energy efficiency in new stock, and progress is still slow there. There is now an even more pressing need for energy measures given that rising fuel prices are knocking many people who had been taken out of fuel poverty back into that situation. In our existing housing stock there is a great deal of scope to make better use of the buildings that we have. I refer not only to empty properties, on which, I grant, the Government have taken action—it has been a bit slow but it is there—but to considering changing existing stock, some of which is non-residential and could be made into very suitable homes. The majority of today’s homes will still be in use in 100 years’ time. The latest figures from the English house conditions survey, which covers up to 2003, show a welcome improvement in the nation’s housing stock. Nevertheless, too many households must tolerate poor living conditions associated with a century ago. The fact remains that today in England, one of the world’s richest nations, 6 million to 7 million homes are still classified as non-decent. It is disappointing that, during a period of relatively favourable economic conditions, improvements in the private-sector housing stock have not been greater. There are still 5.3 million homes in the sector: that is, 30 per cent of our whole housing stock classed as non-decent. Without a greater commitment from the Government on those matters, the legacy of a decaying housing stock will remain. My noble friend mentioned value-added tax, the issue that could help in this area, on which I hope the Government will act. There should be a reduction in value-added tax across the board on home improvements. The arguments against it run something like this: there would be a direct loss of tax revenue, and there is a danger that other goods and services will plausibly claim similar treatment, leading to the erosion of the tax base. But expenditure on home improvement and repair has much wider social and environmental effects. They are so wide that I believe special treatment to be justified. Looked at in the round, expenditure on improvement and repair helps to create and keep homes. That is important in today’s debate. The quality of badly maintained property decreases so that it no longer meets the rising aspiration of homeowners. In extreme cases, as mentioned, such property must be destroyed and rebuilt, with all the associated environmental consequences: not only the destruction of communities and neighbourhoods but the need to use more materials and energy. Failing to maintain property reduces the net addition to the housing stock that we get from new build. There is also evidence that a reduction in VAT on improvement and repair would reduce the rather large informal economy there is in this area and, therefore, the number of cowboy builders. There is a lot of evidence there, and I do not have time this afternoon to develop that further. In her reply, the Minister will no doubt list the areas where VAT has been reduced, but these are not straightforward. As an ordinary member of the public trying to deal with them, I can tell you they are not easy to understand and take advantage of. Many people do not even know about them. There are rumours that the Government are looking at this issue, not for the reasons I have outlined, but because Kate Barker has pointed out to them that they need to do something about the tax regime to provide money for the infrastructure for the new communities as part of their house-building programme. I do not mind how it happens, but this is an important issue, and I look forward to hearing whether the Government have any plans in this area. Will the Government also look back at what I believe were the successful general improvement areas and housing action areas that were undertaken by local authorities in the 1980s? The Government have had a large windfall from the increase in house prices and the huge amounts of stamp duty that they did not anticipate getting. If some of this money was used for one-off grants to local authorities, they could set up revolving loan funds and base it on the general improvement area idea to administer them. In passing, please do not set up another quango body to do it—use the local authorities that have proved in the past to be able to deal with these matters. My main message to the Government is that new build alone is not enough. Others have echoed this, including the noble Lord, Lord Whitty, whose contribution I found interesting, and who touched on this issue. Improvement and repair are also important. They ensure that we have better housing stock, and contribute to keeping up the number of homes. I want to end in the last two minutes by touching on a slightly different area. My noble friend and the noble Lord, Lord Whitty, have talked about the problems of housing. The noble Lord talked about these problems in rural areas in the south-west. I now live in the north-east, and can tell the Minister that in Northumberland the sustainability of our small towns and villages is important. Government national policy, however, allows us to build almost nothing in the Berwick area. This means that communities become unviable, and the area is not sustained. There is also the problem of second homes. It is disappointing that there is no properly regionally elected body to deal with the spatial strategy, which has been handed down from the Government and is not helping us. Many people, particularly in rural Northumberland, have made representation about this. I hope the Minister will look at it, because sustainability is an important issue in rural areas, and is very different from what is happening in the towns.